Annual Report (ESEF) • Apr 25, 2023
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Offering a wide range of products and solutions from different materials, BEWI aspires to always offer its customers the most sustainable products and solutions. Net sales 1 050 EURm 748 EURm in 2021 Adjusted EBITDA 134 EURm 109 EURm in 2021 EPS collection capacity ~38 000 Facilities 67 Employees 1 ~3 300 ~2 100 end of 2021 1 Including entities acquired in 2022, excluding Aislenvas and Inoplast Taxonomy eligible 49% 33 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report Our vision Protecting people and goods for a better everyday Our mission To create value by offering sustainable solutions for packaging, components, and insulation in innovative and efficient ways. Strategic priorities Our three strategic priorities define our everyday work to fulfil our mission and strive for our vision. 1. Innovation 2. A circular economy 3. Profitable growth Sustainability Sustainability is at the core of everything we do, our approach is based on three pillars: 1. Becoming circular 2. Actively engage in partnerships 3. Contribute to an inclusive society 44 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report More than years of history and a proven track record of successful M&A integration 2014 1980 1973 Merger with StyroChem into BEWI Group BEWI founded by the Bekken family focusing on packaging IP Brabant (Synbra origin) starts EPS polymerisation Jackon founded by the Akselsen and Solgaard families, focusing on EPS insulation solutions 1956 Acquisition SCA packaging 2011–2015 Vertical integration 2016–2018 European expansion 2018 European expansion focused on integrating recycling capacity 2017 Acquisition of Finnish XPS producer and Swedish packaging operations 2018 Acquisition of Dutch Synbra, creating a leading European integrated EPS producer Name changed to BEWiSynbra 2019 Launch of recycling initiative Use-ReUse 2020 Listing on Oslo Børs Acquisition of recycling assets and establishment of Circular Denmark Acquisition of BEWi Drift Holding (BDH) reinforcing position within food packaging Acquisition of Dutch recycling company Launch of the world's rst 100% recycled EPS Launch of recycling initiative Use-ReUse Entering the UK market by acquisition of minority stake in Jablite Group Establishment of recycling company in Portugal 2021 Acquisitions of Honeycomb, IZOBLOK, Volker Gruppe, Kemisol and several smaller trading companies 2022 Acquisitions of Trondhjems Eskefabrikk, Jablite, Berga Recycling, BalPol, Jackon, Aislenvas and Inoplast Entering French market by acquisition of minority stake in 6 facilities Acquisition of Norwegian sh box business and Swedish automotive business 100% Drift Holding Launch of Circular, for recycling and collection of EPS 55 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Acquisition of Norwegian paper packaging company Trondhjems Eskefabrikk 100% owner of UK-based insulation and packaging company Jablite Acquisition the recycling platform company Berga Recycling Acquisition of Lithuanian insulation company BalPol Transformative acquisition of Norwegian packaging and insulation company Jackon 100% owner of Inoplast Acquisition of Aislenvas Real estate divestments Investment in 2 500 photovoltaic solar panels in Portugal Development of new packaging facility at Jøsnøya, Norway Investment in a new recycling hub in Stockholm Ramp-up of volumes at new fish box facility at Senja, Norway The year in review First quarter Second quarter Third quarter Fourth quarter 66 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Strategic priorities Innovation BEWI shall innovate in search for more sustainable materials, products, solutions, and production processes, aiming at improving resource efficiency through the entire value chain and increase the use of recycled and non-fossil raw materials. A circular economy BEWI aims at being the most resource efficient provider of packaging, components, and insulation solutions. By managing the entire value chain, BEWI is committed to lead the industry’s change towards a circular economy by closing the loop. Profitable growth BEWI shall continue its profitable growth through organic initiatives and M&A opportunities focusing on strengthening its recycling capacity and broadening its product offering. 77 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Strategic highlights Innovation Circular economy Profitable growth Key achievements • Expanded portfolio of EPS raw material grades from recy- cled materials and increased production capacity • Start of autoclave process for expanded polypropylene (EPP) raw material production • Further development of new energy efficient molding technology for EPS and EPP for packaging and components • Further development of the ground-breaking product EPS XIRE®, a close to non-burnable material • 73% increase in EPS collected for recycling • Investment in new recycling hub in Stockholm • Acquisition of Berga Recycling and Inoplast • RecyClass certification of recyclability and REDcert certification of locations • Completed acquisition of seven companies adding close to EUR 600 million in sales and more than EUR 40 million in EBITDA • Ramp-up of volumes at new fish box facility at Senja and progressed development of new packaging facility at Jøsnøya/ Hitra • Investment in several organic growth initiatives Key priorities going forward • Further development of recycled grades and products • Improve molding energy efficiency in EPS and EPP molding • Create new sustainable insulation solutions and products • Further development of extrusion foamed and auto- clave EPP • Increase collection of materials for recycling • Increase use of recycled content in BEWI • Continued focus on improved resource efficiency throughout the value chain, including supply chain • Certification of ISO 14001 and Operation Clean Sweep for all production facilities • Continue consolidation within selected industries • Integrate acquired companies and extract synergies • Adjust capacity to current market conditions • Commence production at new packaging facility at Jøsnøya, Norway, and at new production line for construction boards in Olen, Belgium 88 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Innovating to improve resource efficiency and recyclability Innovation is one of BEWI’s three strategic priorities. The group is constantly searching for more sustainable solutions by focusing on the company’s key principles of the circular economy; improve resource efficiency, ensure recyclability and reuse, and increase circularity. Each of BEWI’s business segments has its own R&D department, overseen by a group function, focusing on continuous improvements. R&D in BEWI benefits from the diversified knowl- edge across segments. Innovation is integrated in the entire value chain, including searching for, and increasing the use of complementary and renewable raw materials and production processes, enhancing commodity products, developing customised solu- tions, innovating new products designed for use/ reuse and recycling, as well as improving recycling processes. Through the integration with Jackon in October 2022, further R&D resources, and capabilities, especially in the field of extruded polystyrene (XPS) and energy saving solutions for the insulation and construction sector, were added to the group. During 2022, RAW further developed new recy- cled grades and started an autoclave process for expanded polypropylene (EPP) raw material produc- tion. New molding technology for polyethylene (PE) and EPP has been developed in close collaboration with customers in the Packaging & Components segment. For segment Insulation & Construction, the first 100 per cent recycled product series for foundation solutions, an enrichment of the GreenLine series, have been launched. Fire resistant insulating products of EPS, and flooring and roofing systems in the Netherlands have also been developed further. Ville Nurminen, Chief Technology Officer BEWI ASA 99 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Consistently delivering profitable growth BEWI has demonstrated a strong and profitable growth. The company has had an average annual sales growth of 29 per cent since 2018, coming from both organic growth and the completion of more than 30 acquisitions since 2014. In 2022, BEWI completed seven acquisitions, adding close to EUR 600 million in sales. From annual reported sales of EUR 748 million in 2021, the company more than doubled this when closing off 2022 with annual pro forma sales of more than EUR 1 500 million, including full effect of the acquired companies. In addition, the company’s new fish box facility at Senja contributed positively to the growth. 20222021202020192018 Net sales 381 430 463 748 1 050 ROCE (%) 1 11.3% 2 19.2% 12.6% 10.5% 15.3% Adj. EBITDA (EURm) 31 52 65 109 134 No. of M&A transactions 5 3 6 8 7 Net debt /Adj. EBITDA excl. IFRS 16 3.5x 2.3x 1.6x 1.2x 2.7x 463 29% CAGR Net sales pro forma 1 ROCE = Return on average capital employed 2 Without IFRS 16 effects 1010 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Comments from the CEO Delivering continued growth and solid results in challenging markets In 2022, BEWI continued to deliver solid results and strong growth from organic and strategic initiatives. We focused steadily on our three strategic priorities: innovation, circular economy, and profitable growth – all with a vision to protect people and goods for a better everyday. Our ambition to lead our industry towards a circular economy is about our dedication to sustainability throughout our value chain, from innovation to production, and closing the loop through the collection and reuse of materials. Volatile raw materials and cost inflation characterised our key markets during 2022 and, consequently, uncertainty relating to further market developments. We will also remember 2022 as the year when Russia invaded Ukraine and the brutal and meaningless humanitarian consequences. 1111 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Sustainability is at the core of everything we do Sustainability resides at the core of what we do, this report provides an extensive account of our progress across our material ESG topics. Working to achieve a circular value chain and provide our customers with sustainable solutions have long been a top priority. Since 2014, one of our tenets has been “Less is more”, committing us to continuously strive for resource efficiency. We create more for less through innovations and smart and reusable products. While we are pleased with the progress in 2022, we also admit that there are yet challenges ahead. In the past years, we have put a lot of resources into improved reporting systems for the sustainability work, enabling an even more targeted approach for our efforts as we advance. For example, we are very pleased with the efforts to increase the collection of waste for recycling, resulting in an improvement of 73 per cent since 2021. On the other hand, we are not pleased with the volumes of recycled material used by our downstream units. Therefore, measures have been implemented, and we foresee a considerable improve- ment throughout 2023. Growth for all segments For 2022, BEWI reported net sales of 1 050 million euro, an increase of 40 per cent from 2021, of which 17 per cent was organic growth. We posted an adjusted EBITDA of 134 million euro, representing 23 per cent growth, of which approximately half was organic. All our four operating segments reported considerable growth in sales over the previous year. However, as we completed a high number of acquisi- tions in 2022, the reported financials only tell one part of the story. From annual reported sales of 748 million euro in 2021, we closed 2022 with annual pro forma sales of more than 1 500 million euro, including full effect of seven acquired companies. Needless to say, we are currently focusing on seamless integration of these entities. Profitable growth is a key strategic priority in BEWI. We continuously invest in organic growth initiatives, either in close collaboration with our customers or because we see specific market opportunities. Examples include: • A new extruder at the raw material facility in Etten-Leur, the Netherlands, to increase the uptake of recycled raw materials • A new fish box facility at Senja, Norway, under a long-term supply agreement with our customer Salmar • Development of a new packaging facility at Jøsnøya, Norway, under a long-term supply agree- ment with our customer Mowi • Investment in a new fish box facility at Iceland through a joint venture • Investment in a new production line for construc- tion boards in Olen, Belgium • Investment in a new production line for foundation systems in Skövde, Sweden In addition to the organic initiatives, we believe in consolidation within selected industries. The seven acquisitions completed contributed to strengthening business segments. We expanded into the UK, the Baltics, Germany, and Spain. We broadened our product offering, and significantly strengthened our market positions. And we further developed our recycling platform. All in line with our communicated M&A priorities. In October last year, we could finally complete the acquisition of Jackon, a transaction we consider transformative. We strongly believe in the benefits from the combination of Jackon and BEWI, including Working to achieve a circular value chain and providing our customers with sustainable solutions have long been our top priority. Since 2014, one of our tenets has been “Less is more”, committing us to continuously strive for resource efficiency. 1212 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report knowledge-sharing and introduction of strong brands in new markets, in addition to the significant synergies we have communicated. Well positioned for further growth Our integrated and diversified business model exposes us to many end markets and geographies. With mixed market developments and volatile raw material prices, profitability will naturally shift between segments and regions, enabling stable earnings on group level. Following recent acquisitions, approximately 60 per cent of BEWI’s business is exposed to the building and construction industry. This industry has shown reduced activity since last summer, especially in the Nordics, impacting volumes for segment RAW and Insulation. However, our acquisitions prove our confidence in the long-term potential for insulation solutions, supported by strong underlying funda- mentals, including the need to improve energy efficiency in buildings and related regulations. The demand for food packaging, accounting for approximately 20 per cent of our business, remains stable, and we notice strong demand for HVAC solutions. For sales to the automotive industry, we experience clear signs of improvement. Our key priorities going forward are, as previously communicated, to integrate acquired companies and extract synergies, as well as adjusting capacity and cost levels to the current market conditions. We also remain committed to our strategic priorities. BEWI’s business model, including the diversified exposure, makes us well positioned in the current markets. Backed by a strong organisation and a solid financial platform, we expect robust results, enabling us to continue to pursue attractive growth opportunities. Finally, I am once again proud to see the results delivered by the organisation through 2022, and I would like to express my gratitude to each of our employees for their dedicated efforts. I would also take the opportunity to thank all partners, customers, and shareholders for their trust and support during 2022. Christian Bekken, CEO Set to continue growth journey next five years >2x Adj. EBITDA Through organic growth and acquisitions 2021-2026 ~20% ROCE 1 Increase towards 20 per cent <2.5x NIBD/Adj. EBITDA Leverage target unchanged going forward 30-50% Dividend Of underlying net profit BEWI’s business model, including the diversified exposure, makes us well positioned in the current markets. 1313 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our business Integrated and diversified business model enables robust earnings BEWI has an integrated business model, meaning that the group manages the entire value chain, from production of raw materials and end products to collection and recycling of used products. 1414 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report RAW Production of raw materials, including white and grey expanded polystyrene (EPS), general purpose polystyrene (GPPS), and BioFoam, made from organic materials. Insulation & Construction (I&C) Manufacturing of an extensive range of solutions for insulation and infrastructure, as well as systems for the building and construction industry. The integrated model has for many years provided the group with stable earnings, as volatility in raw material prices affects the group’s upstream and downstream business units the opposite way. Increasing raw material prices benefit segment RAW, while putting pressure on margins in the downstream units, and consequently the opposite impacts from decreasing raw material prices. In addition to being diversified across segments, the group is diversified across regions and end markets. Packaging & Components (P&C) Manufacturing of standard and customised solu- tions for many industrial sectors, including boxes for transportation of fish and other foods, protec- tive packaging for fine goods, as well as technical and automotive components. Circular Collection and recycling of used material, includ- ing initiatives to raise knowledge and awareness about recycling, and waste management. Diversied across segments RAW 26% Insulation 32% P&C 36% Circular 6% Operating segments 1515 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report BEWI RAW Production of EPS located in Finland, Germany, and the Netherlands Raw material bought externally 100% sourced from Europe End consumerBEWI CIRCULAR Collection of solid waste for recycling BEWI CIRCULAR Mechanical recycling Use Reuse BEWI DOWNSTREAM BEWI has 67 production facilities External raw material customers 95% located in Europe ENDMARKET EXPOSURE END OF 2022 Building and construction ~60% Food packaging ~20% Other incl. HVAC ~15% Automotive ~5% Solid waste management Styrene and polystyrene 80% of raw material used are sourced from Europe Renewable feedstock 100% sourced from Thailand (BONSUCRO certied) Extensive industry knowledge in the search of increased resource efficiency throughout the value chain Operating throughout the value chain provides BEWI with several benefits, in addition to the stable earnings. The company’s R&D work is integrated in all parts of the value chain. However, innovation often starts in the upstream segment RAW, based on knowledge sharing across segments, originating from close and long-withstanding customer relations in the downstream units. This includes utilising industry experience to developing specialised products and innovating new, resource efficient and circular solutions. The integrated model is also crucial, and a competitive advantage to BEWI, in becoming a circular company. 1616 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Megatrends that drive us 1.5°C Politics and regulations accelerate sustainability MEGATREND Climate change Eating habits Globalization – localisation Shortage of labour Digitalization Urbanization Electric vehicles ASPECT • Energy supply • Transportation • Seafood • Waste awareness • Supply chain control • Reduce transportation • Automatization • Production process • Solution provider • ERP platform • Infrastructure • E-commerce • Shortage of residentials and logistic facilities • Reduce weight • Increase insulation BEWI EXPOSURE • HVAC • Insulation • Circular/Raw • Food packaging • Seafood packaging • Logistics • Production footprint • Prefabrication to construction sites • Automatization • Packaging for e-commerce • Prefabrication • Paper packaging • New buildings and renovation • EPP content in EV’s • Li-ion packaging solutions 1717 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report BEWI serves a wide range of end markets Materials used by BEWI in its downstream production have uniqe properties, such as being light and moisture resistant, and have thermal and shock absorbing properties, making them suitable for a range of different applications across end markets. Building and construction Insulation of buildings is a cost-efficient way of improving energy efficiency, and thus reduce greenhouse gas emissions. BEWI’s insulation solutions are mainly manufactured from EPS, XPS or PIR. In addition, the group offers a range of traded, com- plementary products. The product portfolio covers insulating boards and building systems for founda- tions, walls, and roofs. Food The fish farming industry uses boxes made from expanded polystyrene (EPS) for transporting fresh fish in unbroken refrigeration chains. The boxes are light, watertight, and hygienic. EPS boxes are also used by the dairy and meat industries for packing and transportation. Because of the excellent thermal insulation and shock-absorbing properties, EPS boxes reduce food waste. BEWI also offers a wide range of other packaging products to the food industry, including reusable plastic boxes, cartons, bags from different materials, film, tray, bowls, pallets, packing machines and so on. Diversied across end markets Food packaging ~20% Automotive ~5% Building & construction ~60% Other incl. HVAC ~15% 1818 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Pharmaceutical EPS and expanded polypropylene (EPP) are highly functional packaging materials for pharmaceuticals. They keep temperatures stable and are shock- absorbent. E-commerce E-commerce puts high demands on safe and sustain- able flows. By controlling the production chain, BEWI provides a wide and diversified range of packing solutions customized for individual needs. Renovation BEWI’s solutions for renovation are manufactured mainly from EPS and XPS. The products are used both outside and inside buildings, at walls, facades, roofs, floors/ foundations, bathrooms, and basements. Residential housing Technical components made of EPS and EPP are integrated parts of products for heating, ventilation, and air conditioning (HVAC). Infrastructure EPS and XPS play an important role as filling material for road banks and thermal insulation for concrete foundations, tunnels, and railroads. Its wide use is due partly to the stability it provides, and the fact that it makes building more efficient, thanks to its insulating properties. Automotive Vehicles carry a large amount of integrated technical components, many consisting of EPS and EPP. Components of these materials are capturing market share from other types of material because of their thermal insulating and noise reducing properties, in addition of being light and therefore entail less weight in the final products. ~50 000 tanks produced annually contain BEWI’s insulating components ~3 million vehicles produced in 2022 include automotive EPP components from BEWI, for excellent protection and safer journeys BEWI produced 25 million fish boxes in 2022, securing safe transportation of ~2 billion meals and reduced food waste 1919 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Diversified across regions Broad European foothold with strong local presence BEWI has 67 production facilities across Europe, in addition to 13 jointly owned facilities. The company is exposed to a range of industries and geographies, enabling a broad coverage and a strong local presence. Proximity to customers results in less transport and a reduced carbon footprint. Facilities 3x Upstream facilities 57x Downstream facilities 7x Circular facilities 13x Jointly owned facilities Norway 18% Finland 5% Portugal & Spain 7% Poland 5% UK 5% France 3% Iceland 2% Belgium 4% Baltics 3% Other 9% Netherlands 15% Denmark 7% Sweden 7% Germany 10% 2020 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report RAW Investing to increase use of recycled material The RAW segment develops and produces white and grey expanded polystyrene (EPS), including various grades of recycled EPS (general purpose polystyrene (GPPS)), as well as Biofoam, a fully bio-based particle foam. After expanding and extruding the EPS material, also known as EPS beads or styrofoam, the material can be moulded or otherwise processed into several different end products and areas of application. BEWI produces raw material at three facilities located in Porvoo in Finland, EttenLeur in the Netherlands, and, following the integration of Jackon, Wismar in Germany. The total EPS capacity is approximately 280 000 tonnes, of which approximately 50 per cent of the raw material is sold externally, and 50 per cent is sold to BEWI’s downstream facilities, also including facilities owned through minority interests. 26% of net sales 1 41% of total adj. EBITDA 2 1 Based on net sales from external customers 2 Based on total adj. EBITDA for operating segments 3 facilities in 3 countries 2121 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Key achievements • Well managed raw material shortages • Successful implementation of new ERP system • Development project for new extruder in Etten-Leur, the Netherlands, to increase capacity of recycled EPS raw material Key priorities going forward • Maintain ~50/50 balance between external and internal sales • Successful start-up of new extruder in Etten- Leur to facilitate uptake of recycled material • Commercialise RedCert mass balance grades • Integration of raw material production business of BEWI and Jackon Innovation has a high priority in the segment, and RAW has a proven ability to develop new applications as well as designing new products. In 2022, BEWI invested in a new extrusion line at its RAW production facility in Etten-Leur in the Netherlands. Production is expected to start in the second half of 2023, which will increase BEWI’s production capacity of recycled material and grey EPS by approximately 25 000 tonnes. The investment demonstrates the company’s dedication to close the loop and reach its ambitious targets for recycling. The extruder will facilitate the uptake of recycled polystyrene (PS) provided by Circular and enable a higher uptake of recycled material in BEWI’s down- stream units, while at the same time contribute to reduce the company’s greenhouse gas emissions by replacing virgin fossil based raw materials with recycled raw materials. 2022202120202019 206.7 191.2 347.9 418.0 Net sales Million EUR 2022202120202019 5.0 9.4 54.1 57.0 Adj. EBITDA Million EUR Alan Moss, EVP and Head of RAW Alan Moss has been with BEWI since 2007, holding positions as business unit controller and finance manager for the RAW segment, and was appointed managing director for the RAW segment in 2019. Prior to joining BEWI, Moss held various finance positions at, among others, the Dutch companies SGS and Vanbreda Risk & Benefits. 2222 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report 32% of net sales 1 22% of total adj. EBITDA 2 Insulation & Construction (I&C) Insulating to reduce energy consumption The Insulation & Construction (I&C) segment develops and manufactures an extensive range of insulating solutions and systems for the building and construction industry, as well as infrastructure projects, including foundations, walls, roofs, and ceilings. The solutions are mainly composed of expanded polystyrene (EPS), extruded polystyrene (XPS), and polyisocyanurate (PIR). BEWI’s solutions have excellent insulation properties and is therefore contributing to improve energy efficiency of buildings in Europe, meaning reducing energy consumption and greenhouse gas emissions. This is also why many of the insulation solutions are taxonomy eligible. 1 Based on net sales from external customers 2 Based on total adj. EBITDA for operating segments 39 facilities in 12 countries 2323 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Key achievements • Geographic expansion, broadened offering, and strengthened market positions through acquisitions of Jackon, BalPol, Jablite, and Aislenvas • Introduction of new and innovative solu- tions, such as prefabricated elements • Increased sales of products with recycled content Key priorities going forward • Integrate acquired companies, and secure best practice and cross border initiatives • Adjust capacity to market conditions with continued focus on cost control and quality in all deliveries • Increase sales of solutions/systems, prefabri- cated elements, and use of recycled material • Successful start-up of new production lines in Olen and Skövde Some examples of product categories are thermal insulation boards, building systems, sandwich panels for walls, roof- and facade solutions, construction boards for wet rooms, and solutions such as radon barriers and underlayment. The products are known by the brand names Jackodur, Jackofoam, Thermomur, UniPIR, SlimFix, Jackoboard and Tuplex, and many more. Following the launch of the product series GreenLine, including various grades of recycled content, the interest and demand for more sustaina- ble solutions has increased. In 2022, BEWI acquired Jablite, BalPol, Jackon, and Aislenvas, all within the I&C segment, expanding into the UK, the Baltics and Spain, as well as broadening its product offering, and significantly strengthen- ing its market positions in selected geographies. Following the acquisitions, approximately 60 per cent of the company’s total business is exposed to the building and construction industry, including exter- nal sales from RAW. BEWI is investing in one new production line for construction boards in Olen, Belgium, and one for foundation systems in Skövde, Sweden. The new lines are expected to commence operations in second half of 2023. 2022202120202019 139.3 146.6 195.4 333.9 Net sales Million EUR 2022202120202019 22.3 26.5 21.6 31.1 Adj. EBITDA Million EUR Karl Erik Olesen, EVP and Head of Insulation & Construction Karl Erik Olesen became part of BEWI in 2014 and has been managing director for BEWI Denmark since 2017. Olesen was appointed EVP and Head of Insulation & Construction in 2022. Prior to BEWI, Olesen worked for SCA Packaging and DS Smith, which BEWI acquired in 2014, since 1998. 2424 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report 36% of net sales 1 35% of total adj. EBITDA 2 Packaging & Components (P&C) Protecting food and fine goods to reduce waste Packaging & Components (P&C) develops and manufactures standard and customised packaging solutions, as well as technical and automotive components for customers in many industrial sectors. The solutions are composed of a variety of materials, including expanded polystyrene (EPS), expanded polypropylene (EPP), fabricated foam, cardboard, as well as other materials, enabling a broad and complementary product offering. Examples include boxes and bags for transportation of fresh fish and other food, protective packaging for pharmaceuticals and electronics, and components for heating, ventilation, and air-condition systems (HVAC) and other technical installations. 1 Based on net sales from external customers 2 Based on total adj. EBITDA for operating segments 35 facilities in 9 countries 2525 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Key achievements • Broadened offering through acquisition of Trondhjems Eskefabrikk (paper packaging), and the Styropack packaging business in UK • Integration of seven packaging facilities acquired with Jackon • Ramped up volumes at new fish box facility at Senja and secured long-term customer agreement for new packaging facility at Jøsnøya Key priorities going forward • Broaden offering within complementary materials • Secure strong position in high growth markets, such as HVAC and electrical vehicles • Increase content of recycled material in applications • Successful start-up of new packaging facility at Jøsnøya, Norway BEWI is one of the world’s largest suppliers of fish boxes, supplying the salmon farming industry in Norway, the world’s largest exporter of fresh salmon, and the industry for wild caught fish in Portugal. In 2022, BEWI acquired the Norwegian paper pack- aging company Trondhjems Eskefabrikk, broadening its offering within complementary non-fossil pack- aging solutions. Further, through the acquisitions of UK-based Jablite and Jackon, BEWI expanded into new regions and strengthened its market positions. In late 2021, BEWI completed the development of a new fish box facility at Senja, Norway, under long term supply agreement with its customer SalMar. Volumes at the facility ramped up throughout 2022, positively contributing to the group’s results. In addition, the group holds a minority interest in a new fish box facility completed at Iceland in 2022 and is investing in a new packaging facility at Jøsnøya, Norway, under long-term supply agreement with its customer Mowi. The latter is expected to start opera- tions in second half of 2023. 100 150 200 250 300 350 400 2022202120202019 157.6 179.9 295.6 391.9 Net sales Million EUR 2022202120202019 28.9 34.1 40.3 48.3 Adj. EBITDA Million EUR Stein Inge Liasjø, EVP and Head of Packaging & Components Stein Inge Liasjø joined BEWI in 2021 as managing director for the Norwegian operations and was appointed EVP and Head of Packaging & Components in 2022. Liasjø has previously held leading positions within management, finance, and business development at European industrial companies, such as Aker Solutions and Enova. Liasjø has held several board positions, including Aker Engineering & Technology (Shanghai) Co. Ltd., Ren Røros, IT-Nor and Biek. 2626 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Circular Giving new life to used materials Circular is responsible for increasing the group’s collection and recycling of EPS, aiming at making BEWI a fully circular company. Circular offers different solutions for waste management and collection of used material, as well as offering a range of recycled materials. Since the establishment of the business unit in 2018, Circular has launched several initiatives, increasing the group’s collection and recycling capacity. In 2022, BEWI collected close to 33 000 tonnes of EPS for recycling, and had a collection run-rate at year end of approximately 38 000 tonnes. 6% of net sales 1 2% of total adj. EBITDA 2 1 Based on net sales from external customers 2 Based on total adj. EBITDA for operating segments 7 facilities in 4 countries 2727 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Key achievements • Increased collection of EPS for recycling by 73% • Significantly strengthened circular platform and capacity through acquisitions of Berga Recycling and Inoplast • Development project to increase reprocess- ing capacity Key priorities going forward • Continue consolidation within the frag- mented market for recycling • Increase volumes of collected material through control of waste streams • Develop product certifications BEWI has announced an annual target of collecting 60 000 tonnes of EPS for recycling by the end of 2026. The number refers to approximately the volume BEWI puts into the end markets with a lifetime less than one year. The remaining volume is used in products with a lifetime of more than one year, i.e., thermal insulation in buildings and infrastructure projects, bike helmets, car components and similar. The acquisition of the circular platform - and trading company Berga Recycling in June 2022 significantly strengthened the platform for BEWI Circular by granting greater access to waste streams. The compa- ny’s collection and reprocessing capacity was further strengthened through the acquisition of the Czech company Inoplast in December 2022. 2022202120202019 2.5 6.3 24.0 63.1 Net sales Million EUR 2022202120202019 -0.9 -1.2 0.6 2.5 Adj. EBITDA Million EUR Henrik Ekvall, EVP and Head of Circular Henrik Ekvall joined BEWI in 2020 as managing director of Circular. Prior to this, he has held leading positions at international companies in the oil and gas industry, such as Statoil and Nynas, mainly within finance and business controlling. 2828 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Key partnerships The transition towards a circular economy requires a systematic shift, fundamentally rethinking the way products are produced and used. Working in partnerships is therefore of crucial importance to build necessary infrastructures and alliances to accelerate the transition to a circular economy and an inclusive society. These are BEWI’s key partnerships: The association for European manufactures of Expanded Polystyrene The association for European Manufacturers of Expanded Polystyrene (EUMEPS) is the voice of the Expanded Polystyrene (EPS) industry. Representing 23 national associations in Europe, EUMEPS’ activities focus on two main market segments: Construction and Packaging. The association is committed to sustainability and have joined forces to reach the ambitious European recycling targets by 2025. European Plastic Pact BEWI was one of the first signatories of the European Plastic Pact. The European Plastic Pact is a public-pri- vate coalition that forms a European network of governments and frontrunners from across the whole value chain. The aim of the pact is to set ambitious objectives and to encourage cooperation, innovation, and harmonisation at the European level to bring about a truly circular European plastics economy. The Pact works together towards four goals aimed at improving recyclability and reusability, responsible use, recycling capacity and the use of recycled content. Operation Clean Sweep To demonstrate the company’s commitment to a clean environment BEWI is a partner in the interna- tional Operation Clean Sweep (OCS) initiative and have signed the Pledge to prevent Plastic Resin Loss from the company’s production facilities. The commitment imposes all production facilities to identify high pollution risk areas and to mitigate risks through good housekeeping and pellets containment practices to work towards achieving zero pellet loss. As a partner in OCS, BEWI is obligated to implement and comply with the OCS standard and to conduct annual site audits. The Polystyrene Loop Cooperative The PolyStyreneLoop Cooperative is set up to demonstrate the feasibility of a large-scale demo plant as a closed-loop solution for the recycling of polystyrene (PS), insulation from waste and the recov- ery of bromine. The planned demonstration plant in Terneuzen, Netherlands, will work with the CreaSolv® Technology. The technology is a development of Fraunhofer Institute and CreaCycle GmbH. 2929 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report ESG performance report A circular economy and an inclusive society ABOUT THIS REPORT This report has been prepared with reference to the Global Reporting Initiative (GRI) Standards (2021). The report covers the company’s most significant impacts on economy, environment, and people, including impacts on human rights and how BEWI ASA manage these impacts for the calendar year 2022. The report aligns with the company’s financial reporting period. Companies where BEWI has a majority share- holding are included within the scope of the report. Companies acquired during 2022 (except from Berga Recycling Inc) are not included but will be included in the report for 2023. This applies to the following companies: Trondhjems Eskefabrikk AS, Jablite Group Ltd, UAB Baltijos Polistirenas (BalPol), Jackon Holding AS, Aislamientos y Envases, S.L. (Aislenvas), and Inoplast s.r.o. This report is BEWI’s Communication of Progress (COP) to demon- strate its commitment to the United Nations Global Compact, the Norwegian Transparency Act, and the EU Taxonomy. WE SUPPORT 3030 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report ENVIRONMENT • 73% increase in EPS collected for recycling • 15% reduction in waste generation • 78% reduction in waste sent to landfill • 31% increase in waste used for recycling • 21% reduction in scope 2 GHG emissions SOCIAL • 61% of employees have a development plan • 65% of procurement spent assessed for ESG criteria • 82 community engagement projects GOVERNANCE • 100% completion of anti- corruption training Key achievements in 1 43 000 tonnes CO 2 saved through the collection of EPS for recycling – equivalent to average annual emissions for 7 000 persons 1 Compared to 2021. 3131 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Material ESG topics BEWI’s double materiality assessment resulted in eight material topics with an external and internal impact. ENVIRONMENT Climate change mitigation The majority of BEWI’s raw materials are based on petrochemicals, which contribute significantly to the company’s GHG emissions. To mitigate climate change, the company works actively with all parts of its value chain, including its suppliers, to achieve improved resource efficiency and, in particular, reduction of CO 2 emissions. Climate change adaptation The impacts and consequences of climate change present risks and opportunities to BEWI. To manage these risks and opportunities, BEWI is in the process of integrating the management of climate risks into the company’s daily operation in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. Resource efficiency and circularity BEWI produces plastic-based products. In a linear economy, these products contribute to greenhouse gas (GHG) emissions and if improperly managed after use, negative impacts on the environment. Embracing the model of a circular economy enables the company to reduce transition risks by increasing resource efficiency, reducing GHG emissions, and providing the market with more sustainable solutions. Biodiversity and ecosystems BEWI’s production facilities can impact local ecosystems through the pollution of microplastic if materials are not managed properly. BEWI is committed to preventing such negative impacts through the company’s commitment to Operation Clean Sweep and to promoting biodiversity that ensures resilient ecosystems that deliver vital ecosystem services. SOCIAL Working conditions BEWI’s employees are the company’s most valuable resource. Ensuring safe working conditions for the employees and creating a culture where employees can grow and reach their full potential is a priority for the company. Human rights BEWI is exposed to human rights issues, by operating across different geographical regions and by having a global supply chain. Assessing the company’s own operations and supply chain has a high priority. Local communities BEWI is operating across different regions and is present in many local communities. The company is committed to mitigate negative impacts especially concerning the migration of microplastics, to have a good dialogue with neighbours, and to actively engage in the communities where it operates. GOVERNANCE Ethical business conduct BEWI has a global supply chain and unethical business risks are present in all countries and sectors where the company operates. To prevent corruption and other unethical practices, BEWI is committed to meet the highest ethical standards when conducting its business and to work actively with its value chain in such regard. 3232 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Identification of material topics BEWI’s operations influence a diverse group of stakeholders. Engagement with key stakeholders is essential to address critical issues and the management of risks and opportunities. Identifying key ESG topics To ensure that BEWI identifies the most important ESG topics, the company undertakes a double materiality assessment annually in accordance with GRI standards (2021). The assessment identifies the company’s most significant impacts on the economy, environment, and people, including impacts on human rights. The 2022 assessment was also conducted in accord- ance with the proposed European Sustainability Reporting Standard (ESRS). Potential material topics were identified by using the sector standards, a desktop review of relevant competitors, academic literature, media reports, reporting standards, regu- lations and engagement with key stakeholders and experts. BEWI identified eight prioritised stakeholder groups: suppliers, customers, non-governmental organisa- tions, employees, authorities, local communities, the industry, shareholders, and other investors. The stakeholders were asked to consider BEWI’s impact on climate, the environment, society, and the economy (external impact). Additionally, they were asked to consider how changes to market conditions caused by ESG issues could impact BEWI’s enterprise value (internal impact). To ensure that stakeholders’ views were included in the analysis, the findings from the interviews were presented and calibrated in a workshop with BEWI’s Director of Sustainability, Chief Human Resources Officer, and Chief Legal Officer. The significance (likelihood and severity) of each impact was rated by experts and stakeholders in conjunction with executive management to inform financial value creation. Authorities Shareholders & creditors Suppliers Employees Customers Local communities NGOs The industry 3333 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report The assessment resulted in three additional topics being considered material: (1) local communities, (2) climate change adaptation and (3) biodiversity and ecosystems. Further, already identified material topics were re-phrased to be more specific with regards to the value drivers for BEWI and its stakeholders. • Environment: Climate change was replaced by climate change mitigation and climate change adaptation to emphasise the importance of the work to reduce the company’s greenhouse gas emissions and to mitigate the company’s risks related to climate change adaptation. Circular economy was rephrased to resource efficiency and circularity and extended to include the topic of energy scarcity. Biodiversity and ecosystems was added as a new material topic. • Social: Health and safety was rephrased to working conditions and entails talent attrac- tion and retention, diversity in workplace and employee work-life balance. Supply chain man- agement was rephrased to human rights. This update reflects in a better way the ongoing work regarding human rights both internally in BEWI and in the company’s supply chain and business relationships. Local communities were added as a new material topic, due to the potential negative impact that microplastic pollution from the com- pany’s production facilities might have on local communities. • Governance: Governance originally included corruption and was rephrased to ethical business conduct, which also includes anti-competitive practices and unethical business conduct in the supply chain. Going forward, BEWI will strengthen the double materiality assessment giving more emphasis on financial materiality to align the assessment with the proposed European Sustainability Reporting Standard. The full report of the materiality assessment for 2022 can be found on BEWI’s corporate website. 3434 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Management of material topics BEWI’s approach to ESG is based on a continuous assessment of material topics to BEWI and its stakeholders. Identified material topics are addressed throughout the organization, to mitigate risks and explore opportunities. Governance The board of directors has the highest responsibility to oversee the integrity of the work with ESG, while the management sets the strategic direction and monitors progress towards the targets. Within the management team, the director of sustainability together with the Chief human resources officer (CHRO) and the Chief legal officer (CLO), are responsi- ble for the company’s ESG work, whereas the director of sustainability is responsible for the daily coordi- nation and follow up across the group. Local units have sustainability- and human resource managers responsible for compliance with group sustainability strategy and policies. Governing documents BEWI’s policies and procedures inform how the group, and its business partners shall conduct busi- ness. BEWI is in the process of developing a policy and a management approach for material topics that will govern the way BEWI manages each topic. The board of directors has the overall responsibility for compliance and governing documents, while man- agement has the day-to-day responsibility for the company’s conduct and monitoring of progress. Sustainability strategy BEWI is committed to lead the industry’s way towards a circular economy and an inclusive society. The com- pany’s sustainability strategy outlines its commitment towards 2030 and is integrated in the organization with clear targets and action plans. The targets are reported and monitored on a monthly and annual basis. See progress report in appendix. Integrating and monitoring of material topics The board of directors approves the annual materi- ality assessment. The result from the assessment is consequently developed and anchored in the opera- tional management team (OMT) to ensure a common understanding of key challenges and opportunities, BEWIs governing documents • Code of Conduct • Sustainability strategy • Human resource policy • GDPR policy • Anti-corruption policy • Competition law policy Mapping material topics Evaluate and revise Report Integrate in Operational Management Team Approved by Board of Directors Prioritise material topics 3535 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report targets and key performance indicators, agreement on specific actions with clearly assigned respon- sibilities and ensuring appropriate training and communication throughout the organization. The company reports on a monthly and an annual basis to ensure progress and compliance with the targets and strategic direction. Sharing knowledge and experience To increase awareness of, and to ensure compliance with, policies and the management approach, courses are held throughout the organisation. Managers within sustainability and human resources conduct monthly meetings to share experience, and to discuss common opportunities and challenges. Ensuring compliance BEWI works to ensure compliance with any prevail- ing legislation and applies recognised norms and standards relevant for the scope of work, regardless of geographic location. Compliance is monitored through external audits, as well as the company’s monthly and annual reporting. BEWI’s governing poli- cies are annually reviewed by the board of directors and updated to reflect the company’s approach and industry’s best practices. 3636 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report A circular economy offers a framework to move towards more sustainable production and consumption. For BEWI this means focusing on resource efficiency throughout its value chain, utilising resources as efficiently as possible, reducing consumption, and keeping the value of products and materials in the loop for as long as possible. In addition, it includes the company’s dedication to the transition to renewable energy sources. Material environmental topics: Climate mitigation Climate adaptation Resource efficiency and circularity Biodiversity and ecosystems Environmental impacts and opportunities 3737 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report ENVIRONMENT Climate change mitigation BEWI’s operations contribute to greenhouse gas (GHG) emissions, mainly through the consumption of styrene, a fossil based raw material. BEWI works to reduce its emissions by adopting a circular economy model and by increasing its use of renewable energy sources, both of which are key elements in the company’s strategy to mitigate climate risks and make the value chain more resilient. Key risks • More stringent regulations on energy efficiency and GHG emissions Key opportunities • Circular business model • Energy efficiency requirements in the building & construction industry • Electrification of the car fleet 3838 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts In 2022, BEWI continued to increase its efforts to address its climate impacts, gaining more insights on the company’s GHG emissions. Increased knowledge of GHG emissions BEWI reports its GHG emissions in accordance with the GHG protocol including emissions in scope 1, 2, and 3. The last two years the company has worked to collect data on the relevant categories in scope 3. By completing the overview of the company’s GHG emissions for all scopes, the company is ready to develop a climate reduction strategy in line with the science based targets initiative (SBTi). BEWI is currently in the first stages of implementing the SBTi corporate standard, including developing a climate reduction plan (scope 1, 2 and 3) of GHG emissions towards 2030 and 2050. Decarbonizing the value chain The largest share (61 per cent) of BEWI’s GHG emis- sions originates from the company’s consumption of styrene. The companys work to increase the share of recycled and renewable raw materials is the most effective action to reduce the company’s GHG emissions. To further reduce the companys GHG emissions, BEWI has strengthened its collab- oration with strategic suppliers to map and discuss opportunities to increase circularity and reduce GHG emissions. Energy efficiency and transition to renewable energy sources The transition to renewable energy sources remains a challenge. In 2022, BEWI company established an energy committee, working to improve energy efficiency and increased use of renewable energy sources. During 2022, several pilot projects were conducted, aiming at enabling the company to make informed decisions with regards to investments in energy efficiency and transition to renewable energy sources. Our progress BEWIs total GHG emissions were 710 111 tonnes, whereas scope 1 and 2 accounted for 9.5 per cent and scope 3 for 90.5 per cent. Scope 1 GHG emissions BEWI’s scope 1 GHG emissions are mainly caused by consumption of natural gas used to produce steam for moulding of the company’s products. In 2022, the emissions increased by 12 per cent despite a decrease in the consumption of natural gas by 6 per cent. The increase is explained by a change to more GHG intensive energy sources. This is a result of a chal- lenging energy market with shortage of energy and high prices. To ensure operations and cost control, several of the produc tion facilities have changed their energy source from LPG to LNG, and some have been forced to switch from LPG to diesel, which can explain the increase in GHG emissions. Scope 2 GHG emissions BEWI’s scope 2 GHG emissions are caused mainly by the company’s electricity consumption (87 per cent) and purchased steam (13 per cent). In 2022, the emissions decreased by 21 per cent, explained by a decrease in the use of electricity (2 per cent) and steam consumption (9 per cent), and an increase in the share of renewable energy sources from 19 to 21 per cent. Scope 3 GHG emissions The largest share of BEWI’s GHG emissions lies in scope 3 and amounted to 91 per cent of the compa- ny’s emissions in 2022, in line with the share in 2021. Purchased goods and services were 94.8 per cent of scope 3 emissions whereas 61 per cent came from the consumption of styrene. The emissions increased by 2 per cent compared to 2021, due to inclusion of several new categories which constituted for 7 per cent of the emissions within this category. Disregarding these, the company had a reduction of GHG emissions of 2.7 per cent compared to 2021. Emissions from waste generated in operations decreased by 93 per cent compared to 2021. This is mainly explained by increased data quality on final treatment of solid waste, as well as an overall decrease in waste production of 15 per cent. Emissions from business travels increased by 178 per cent owing to a “return to normal” after the Covid-19 pandemic and increased travel to integrate newly acquired companies (see progress report for more detailed information). BEWI’s top 5 sources of GHG emissions Purchased styrene Direct emissions (Scope 1) Plastic packaging Transportation Externally purchased EPS 61.0% 6.2% 4.5% 4.5% 3.2% 3939 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Key targets • 50% recycled or renewable raw materials • 50% renewable energy sources • 50% renewable transportation Key priorities going forward • Integrate a climate mitigation policy and management approach • Develop a climate reduction plan (scope 1, 2 and 3) in line with Science Based Target Initiative (SBTi) • Collaborate with raw material and trans- portation suppliers to decarbonize the value chain • Increase the share of recycled raw materials • Increase the share of renewable energy sources Indirect energy-related GHG emissions (market-based) – scope 2 Tonnes CO 2 eq 0 5000 10000 15000 20000 25000 30000 35000 202220212020 27 398 30 007 23 652 Scope 2 Scope 2 M&A 86.7% 13.3% Electricity (market-based) Purchased steam Direct GHG emissions – scope 1 Tonnes CO 2 eq 0 10000 20000 30000 40000 50000 202220212020 37 712 39 452 43 995 Scope 1 Scope 1 M&A 97.6% 2.4% Natural gas, oil and diesel Internal transport Other indirect GHG emisssions – scope 3 Tonnes CO 2 eq 0 100000 200000 300000 400000 500000 600000 700000 800000 202220212020 606 081 636 600 642 463 Scope 3 Scope 3 M&A Category 1 - Purchased goods and services Category 4 & 9 - Up- and Downstream transport Category 5 - Waste generated in operations Category 6 - Business travel Category 7 - Employee commuting 94.8% 5.0% 0.1% 0.1% 0.1% 4040 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report BEWI Portugal installs solar panels – providing cleaner energy to families In 2022, BEWI’s operation in Portugal installed solar panels at two of their locations, in Peniche and Santo Tirso, in partnership with Greenvolt Communities. The solar panels have a total capacity of more than 1 400 kWp, being able to generate 1 922 MWh annually, and potentially reducing the GHG emissions by 500 tonnes per year 1 . The project is an important milestone for the company’s transition to renewable energy sources and has enabled the two production facilities in Portugal to increase their share of renewable energy from electricity consumption to 35 per cent. All the energy that is produced but not used will be transferred through Greenvolt Communities and shared with up to 800 families and small businesses within 4 km of their facilities. “Knowing for several years the importance of reducing the environmental impact of our activities, the transition to renewable energy has become a priority. Through the partnership with Greenvolt Communities, we are taking a leading position in the decarbonization process, which is essential both for the company and for our industry.” Carlos Santos, Managing Director BEWI Portugal 1 Compared to consumption of energy from the national grid. 4141 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report ENVIRONMENT Climate change adaptation Climate change has an impact on BEWI’s operations and represents financial risks and opportunities. The company is exposed to both physical and transitional risks and opportunities. BEWI will mitigate its climate related risks by integrating the recommendations from the Task force on Climate-related Financial Disclosures (TCFD) and by adapting its business to a circular economy based on renewable energy sources, both of which are key elements in the company’s strategy to make value chains more resilient. Key risks • Flooding and extreme weather • More stringent regulations on GHG emissions • Limited access to waste materials for recycling • Change of market preferences for plastic packaging Key opportunities • Circular business model • Energy efficiency requirements in construction sector • Electrification of the car fleet 4242 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts and progress In 2022, BEWI strengthened its efforts to address impacts on climate change adaptation, gaining more insights about its physical and transitional climate risks and opportunities. Governance and management of climate risks BEWI started the work to integrate climate change adaptation in 2021, with an external assessment of the company’s governance and management based on the recommendations from TCFD. The work continued in 2022, focusing on integrating the management of climate risks and opportunities into the overall risk and management systems as well as the company’s strategy processes. To ensure integra- tion of climate risks and opportunities in acquisition processes, a due diligence checklist has been devel- oped, to ensure that climate relevant information is considered. Mapping of physical and transition risks A mapping of physical and transitional risks was conducted by the management in 2021 and a physical risk assessment 1 of all production facilities and warehouses was conducted in 2022. The company are in the process of arranging workshops, aiming at identifying potential impact on facilities and operations, and agreeing on mitigation measures. Climate risk scenario analysis To increase the understanding of potential financial risks and opportunities a climate risk scenario analysis has been conducted. The aim was to better under- stand how climate change under various transition scenarios, could impact the company both in the short and long term. This study modelled three key scenarios each reflecting different emission and temperature paths, to assess the economic impacts of climate change and the low-emission transition from 2020 to 2070. A financial disclosure of material risks identified will be finalised in 2023. Integration of TCFD in daily operation In 2023, BEWI will continue the work to finalise the disclosures in line with the TCFD recommendations with an emphasis to increase knowledge about climate related risks and opportunities and to ensure that these are integrated in both governance, strat- egy and management approach and are part of the companys daily operation. Key targets • Integrate and comply with TCFD recommendations Key priorities going forward • Integrate a climate change adaptation policy and management approach • Finalise integration of climate risks in the company’s overall risk management system • Implement measures to reduce physical climate risks at exposed production facilities • Assess financial exposure and determine risks and opportunities material to the business model and strategy • Finalise disclosures in line with TCFD recommendations 1 The physical risk assessment was also part of the work towards EU taxonomy alignment, where the company have evaluated the resilience of taxonomy- eligible assets in changing and extreme weather. 4343 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report ENVIRONMENT Resource efficiency and circularity In a linear economy, BEWI’s products contribute to greenhouse gas (GHG) emissions and, if improperly handled after use, negative impacts on the environment. Adopting a circular business model is crucial for BEWI to improve resource efficiency, and to reduce GHG emissions and potential negative environmental impacts. Key risks • Access to high quality waste materials Key opportunities • Circular business model • Creating value in re-usable service-based products 4444 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts The company’s sustainability strategy sets out BEWIs commitment to resource effficiency. In 2022, BEWI continued its work to increase resource efficiency throughout the value chain by focusing on the company’s key principles of a circular economy. To be lean - increasing resource efficiency In 2022, the company conducted further testing to use recycled raw materials in its downstream production facilities. The group has imposed strict requirements to all its downstream facilities to dra- matically increase the use of recycled content, and expects this to result in a significant improvement in the share of recycled raw materials for 2023. To keep – ensuring recyclability and reuse An important prerequisite for circularity is to make sure that products are resource efficient and recyclable. A milestone in 2022 was the RecyClass certification of recyclability 1 and the REDcert certifi- cation of several of the company’s locations enabling the company to provide customers with a third-party audited certificate on recycled content. To close – making sure resources are put back into the cycle BEWI has announced a target of an annual collec- tion of 60 000 tonnes of EPS. The number refers to approximately the volume BEWI puts into the end markets with a lifetime of less than one year. The target is anchored in the company’s sustainabili- ty-linked finance framework. Under the framework, BEWI has committed to collecting 45 000 tonnes of used EPS for recycling by the end of 2024, and 60 000 tonnes by the end of 2026. To increase the companys capacity to utilize the collected raw materials, BEWI is working to install a new EPS extruder which will increase the capacity by approximately 25 000 tonnes per year. The extruder will utilize recycled polystyrene provided by the Circular division and enable BEWIs downstream production facilities to increase their share of recy- cled materials. Our progress To enhance circularity, BEWI works with resource efficiency throughout its value chain. The aim is to build long-term resilience, create business and economic opportunities, and provide solutions that benefit the society and the environment. 1 EPS fish boxes and EPS packaging for appliances. Per cent Progress – becoming circular Baseline 2020 Status 2021 Status 2022 Target 2030 0 20 40 60 80 100 Cut-o waste from production Waste sorted out for material recycling Collected materials Recycable produducts Rawmaterial consumtion going to products for reuse Renewable and recycled raw materials To close To keep To be lean 4545 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report To be lean – increasing resource efficiency BEWI is targeting to use 50 per cent recycled and renewable raw materials in their production by 2030. In 2022, the share of recycled and renewable raw materials where 12 per cent. This is an increase of 1 per cent compared to 2021 and a result of continuous work throughout the company’s value chain. To keep – ensuring recyclability and reuse BEWI is committed to produce recyclable and reusable products. In 2022, 99 per cent of products supplied to the market were recyclable. 2 per cent of the company’s raw materials consumption was used for products in re-use schemes, an increase of 357 per cent compared to 2021. To close – making sure resources are put back into the cycle BEWI is targeting zero waste from its production. In 2022, the company had 9 132 tonnes of production cut-offs of which 8 044 tonnes, representing 88 per cent, were recycled back into production. BEWI’s total waste production amounted to 16 990 tonnes in 2022, a reduction by 13 per cent from 2021. 68 per cent of this were sorted for recycling, an increase of 31 per cent compared to 2021. In 2022, BEWI collected a total of 117 857 tonnes of waste. Of this, 32 629 tonnes were EPS waste, representing an increase of 73 per cent compared to the EPS material collected in 2021. This is a sig- nificant increase from 2021 and is mainly explained by acquisitions and investments in organic growth initiatives the last year, especially the acquisition of the trading platform Berga Recycling in June 2022, which strongly increased the amount of collected and traded materials. Key targets • 50% recycled or renewable raw materials • 100% recyclable products • 0% cut-off waste from production • 80% waste sorted out for material recycling • 60 000 EPS collected annually for recycling Key priorities going forward • Continued focus on resource efficiency • Continued focus on recyclability and reusability when designing new products • Increase use of recycled raw materials in own production • Increase collection capacity • Increase recycling capacity Waste handling Waste (tonnes) 0 5000 10000 15000 20000 25000 20222021 19 382 16 990 Waste sorted for recycling Waste sorted for reuse Waste sorted for incineration Waste sorted for landll 7% 31% 62% 2% 1% 30% 68% Materials collected for recycling Tonnes 0.000000 18571.428571 37142.857143 55714.285714 74285.714286 92857.142857 111428.571429 202220212020 86 125 118 750 118 338 Collected materials total Collected materials total M&A 4646 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report ENVIRONMENT Biodiversity and ecosystems Through the production of plastic raw materials and products, there is always a risk of plastic pellets getting into the surrounding environment. BEWI is continuously monitoring impacts on biodiversity and ecosystems and works to increase knowledge and awareness among its employees. Key risks • Migration of micro plastics 4747 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts and progress In 2022, BEWI focused on increasing its knowledge and efforts to mitigate potential negative impacts on biodiversity and ecosystems. The implementation and certification of environmental management systems has had – and is having a high priority to keep any negative impacts to an absolute minimum. Certified management systems In 2022, the company’s top priority was to strengthen environmental standards and frameworks, support- ing its facilities to ensure no negative impacts on biodiversity and ecosystems. BEWI has also signed the Operation Clean Sweep to reduce the loss of pellets, flakes, and powder from the company’s processing facility into the environment. The com- mitment imposes all production facilities to identify high pollution risk areas and to mitigate risks by installing filters, netted fences, rules for transportation and storage, daily cleaning routines and training of employees. All deviations, regardless of severity, are followed up with an analysis of root cause and imple- mentation of preventive measures. All production facilities are well underway with the implementation og both ISO 14001 and OCS which will be completed in 2023. Mapping of protected areas To increase awareness of the importance of protecting ecosystems and biodiversity and to ensure alignment with the EU’s taxonomy on Do No Significant Harm (DNSH), BEWI has conducted a mapping of protected areas. The mapping showed that 10 (21 per cent) production facilities are located within 1 kilometre from a protected area and are considered potentially very high-risk areas. Taskforce on Nature-related Financial Disclosures BEWI has followed the work with the development of Taskforce on Nature- related Financial Disclosures (TNFD). The company is in the first stage to integrate the framework that will guide the work related to biodiversity and ecosystems going forward. Key targets • 100% production facilities certified with ISO 14001 • 100% compliance with Operation Clean Sweep • Zero deviations from environmental management systems Key priorities going forward • Integrate biodiversity and ecosystem in environment policy and managment approach • Certification of ISO 14001 and Operation Clean Sweep for all production facilities in 2023 • Integration of Taskforce Nature-related Financial Disclosure 20% of BEWI’s production facilities have implemented Operation Clean Sweep 60% of BEWI’s production facilities have ISO 14001 certification 31 deviations from environmental management system 4848 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI has an important role to play in securing an inclusive society, by being a responsible employer, partner, and neighbour. BEWI can make a difference for people and communities in the countries where it operates by tackling anti-corruption, upholding human- and labour rights, and ensuring inclusive decision-making and community engagement. Material social topics: Working conditions – Health and safety – Employees wellbeing Human rights Local communities Social impacts and opportunities 4949 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report SOCIAL Health and safety Ensuring safe working condition is paramount in everything the company does. BEWI has a target of zero accidents when it comes to health and safety. At the end of 2022, BEWI had 67 production facilities in 13 European countries, including companies acquired during 2022 (not included in this ESG report). Employees and workers at the facilities are exposed to physical work-related risks of injuries and accidents. The main work- related hazards are related to the company’s chemical production facilities, due to handling of chemicals and dangerous substances. Key risks • Loss of awareness of risks in daily work impacting the safety culture • Handling of hazardous material in chemical manufacturing plants Key opportunities • Training, awareness, and shared learnings 5050 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts The company works actively to ensure that pre- ventive measures are implemented, and that safe working conditions are maintained in accordance with internal policies, local laws, and regulations. All production facilities must be ISO 9001 certified. BEWI seeks to provide a working environment and culture where health and safety is integrated in the business. To increase knowledge of health and safety across the organization, a survey was sent out in 2021 to map practices regarding management, as well as awareness, of risks and company policies. As a follow up, a new survey was sent out in the end of 2022 and the results will provide valuable information of gaps to fill based on the health and safety policy and the continued work on health and safety. Implementation within the local business units will be secured and followed-up within the segments and on group level. Specialised training and qualifications In highly regulated work places, such as the chemical production facilities mentioned above, workers are offered specialised training programmes and pro- cesses for training certification. At regular production facilities, introduction training programmes are conducted on a regular basis in line with local legisla- tions or site-specific standards. Our progress In 2022, BEWI reported a total of 54 accidents com- pared to 26 accidents in 2021, with an increase of severity rate from 0.06 per cent to 0.10 per cent. Of these accidents, 25 had less than 5 days of sick leave and 7 accidents resulted in more than 21 days of sick leave. The main types of accidents are fall or cuts. All accidents, regardless of the severity, were followed up with an analysis of root cause and implementation of preventative measures. 2020 2021 2022 Target Total no. of accidents 41 26 54 0 Frequency rate 0.01% 0.01% 0.01% Severity rate 0.11% 0.06% 0.10% No. of working days lost 359 311 536 A communication and awareness campaign on health and safety is under implementaton in 2023 across all business units, increasing focus on key risks and strengthening the culture of safety. Key targets • 100% ISO 9001 certified • Zero accidents Key priorities going forward • New health and safety policy and management approach at group level • Training and awareness of new policy and management approach 54 accidents 62% ISO 9001 certified 5151 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report SOCIAL Employees wellbeing The employees are BEWI’ most valuable resources and key enablers for continuous growth and development. Creating a learning environment which recognises the contribution of colleagues and providing development opportunities are priorities for BEWI. Key risks • Talent shortage in key markets • Employee turnover Key opportunities • Attracting a diverse workforce • Internal career opportunities 5252 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts and progress The companys human resource policy sets out BEWI’s commitments to ensure workers wellbeing and development. The policy stipulates employees’ rights to form or join a trade union, and the compa- ny’s respect for the rights of its employees and their trade unions to negotiate collective agreements. Employee engagement and development To ensure competitive advantages and maintain a sale driven culture, it is crucial to attract people with the right values, competencies, and skills. BEWI believes in developing and bringing out the best in its employees. Most learnings and competence development happen through “on-the-job-training”, with internal recruitments providing opportunities for personal growth. BEWI targets that all employees should have a development plan and annual reviews. In 2022, BEWI conducted an employee engagement survey, BE-Heard, as a follow up of the pilot survey conducted in Sweden in 2021. The survey will be an annual process and an important follow-up mech- anism for continued improvements for employee motivation and engagement. The results from the 2022 survey were along the same lines as the pilot survey, showing highly engaged leaders with a good understanding of the overall strategy which is a pre- requisite to further involve employees. Rapid decision making in combination with the willingness to learn from mistakes are also shown as strengths from the results and is coming from the entrepreneurial spirt of the company. Improvement areas are to further clarify overall goals and align them with team and individual goals which are expected to lead to an increased employee engagement index. Diversity and equal opportunities BEWI provides equal opportunities irrespective of race, ethnical background, religion, nationality, gender, marital status, age, or sexual orientation. This applies to all employees, potential employees, business partners, and other stakeholders. Everyone working for BEWI, in particularly those in a manage- ment position, has a responsibility in their daily work to ensure compliance to these commitments. At the end of 2022, BEWI’s gender mix was 71 per cent men and 29 per cent women (excluding acquired companies). The executive management team consists of 50 per cent men and 50 per cent women, while the board of directors has three men and two women. In the results from the BE-Heard survey, women show higher engagement and opportunities for development is considered the same for men and women. In 2023, targets will be established with regards to gender mix based on organizational levels, and appropriate activities will be defined to secure pro- gress. Being a diverse workplace and providing equal opportunities for all employees is considered impor- tant in attracting top talents. BEWI Business school – Leadership programmes BEWI Business School was launched in 2020 to facili- tate people- and leadership development internally. In 2022, BEWI conducted the first two programmes as “classroom trainings”: 1. The Growth programme: A talent development programme including 18 participants, focusing on preparing employees to take the next step in BEWI, building network and learning about the business 2. The Business & Leadership Programme: A leader- ship programme including 20 participants, mainly from the business unit management teams, focus- ing on various leadership tools and techniques Key targets • 100% employees with a development plan • Gender mix of managers and non-manag- ers reflecting overall company diversity Key priorities going forward • Further development of leadership programmes to support engagement throughout the organisation • Ensure a “healthy” gender mix in key positions 61% of employees have a development plan Zero cases reported regarding equal opportunities or harassment 5353 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report SOCIAL Human rights BEWI has a global supply chain and is therefore exposed to challenges related to human rights, especially in regions and industries where regulations are weak, and the implementation of local legislation is defective. BEWI has approximately 7 500 suppliers, of which the majority is based in Europe and a few in Asia. Today, 10 per cent of the suppliers account for 90 per cent of the purchasing volume. The company will work to reduce the number of suppliers to increase control of human rights violations related to their operations. Key risks • Bad reputation • Disruption in supply chain • Lack of transparency in tier 2 and 3 • Labor and working conditions Key opportunities • Reduce supplier portfolio • Transparency in supply chain • Capacity building and training • Strengthen due diligence 5454 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts In 2022, BEWI increased the awareness of its suppliers environmental, social, governance and human rights performance. The companys goal is to respect and promote all international recognized human rights in own operations and in the value chain. 1 Improving the management of human rights To ensure compliance with the Norwegian Transparency Act, BEWI has evaluated existing poli- cies and its management approach to ensure that the company meets legal requirements and the method- ology for due diligence assessment, defined by the OECD and the UN’s guiding principles for businesses and human rights. Based on the assessment, BEWI is in the process of integrating a human rights policy, an management approach, and a Code of Conduct for suppliers. Further, the company works to formalise the way findings are reported and to develop an internal audit system. Identifying salient human rights issues A salient human rights mapping was conducted in 2022, with the aim to identify and prioritise the management of human right issues. Based on the result from the mapping BEWI is in the process of developing an action plan for each salient issue that will guide how the company will manage and monitor each issue going forward. Due diligence of suppliers and business partners The launch of BEWI Partner was a significant mile- stone in 2021 and paved way for a systematic due diligence of the company’s suppliers (according to corporate governance, human rights, health and safety, environment, and quality). To ensure that the assessment covers more detailed information, especially related to human rights, the assessment has been expanded to include ILO Minimum Age Convention no 138, ILO Forced Labor Convention no. 29, and the ILO Abolition of Forced Labor Convention and will be launched in the BEWI Partner 2.0 in the second quarter of 2023. Moreover, a risk assessment module was added to the platform, to strengthen the assessment to identify potential risks and to include procedures for how to respond and mitigate identified risks. Moreover, a Visual Observation Form has been developed for assessment during supplier factory visits (covering health and safety, environ- ment, and labor conditions) which will be included in the overall due diligence work. Increasing knowledge within the organisation BEWI is committed to build knowledge of human rights and works to ensure that 100 per cent of relevant employees are trained in human rights. This includes establishing a company toolbox with courses, manuals, presentations, and best practices to be easily accessible for all employees. 1 BEWI is committed to respect and comply with: International Bill of Rights, The UN Guiding Principles on Business and Human Rights, The UN Global Compact 10 principles, The ILO Conventions, The OECD Guidelines for Multinational Enterprises Collaborate for development and remedy Policy and management approach Track implementation and results Respond to mitigate risk Communicate progress Assess and identify signicant risk Due diligence management approach for suppliers 5555 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our progress In 2022, the total number of suppliers assessed for ESG criteria’s including human rights impacts was 220, which accounts for 65 1 per cent of the compa- ny’s procurement volume. BEWI has 12 suppliers in Asia which have been identi- fied as potentially high risk due to their geographical location. During 2022, 6 suppliers were visited with onsite audits and approved. 4 were approved through the companys assessment platform BEWI Partner. For 2023, BEWI will assess the remaining 2 suppliers for potential negative social and environ- mental impact. Of the 220 suppliers assessed in BEWI Partner, 2.7 per cent were identified as having potential negative social impacts and 13 per cent were identified as having potential negative environmental impacts, lacking to document policies and procedures. Among the identified suppliers, no improvements were agreed upon, and no relationships were termi- nated. During 2022, BEWI had 191 new suppliers. Of these, 12 (6 per cent) of the largest suppliers were assessed in BEWI Partner using ESG criteria. BEWI acknowledges that the management approach for supplier assessment has not been well enough implemented both in terms of contracting new sup- pliers and to mitigate potential risks identified. Going forward, BEWI will focus on ensuring compliance with the company’s policies and management approach to ensure that all deviations from the policy and man- agement approach will be reported and followed up. Key salient human rights issues • Working conditions: logistics, tier 2-3 suppliers • Hazardous materials: own operation and supply chain • Health and safety: own operation and supply chain • Forced labour: logistics supply chain • Discrimination: own operation • Corruption and unethical behaviour: own operations and supply chain 2.7% suppliers identified having potential negative social impact 13% suppliers identified having potential negative environmental impact 65% procurement spend assessed for ESG criteria’s Key targets • 100% of suppliers mapped and risk assessed • 100% of relevant employees trained in human rights Key priorities going forward • Integrate human right policy and management approach • Develop an action plan for each salient human right issue • Increase knowledge and understanding according to the International Bill of Rights • Secure higher enrolment in BEWI Partner 1 BEWI’s procurement spend from suppliers with a purchase volume inferior to EUR 50 000 5656 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report SOCIAL Local communities BEWI can make a difference for people and communities in the locations the company operates by engaging in communities and making a positive impact. Key risks • Bad reputation Key opportunities • Social inclusion • Local job creation 5757 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our efforts BEWI has an important role to play by being a good neighbour and is dependent on maintaining good relationships with local communities. BEWI is committed to providing valuable employment opportunities and by supporting local communities, making a positive impact. Our progress In 2022, 74 per cent of BEWI’s production facilities were involved in different local initiatives and community engagements. In total, BEWI carried out 82 community engagement projects ranging from employment, education, sports, and environmental clean-up initiatives. Employment BEWI shall be a good employer and contribute to employment, integration, and diversity. The company has employment projects focusing on providing opportunities for people who are trying to re-enter the workforce after long-term absence, little work history or disabilities. Education BEWI is committed to actively engage in partnerships to increase the capability for a transition towards a circular economy. Engaging with local schools and universities is an important part of this, by inviting schools and students to visit production facilities, offering internships and to share knowledge. Local sports BEWI sponsors local sports teams, as they are impor- tant arenas for inclusion, diversity, and development of children and young people. Environmental clean-up In 2022, people from BEWI’s production facilities participated in the World Clean-up Day and invited employees, family members, and neighbours to clean their local communities and strengthening relations. Key targets • 100% community engagement Key priorities going forward • Develop a local community stakeholder engagement plan • Improve the company’s local engagement reporting routines and review the report- ing indicators Recycling of working clothes at BEWI RAW Etten-Leur In 2022, the employees at BEWI’s raw mate- rial facility in Etten-Leur got new working clothes. Instead of throwing away the used clothes, they were reused through a col- laboration with Põur, a design and product development brand that RE-harvests raw materials to create new circular products, such as cooling bags. For the working clothes which were more polluted or too worn out BEWI engaged with another company, GAIA, who sort, dismantle, and make new raw materials and products. Through these activities, the company contributed to increasing resource efficiency and circularity. • 90 m 3 water saved • 677 hours of social employment • 659 kg saved raw material • 145 kg reduction in CO 2 emissions The cooperation with GAIA is an ongoing process where workers at BEWI’s facility in Etten-Leur will deliver broken or polluted clothing and shoes to avoid this ending up at landfills or to incineration. 74% of BEWI’s production facilities were involved in different local initiatives 82 community engagement projects 5858 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report In the town of Shashemene in Ethiopia, littering of the environment with plastic and paper waste is a huge and growing problem. In May 2021, BEWI initiated a project together with Norwegian Church Aid, aiming at reducing the littering, but also to create sustainable jobs and increase the knowledge of the population. Through the Value for Waste project, BEWI has aimed to: • Reduce littering • Increase awareness and knowledge of waste as a resource • Create jobs • Collect waste for recycling • Create sustainable income opportunities The project has facilitated business develop- ment with a focus on increasing knowledge about waste management, marketing, finan- cial management and establishing market linkage to secure a circular value chain. Key achievements • A cleaner Shashemene • 30 women employed • 95 tonnes of waste collected for recycling • EUR 20 000 income generation “The project is very much in line with BEWI’s strategy to contribute to the circular economy. It is inspiring to see the results that the pilot project has led to, both for the environment and for women who, through work and cooperation, create a better future for themselves.” Camilla Louise Bjerkli Director of Sustainability in BEWI Read more about Value for Waste 5959 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report High standards for responsible business practices are foundational for services and solutions provided by BEWI to its customers and for the value the company creates for other stakeholders. Material governance topic: Ethical business conduct Governance 6060 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report GOVERNANCE Ethical business conduct With operations across geographies, the risk of unethical business conduct is present. However, BEWI is mainly operating in countries in the Northern and Western part of Europe, with generally healthy business practices. Key risks • Corruption • Competition law breaches Key opportunities • Transparency and accountability • Training and awareness Our efforts BEWI strives to meet the highest ethical standards across its business, contributing to an effective and fair competition. The company has adopted a Code of Conduct, an anti-corruption policy, a gifts and event policy, a privacy policy and a competition law compliance policy, setting out its expectations on how its employees are to be conducting business. The policies guide the company’s work and commit- ment to zero tolerance to bribery and corruption. Corruption and anti-competitive behaviour In 2022, BEWI carried out a saliency mapping of human rights whereas corruption and unethical behaviour in own operations and supply chain came up as a saliency issue. Although zero incidents of corruption are reported the past year, there is always a risk for corruption and unethical behaviour. To increase knowledge and insight, BEWI is in the process of developing an action plan that will guide how the company will manage and monitor the issue going forward. Corruption and ethical behavior are also included in the company’s due diligence process to make sure that the company’s suppliers comply with the company’s policies and requirements. , Increasing awareness and competency To enhance the organisation’s awareness on cor- ruption and ethical business conduct, all relevant employees must complete mandatory online training courses on, among others, anti-corruption, com- petition law and GDPR as part of their onboarding process. In addition, all such employees are asked to re-do the trainings regularly. To ensure continuous attention on suspicions misconduct, BEWI has imple- mented monthly reporting of concerns raised. Whistleblowing BEWI’s whistleblowing channel facilitates the report- ing of serious improprieties concerning potential compliance issues related to laws, regulations, and own policies. The channel is available to all stakehold- ers through internal channels and via the company’s website. The function is operated by an independent third party, notifications may be done anonymously, and all reports are handled with confidentiality. 6161 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Our progress Corruption and business ethics BEWI received two whistleblower reports in 2022. One was deemed to possibly constitute a whis- tle-blowing matter, but due to scarce information and no further information from the whistle-blower after a number of requests, BEWI took the measures appropriate on the basis of the information available. The other case related to human resources and was followed up by personell in the human resource department. Anti-competitive Behaviour BEWI ASA completed its acquisition of the Synbra Group in May 2018. As communicated in BEWI’s annual reports and prospectuses, the European Commission thereafter included Synbra in an investigation related to a potential involvement in anti-competitive practices of styrene monomer purchasing during 2013 and 2014. In November 2022, Synbra concluded a settlement agreement with the Commission entailing a payment of EUR 17.2 million. Key targets • Zero corruption • 100% of relevant employees trained in anti-corruption policy Key priorities going forward • Include corruption in the risk management system, mapping of business ethics risks • Monitoring of business ethics rules (internal compliance controls) • Training and encourage reporting of concerns internally or through whistleblowing channels • Securing and strengthening due diligence processes in acquisitions and supply chain • Adopt a sanction policy 100% of relevant employees trained in anti-corruption 6262 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Corporate governance 6363 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Risks and risk management BEWI ASA is a Norwegian public limited company listed on the Euronext Oslo Børs (Oslo Stock Exchange). The company is subject to the Norwegian Accounting Act, whereas section 3-3 sets out the required content of the company’s annual financial statements, including a description of the company’s major risks and uncertainty factors. The governance of BEWI is based on the company’s articles of association, applicable laws, and regulations as well as internal steering documents. BEWI defines risk as something that could negatively impact its effectiveness and ability to serve customers. Although risks are a natural part of business operations, they can be managed and controlled, and it is the responsibility of group management to ensure that risks are identified and that corrective actions are taken to avoid or mitigate risks that cannot be accepted. BEWI’s overall objective for risk management is to ensure a systematic method for identifying risks and ensuring corrective responses at an early stage. Moreover, the objective is to make risk management a natural part of daily operations by creating a culture of awareness among all employees, and knowledge of how to manage risks to achieve the company’s business objectives. The risks described are relevant for the BEWI group (BEWI or the group), comprising BEWI ASA (the parent company) and all subsidiaries and associated companies. Operational risks Market and forecasts BEWI is exposed to general market risk in its operating markets. However, the company has an integrated and diversified business model, meaning that it is exposed to various market dynamics (upstream vs downstream business), and to customers in different industries and geopraphic regions. The risk of a recession in one or more of BEWI’s end markets is thus balanced by the group’s healthy distribution of customers. Demand for BEWI’s products and solutions has the largest exposure to the building and construction industry, of which approximately 60 per cent of the group’s sales are directed. Further, the group is exposed to the market conditions for food packaging, in particular seafood, technical components, especially heating, ventilation and air condition (HVAC) components, and components to the automotive industry. BEWI has a detailed forecasting process, enabling the group to con- tinuously adapt and adjust its capacity to the demand in each of its markets, securing profitable and competitive operations. This is done by monitoring market trends and cultivating close rela- tionships with customers to increase knowledge of their forecasts and expectations. BEWI also obtains information on changes in the market through relevant memberships in European industry organizations. 6464 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Customers and competition BEWI’s operations are conducted in competitive industries. By using product development, improved production methods and accessibility as well as offering competitive prices, BEWI can get cus- tomers to choose its products over its competitors. BEWI’s integrated business model is expected to bring further synergies within R&D, product expertise and customer relations in each segment. BEWI’s customer relations are characterised by a long-term perspective in which shared development work for customized design, adaptation to customers’ production processes and a functional storage and logistics flow are in focus. BEWI conducts work that will create and add value through the development of new materials, applications, and design, targeting a continuously relevant and sustainable product portfolio which is a business advantage. Focusing on all cost aspects in the production and distribution chain, BEWI strives to be the most cost-effective collaborating partner for its customers. BEWI invests in, and continuously reviews its internal pro- cesses to be as cost-effective as possible at all stages. Geographical proximity to customers yields better accessibility and lower distribution costs. Raw material prices and purchasing Styrene is a crucial raw material to BEWI. Volatility in styrene prices and supply disturbances are risk factors. Supply and demand govern prices on the world market. Raw material is traded on the global market, and price changes will in most cases also affect BEWI’s competitors so that desirable margins (GAP) can be maintained. To fend off price volatility, BEWI works with several suppliers, contract models, purchasing strategies and individually tailored customer agree- ments throughout the value chain. To mitigate the risk of supply disturbances a multi supplier strategy is crucial, but also the possibility to utilize the groups three raw material facilities. Production capacity Breakdowns or losses in production entail a risk of being unable to deliver. BEWI balances the risk of not being able to continue delivery in the event of breakdowns in production through redundancy and the possibility of increased capacity in its facilities. Recent acquisitions has further increased the group’s capacity and redundancy in production in order to ensure continuous supply to internal and external cus- tomers. The group also collaborates closely with other suppliers on purchasing goods or to let out production capacity if needed. For strategic products and customers, special risk manuals and routines for managing production efforts have been developed. In addition, BEWI has insurance in place that will help the company recover and minimize business interruption. 6565 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Production quality Delivering faulty quality can cause negative repercussions for customers or damage BEWI’s reputation. The risk of delivering faulty quality over time – or to specific projects – that causes negative repercussions for customers, fines, or damage to BEWI’s reputation is managed through working with ISO 9001 & 14001, which helps ensure continuity in processes, quality checks and a lean production philosophy. There is also an integrated monitoring system, in the event of devia- tions, that identifies causes and preventive measures. Research & Development (R&D) BEWI’s customers are constantly in search for new and improved prod- ucts, including more environmentally friendly solutions. Further, new legislation and requirements from authorities drives the development of more resource efficient solutions. To meet customers’ expectations and future legal requirements, BEWI works to have a relevant and innovative product portfolio. The portfo- lio is diversified and not dependant on a single product group. BEWI closely monitors the development with regards to new standards, patents and legislation both on national and European level. Efficient product and process development will help BEWI react proactively to possible changes in regulations. BEWI is a member of both local and European industry organizations for advice concerning materials and legal requirements. Information and IT systems BEWI relies on IT systems for its oper- ations. Disruptions or faults in critical systems might have a direct impact on production and other important business processes. Errors in financial systems could affect the group’s reporting of financial results. BEWI’s management model for IT relies on standardized IT processes, security and governance. Continuous work is performed to move away from traditional and customized on-premises solutions to modern standardized and unified solutions to reduce risk. Acquisitions and integration Integration of newly acquired businesses entails a stress on existing operations. Rapid growth through business acquisitions can entail a risk that the integration processes become more costly or take longer than estimated, and that expected synergies either wholly or in part do not occur. Rapid growth can also be a stress on existing operations, in which relationships with customers, suppliers and key persons are negatively affected. BEWI has a strong track record for successful acquisitions and integra- tion of companies. The company has acquired and integrated more than 30 companies since 2014, and has established a well functioning integration model with clear division of responsibilities and use of dedicated project groups. The process includes external legal and financial due dilligence processes and where needed there will also be a business and technical due dilligence process. 6666 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Legal risks Legislation Legal risks comprise a number of risks in various areas, e.g. changes to regulations, violations of law in the operations, compliance risk and errors in any agreements signed by BEWI. BEWI takes preventive measures through its governance structures and continuously observes rules and regulations in each of its markets. BEWI works to prepare its products and operations to future changes by monitoring legal risks that may arise, often in cooperation with external advisers when deemed necessary. Sustainability-related risks Environment There is a risk that BEWI’s operations can have a negative environmental impact on the air, soil, or water. To ensure the compliance of various laws and regulations from gov- ernment authorities as well as the group itself, all production facilities conduct a risk assessment to identify the risk of unforeseen, undesirable events or accidents that can have a consequence for the external environment. All production facilities systematically work to reduce these risks, including implementation of several processes to identify, monitor, measure, analyze and register environmental risks to the environment. The results of these activities are the basis for the work to address and evaluate possible mitigation measures to improve routines and reduce the group’s environmental impact. Read more about the company’s environmental risks in the chapter about biodiversity and ecosystems in the ESG section. Climate Climate change represents both financial risks and opportunities to BEWI. Read more about the com- pany’s climate related risks in the chapter about climate mitigation and climate adaptation in the ESG section. To mitigate impacts of climate change, it is important for the company to understand the risks (physically and transitional) and opportunities presented by rising temperatures, climate-related policies, and emerg- ing technologies. Climate related risks and opportunities are directly linked to BEWI’s strategy and are addressed as an integrated part of the company’s daily business. The risks are reported as recommended by the Task force on Climate-related Financial Disclosures (TCFD). 6767 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Health and safety There is a risk for accidents and injuries in BEWI’s operation. As an employer BEWI conducts risk assessments of the conditions that may involve a risk of the health to employees, and implement measures to remove or reduce risk factors as far as possible. BEWI has a zero toler- ance vision when it comes to health and safety. BEWI works preventively and systematically to prevent health sickness, injuries and near misses, and are continuously working to follow-up performance through regular measurements and evaluations. All deviations, incidents and near-misses are reported and are the basis for continuous improvements. Risk assess- ments are used to identify hazards requiring a special attention. BEWI actively works to find green substitutes and to consider whether processes and resources can be changed to improve the group’s HSE profile. Moreover, BEWI offers training with active participation of employees to establish good routines to prevent employee incidents at work. Employees are familiar with the requirements and have been introduced to BEWI’s HSE policies and shall comply with internal safety rules and instructions. Employees Attracting skilled personnel and retaining key individuals is of crucial importance to BEWI’s success. BEWI manages the risk of being unable to recruit qualified labour by striving for a good work environment and internal competence devel- opment, as well as taking responsibility for training new employees. In addition, the group works actively to promote the group as an attrac- tive employer. BEWI has a group staff function for human resources (HR), including an HR Director responsible for group culture, values and processes to secure management development and succession planning. Human rights There is a risk of discrimination of human rights and that labor legis- lation is not fully complied with. In BEWI’s case, the risk of human rights violations is greatest in the supply chain. BEWI conduct human rights due diligence through the supplier management system called BEWI partner. The management system is guided by international standards including OECD Due Diligence Guidance for Responsible Business Conduct and the UN Guiding Principles on Human Rights and industry practice. BEWI regularly assess ESG risks within its supply chain and seek to mitigate these risks through the supplier development programme, transparent and fair tender processes, robust contracting, and pre-production audits. In addition, risk assessment is done annually to identify and follow-up high risk suppliers. Unethical behavior There is a risk that employees are involved in unethical behavior such as bribes, corruption, or fraud. BEWI’s Code of Conduct sets out the essential requirements for ethical business conduct within the group and it is fundamental to BEWI to contribute to effective and fair competition in the society. BEWI’s anti-corruption policy describes a zero tolerance to bribery and corrup- tion and BEWI’s whistleblowing system enables internal and external stakeholders to report suspicions of misconduct. A gift and event policy and a competition law compliance policy have been adopted to provide all employees of BEWI with further informa- tion on how to act in order to be in compliance with BEWI’s values and policies as well as laws and regulations. To enhance the organisations awareness of ethical conduct, general managers, sales and marketing employees, group functons and selected employee groups are trained on anti-corruption and the group’s gift and event policy. 6868 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Board of directors Gunnar Syvertsen Kristina Schauman Andreas M. Akselsen Position Chair of the board Director Director Born 1954 1965 1977 Nationality Norwegian Swedish Norwegian Elected 2014 2016 2022 Education M.Sc. Engineering M.Sc. Business Administration, Stockholm School of Economics. M. Sc. Business Administration from BI Norwegian School of Management, and a Bachelor of Sc. in mechanical engineering. Professional background CEO Heidelberg Cement Northern Europe AB, Managing Director Heidelberg Cement Norway AS, Managing Director Norcem AS, and other executive positions in Heidelberg Cement AG in Africa and the US. CFO of OMX AB, Carnegie Investment Bank and Apoteket AB. Senior posi- tions at Investor AB, ABB, and Stora Enso. Experience from various positions in Jackon Holding from 2004, including M&A, strategy and business development, restructuring and financing. From 2018, Akselsen worked as a consultant for Jackon, in addition to other assignments within real estate, early phase investment and restructuring projects. Other selected directorships Chair of the board of BEWI Invest AS, (majority shareholder of BEWI) and various other directorships in BEWI Invest portfolio companies. Board member of Viaplay Group AB, AFRY AB, Coor Service Management Holding AB and Ellos Group Holding AB, Member of NASDAQ Stockholm’s Disciplinary Committee. Board member of HAAS (second largest shareholder of BEWI), Pridok AS, Bricks Beverages AS, Flexiform AS and Godthåb Holding AS. Independence Independent of material business contacts. Not considered independent of the management or large shareholders, due to a consultancy agreement with the company and directorship with the majority shareholder BEWI Invest. Independent of executive management, material business contacts and large shareholders. Independent of material business contacts. Not considered independent of the management or large shareholders, due to a consultancy agreement with the company and being the owner of the second largest shareholder HAAS. Shares per 31.12.22 161681 1 193452 32 070 000 2 1 Gunnar is the chairman of BEWI Invest AS, an investment company controlled by the Bekken family, owning 97 958 328 on 31 December 2022 2 Shares are held through the investment company HAAS AS, owned by the Akselsen family 6969 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Anne-Lise Aukner Rik Dobbelaere Position Director Director Born 1956 1954 Nationality Norwegian Belgian Elected 2020 2021 Education Law degree from the University of Oslo. M.Sc. Engineering and MBA from Catholic University in Leuven, Belgium. Professional background Managing director and CEO of Nexans Norway and CEO of Nexans Sweden. Long experience in management of technology and knowledge-based companies and management of industrial companies. CEO of BEWI ASA from 2018 to 2020, and CEO of Synbra Holding B.V. prior to the merger with BEWI. Senior positions in global industry companies, including Bombardier, and Raychem Corporation. Other selected directorships Chair of the board in Fontenehuset Ullensaker and Fontenehuset Mortensrud, and board member of Aukner Holding AS. Board member of selected subsidiaries of the BEWI group. Independence Independent of executive management, material business contacts and large shareholders. Independent of material business contacts and large shareholders. Not considered independent of the management, due to a consultancy agreement with the company. Shares per 31.12.22 - 98 497 7070 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Executive management Christian Bekken Marie Danielsson Jonas Siljeskär Petra Brantmark Roger Olofsson Charlotte Knudsen Position Chief Executive Officer (CEO) Chief Financial Officer (CFO) Chief Operations Officer (COO) Chief Legal Officer (CLO) Chief Human Resources Officer (CHRO) Chief Communications and IR Officer (CCO) Born 1982 1975 1972 1981 1964 1973 Nationality Norwegian Swedish Swedish Swedish Swedish Norwegian Employed 2022 2015 2010 2020 2019 2020 Education Upper secondary general, financial, and administrative programmes. M.Sc. Economics, Stockholm University, Sweden Degree in Engineering, Dalarna University, Sweden Master of Laws, Uppsala University Sweden B.Sc. human resource development and labor relations, Umeå University, Sweden. M.Sc. Economics and Business admin- istration (“Siviløkonom”), Norwegian School of Economics (NHH), Norway Professional background and relevant directorships Various positions with production and sales at BEWI, CEO Smart Bolig. Majority shareholder and director of the board at BEWI Invest, majority shareholder of BEWI ASA. Auditor KPMG, Vice President Financial Control and Taxes, Haldex AB. Director of the board at BEWI Invest, majority shareholder of BEWI ASA. Managing Director of BEWI RAW and Chief Operating Officer of Gustafs Inredninga. Senior Legal Counsel at Swedfund International AB and as Associate at Linklaters Law Firm. SVP Human Resources at Scandic Hotels, senior HR roles at ABB, GE Healthcare and Loomis. Senior advisor at First House and Crux Advisors, Director of IR and Communications at IDEX Biometrics ASA and EMGS ASA Shares per 31.12.22 25 952 1 185 452 124 126 8 902 2 5 952 33 681 Options per 31.12.22 200 000 250 000 200 000 100 000 125 000 100 000 1 Christian Bekken is a member of the Bekken family, who controls BEWI Invest, the majority shareholder of BEWI ASA, owning 97 958 328 on 31 December 2022 2 Related parties of Petra Brantmark held a total of 5 458 shares on 31 December 2022 7171 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Corporate governance in BEWI ASA BEWI aims to maintain a high standard of corporate governance. Good corporate governance strengthens the confidence in the company and contributes to long- term value creation by regulating the division of roles and responsibilities between shareholders, the board of directors and executive management. Corporate governance at BEWI shall be based on the following main principles: • All shareholders shall be treated equally • BEWI shall maintain open, honest, relevant, and reliable communication with its stakeholders about the company’s activities • BEWI’s board of directors shall be autonomous and independent of the company’s management • BEWI shall have a clear division of roles and respon- sibilities between shareholders, the board and management 1. Implementation and reporting on corporate governance Compliance and regulations The board of directors (the board) of BEWI ASA (the company) has the overall responsibility for ensuring that the company has a high standard of corporate governance. The board has adopted corporate governance principles for the company, latest adopted on 2 June 2022. In addition, the board has adopted several other policy documents related to corporate governance, including, but not limited to a policy on handling of inside information and other disclosure obligations, and an information policy. The company’s corporate governance principles are based on the Norwegian Code of Practice (the Code) for Corporate Governance issued by the Norwegian Corporate Governance Board (NCGB). The objective of the Code is that companies listed on regulated markets in Norway will practice corporate govern- ance that regulates the division of roles between shareholders, the board and executive management more comprehensively than is required by legislation. The board and executive management perform an annual assessment of its principles for corporate governance. BEWI ASA is a Norwegian public limited liability company listed on the Oslo Børs (Oslo Stock Exchange). The company is subject to section 3-3b of the Norwegian Accounting Act, which requires the company to disclose certain corporate governance related information annually. In addition, the Issuers Rules of Oslo Børs, covered by the Oslo Rulebook II chapter 4.5 requires listed companies to publish an annual statement of its principles and practices with respect to corporate governance, covering every section of the Code. Oslo Børs also sets out an overview of information required to be included in the statement. The Norwegian Accounting Act is available at www.lovdata.no (in Norwegian), while the Issuers Rules is available at www.oslobors.no. BEWI always seeks to comply with the latest version of the Code. The current Code was adopted on 14 October 2021 and is available at www.nues.no/ english. Application of the Code is based on the ‘comply or explain’ principle, which means that the company must provide an explanation if it has chosen an alternative approach to specific recom- mendations. BEWI provides an annual statement of its adherence to corporate governance. Deviations from the Code: None 7272 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Governance structure Chief executive officer (CEO) Board of directorsAudit committee Remuneration committee General meeting Nomination committee Chief financial officer (CFO) RAW Chief legal officer (CLO) Circular Chief operating officer (COO) Insulation & Construction Chief communications officer and IR (CCO) Chief human resources officer (CHRO) Packaging & Components Executive management Segments Shareholders Group functions IT LegalSustainability Finance R&DProcurement CommunicationsHuman resources M&A Risk management 7373 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report 2. Business activity BEWI is a provider of packaging, components, and insulation solutions. The operations of BEWI shall comply with the busi- ness objective set forth in the company’s articles of association. The company’s business objective is set out in its Articles of Association section 3 as: “The company’s objective is to directly or indirectly conduct production, marketing and sales of customer tailor made packaging solutions and insulation materials and to conduct other business compatible therewith and to conduct services within the company group mainly within administration and finance.” The board has defined clear objectives and strategic priorities for the company, including both long-term financial targets and sustainability targets, to ensure value creation for the shareholders and other stake- holders. The objectives are evaluated annually. In March 2021, BEWI launched a sustainability strategy, including clearly defined ambitions for the group leading towards 2030. The board has adopted a Code of Conduct for the company, a key governing document setting out important principles for the company’s ethical conduct of its business. The principles are used to integrate considerations to human rights, employee rights and social matters, the external environment and anti-corruption efforts. Further, the group has established separate policies on anti-corruption, compliance with competition law, privacy, and whistleblowing guidelines. Vision, mission, and core values BEWI’s vision is “Protecting people and goods for a better everyday.” The group’s mission is “To create value for customers by offering sustainable packaging, components and insulation solutions in innovative and efficient ways, and lead the change towards a circular economy.” In addition to the Code of Conduct setting out key principles for ethical business conduct, BEWI’s core values are guiding stones: • Responsible • Proud • Stable • Care for quality Deviations from the Code: None 3. Equity and dividends Capital structure The board is committed to maintain a satisfactory capital structure for the company according to the company’s goals, strategy and risk profile, thereby ensuring that there is an appropriate balance between equity and other sources of financing. The board will continuously assess the company’s capital require- ments related to the company’s strategy and risk profile. BEWI’s financial targets were launched in September 2021: • The double adjusted EBITDA by 2026 • Leverage of NIBD/ Adjusted EBITDA below 2.5x (LTM excl. IFRS 16) • Dividend pay-out policy of 30-50 per cent of net profit • Increase Return on Capital Employed (ROCE) towards 20 per cent by 2026 Dividends The board of BEWI has established a dividend policy where the long-term policy is to pay out between 30 and 50 per cent of the company’s underlying net profit after tax as dividends. When deciding on the annual dividend, the board will consider the compa- ny’s financial position, investment plans as well as the needed financial flexibility for strategic growth. For the financial year of 2021, BEWI distributed dividends of NOK 1.10 per share. The dividends were distributed in November 2022, following completion of the Jackon acquisition. For the financial year of 2022, the board has proposed to the general meeting to pay dividends of NOK 0.60 per share. The dividends are proposed to be dis- tributed following sale of the company’s real estate portfolio. Board authorisations Authorisations to the board to increase the share capital or to buy own shares will normally not be given for periods longer than until the next annual general meeting (AGM) of the company. As of 31 December 2022, the board of BEWI had three authorisations: 1. Authorisation to increase the share capital by up to NOK 31 407 960 to strengthen the equity of the company, finance future growth, acquisitions, increase the liquidity and spread of ownership in respect of the company’s shares or for other pur- poses as the board decides. 2. Authorisation to increase the share capital by up to NOK 4 711 194 in connection with the company’s incentive programmes. 3. Authorisation to acquire own shares up to a nominal value of 15 703 980 (equal to 10 per cent of the company’s share capital at the time of the authorisation). The shares shall either be cancelled, included in the company’s incentive programme, be used for investment or as settlement in acquisitions. 7474 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Authorisations no. 1 and 3 are valid until the annual general meeting in 2023, planned to be held on 1 June 2023, however expiring on 30 June 2023 at the latest. Authorisation no. 2 is valid until the annual general meeting in 2024, however expiring on 30 June 2024 at the latest. Deviations from the Code: The Code states that man- dates granted to the board to increase the share capital should be limited in time to no later than the date of the next annual general meeting, and thus the mandate to increase the share capital in connection with the compa- ny’s incentive programme is a deviation from the Code, explained by the duration of the company’s incentive programme, however limited by legal restrictions. 4. Equal treatment of shareholders and transactions with close associates In the event of capital increases based on author- isations issued by the general meeting, where the existing shareholders’ rights will be waived, the reason for this will be provided in a public announce- ment in connection with the capital increase. Any transactions, agreements or arrangements between the company and its shareholders, members of the board, members of the executive management team or close associates of any such parties will be conducted in compliance with the procedures set out in the Norwegian Public Limited Liability Companies Act. The board shall arrange for a valuation to be obtained from an independent third party unless the transaction, agreement or arrange- ment in question is considered immaterial. Board members and members of the executive manage- ment team shall immediately notify the board if they have any material direct or indirect interest in any transaction entered by the company. Trading own shares Any transaction which the company carries out in its own shares will be carried out through the stock exchange, and at prevailing stock exchange prices. If there is limited liquidity in the company’s shares, BEWI will consider other ways to ensure equal treat- ment of its shareholders. Deviations from the Code: None 5. Shares and negotiability BEWI has only one class of shares and all shares have equal rights. Each share has a face value of NOK 1.00 and carries one vote. The company emphasise equal treatment of its shareholders and the shares are freely transferable. 6. General meetings BEWI’s highest decision-making body is the general meeting of shareholders. All shareholders have the right to participate in the general meetings of the company. Article 7 of the company’s articles of associations sets out the main principles of the company’s general meeting, including where the meetings should be held and matters to be dealt with. The article also sets out that documents relating to matters to be dealt with, including documents which by law shall be included in or attached to the notice of the general meeting, do not need to be sent to the shareholders if such documents have been made available on the company’s website. A shareholder may nevertheless request that documents relating to matters to be dealt with at the general meeting, is sent to him or her. Shareholders who wish to participate in a general meeting, shall notify the company of this within a deadline which is set out in the notice of the general meeting, and which cannot expire earlier than three days prior to the meeting. The shareholders may cast their votes in writing, includ- ing through electronic communication, in a period prior to the general meeting. The right to participate and vote at the general meeting may only be exercised if the acquisition is entered in the VPS on or before the fifth business day before the general meeting. The full notice for general meetings shall be sent to the shareholders no later than 21 days prior to the meeting. The board will ensure that the notice includes informa- tion about resolutions and that supporting information is sufficiently detailed to allow shareholders to form a view on all matters to be considered at the meeting. Notices shall provide information on procedures that shareholders shall observe to participate in and vote at the general meeting. The notice should also set out: (i) the procedure for representation at the meeting through a proxy, including a form to appoint a proxy, and (ii) the right for shareholders to propose resolutions in respect of matters to be dealt with by the general meeting. The form for the appointment of a proxy should also be designed to make voting on each indi- vidual matter possible. The annual general meeting (AGM) is held each year no later than six months after expiry of the preceding financial year. The board and the company’s auditor shall be present at the AGM. General meetings are opened by the chair of the board, or the person appointed by the board. The board proposes a person to chair the meeting. In 2022, an extraordinary general meeting was held on 16 February 2022 and the AGM was held on 2 June 2022. In 2023, the AGM is scheduled to be held on 1 June 2023. Deviations from the Code: None 7575 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report 7. Nomination committee Article 8 of the company’s articles of association stipulates that the company shall have a nomination committee, consisting of two to four members, where the majority of the members shall be independent of the board and management. The members of the nomination committee, including the chairperson, will be elected by the general meeting for a term of two years unless the general meeting decides otherwise in connection with the election. The nomination committee gives recommenda- tions to the general meeting for the election of shareholder elected members to the board and the chairperson of the board, as well as to members of the nomination committee. The nomination commit- tee also presents to the general meeting proposals for remuneration to the board and to the nomination committee. When proposing candidates for election to the board, the committee should consider that the board should be composed in such a way as to maintain the interests of the shareholders and the company’s need for competence and diversity, and that the board should function well as a collegiate body. Also, the committee should consider that the directors of the board should be independent of the executive management and significant business partners, and that at least two of the directors should be independ- ent of the company’s principal shareholder. On 16 February 2022, BEWI held an extraordinary general meeting which resolved the committee’s composition to be amended so that the chair of the board of directors, Gunnar Syvertsen, no longer was a member of the nomination committee to secure independence and impartiality of the board. At the meeting, Liv Malvik was re-elected as chair and Roar Husby was re-elected as member of the committee for the period until the annual general meeting of 2024. Instructions for the nomination committee was adopted by the extraordinary general meeting of the company held on 21 August 2020. Deviations from the Code: None 8. Board of directors: composition and independence Composition of the board According to article 5 of BEWI’s articles of asso- ciations, the board of directors shall consist of a minimum of three and a maximum of eight board members elected by the general meeting for a period of two years, unless otherwise decided by the general meeting in connection with the election. The general meeting elects the chair of the board. The Public Limited Companies Act states that when the board has between four and five members, both sexes should be represented by at least two members. As of 31 December 2022, the board of BEWI ASA consisted of five members, whereof two are female. In appointing members to the board, it is emphasised that the board shall have the requisite competency to independently evaluate the cases presented by the executive management team as well as the compa- ny’s operations. It is also considered important that the board can function well as a body of colleagues. Board members shall be elected for periods not exceeding two years at a time, with the possibility of re-election. Board members shall be encouraged to own shares in the company. An overview of the board members competence, background and which of the board members are considered independent, is included in a separate section of this annual report and is also available from the company’s website www.bewi.com. Four out of five board members own shares in the company. Independence of the board BEWI’s board should be composed such that it is able to act in the interests of all shareholders and act independently of any special interests. All the board members of BEWI are deemed to be independent of the company’s material business partners, and three of the members are independent of the company’s major shareholders. Two of the board members are independent of the company’s senior executives. Deviations from the Code: The Code states that the majority of the board members should be independent of the executive personnel. In BEWI, two out of five board members are considered independent, while three of the members are not considered independent due to their advisory agreements with the company. This includes the chair of the board, and board members Andreas M. Akselsen and Rik Dobbelaere. The company has chosen to enter such agreements to secure the integration of the company’s two most transformative acquisitions, namely Jackon (2022) and Synbra Holding (2018). 9. The work of the board of directors The board shall ensure that the company has proper management with clear internal distribution of responsibilities and duties. A clear division of work has been established between the board and the executive management team. The CEO is responsible for the executive management of the company. Instructions to the board of directors and the CEO were last revised and approved by the board on 2 June 2022. 7676 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report The board has the overall responsibility for the management of the group and the supervision of its day-to-day management and business activities. The board shall prepare an annual plan for its work with special emphasis on goals, strategy, and imple- mentation. The board’s primary responsibility shall be (i) participating in the development and approval of the company’s strategy, (ii) performing necessary monitoring functions and (iii) acting as an advisory body for the executive management team. The chairperson of the board is responsible for ensuring that the board’s work is performed in an effective and correct manner. The members of the board receive information about the company’s operational and financial development monthly. The company’s strategies shall regularly, and at least once a year, be subject to review and evaluation by the board. The regulations governing the board’s working practices include guidelines for how individual directors and the CEO should conduct themselves with respect to matters in which they may have a personal interest. Among them is the stipulation that each director must make a conscious assessment of his/her own impartiality and inform the board of any possible conflict of interest. Further, the regulations include guidelines for how the board of directors and executive management shall deal with approval of agreements, which are considered material, between the company and its shareholders and other close associates, including that the board shall arrange for an independent third-party valuation. This will, however, not apply for transactions that are subject to the approval of the general meeting pursuant to the Norwegian Companies Act. Independent valua- tions shall also be procured for transactions between companies within the group if any of the companies involved have minority shareholders. Agreements with related parties will be included in the notes to the financial statements in the annual reports. The board meets as often as necessary to perform its duties. The board shall prepare an annual evaluation of its work. Sub-committees of the board Audit committee Pursuant to the Norwegian Public Limited Liability Companies Act and the listing rules of the Oslo Stock Exchange, the company shall have an audit commit- tee. The audit committee shall consist of at least two members. At least one member must have account- ing or auditing proficiency and at least one member must be independent of the company’s business. The audit committee is appointed by the board. The committee’s main task is to assist the board with addressing and preparing issues concerning, amongst other, procurement of audit services, mon- itoring the work of the auditors and the company’s internal control systems, monitoring the risk man- agement of the company and the financial and sustainability reporting and any other issues that the board may assign to the committee. The board revised and approved instructions to the audit committee on 2 June 2022. As of 31 December 2022, the audit committee in BEWI consisted of only Kristina Schauman, as the other member of the committee, Stig Wærnes, was replaced by Andreas M. Akselsen as board member upon completion of the acquisition of Jackon (October 2022). At a board meeting on 13 April 2022, Gunnar Syvertsen was appointed as member of the audit committee. Remuneration committee The company shall have a remuneration committee appointed by the board. The remuneration commit- tee shall evaluate and propose the compensation of BEWI’s CEO and other members of the executive management team and provide general compensa- tion related advice to the board. The board of directors of BEWI appointed a remu- neration committee and adopted instructions to the committee on 2 June 2022. The remuneration committee consists of Anne-Lise Aukner as chair and Gunnar Syvertsen as member. Deviations from the Code: None 10. Risk management and internal control The board of directors is responsible for ensuring that BEWI has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. The internal control and the systems shall also encompass the company’s corporate values and ethical guidelines. The board shall annually review the company’s most important areas of risk exposure and the internal control arrangement in place for such areas. The review shall pay attention to any material shortcom- ings or weaknesses in the company’s internal control and how risks are being managed. The annual review is normally carried out in relation to the board’s approval of the annual report, includ- ing the financial statements and board of director’s report, where the risks are further described. Different methods are used for evaluating risks and for ensuring that the relevant risks to which BEWI is exposed are managed in accordance with established policies and guidelines. Risks and risk management are described in a separate section of BEWI’s annual report. Internal control of financial reporting is achieved through day-to-day follow-up by management, and supervision by the company’s audit committee. 7777 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report The objective of the risk management and internal control is to manage exposure to risks, to ensure successful conduct of the company’s business and to support the quality of its financial reporting. The board has approved routines for internal control and risk management. In 2022, BEWI employed a risk manager dedicated to improving the company’s system for risk manage- ment. Deviations from the Code: None 11. Board remuneration The general meeting shall determine the board’s remuneration. The remuneration to the board members shall not be performance-related nor include share option elements. The board’s remuneration was approved on the company’s annual general meeting on 2 June 2022, following a proposal from the nomination committee. The committee emphasized that the remuneration shall be reasonable and based on the board’s responsibilities and need for competence, but also be sober. The board shall be informed if individual board members perform tasks for the company other than exercising their role as board members. Work in sub committees, such as the audit committee and the remuneration committee, is com- pensated in addition to the remuneration received for board membership. As of 31 December 2022, three of the board members had agreements to perform advisory work for the company in addition to their assignment as board members. Deviations from the Code: None 12. Remuneration of executive management Pursuant to Section 6-16a of the Norwegian Public Limited Companies Act (NPLCA), the board prepares guidelines for determination of salaries and other benefits payable to senior executives. The guidelines will, in line with the said statutory provision, as well as Section 5-6 (3) of the same Act be approved by the general meeting. If the guidelines are materially altered, the guidelines will be laid before, and approved by the general meeting. The guidelines will be approved by the general meeting at least every four years. In addition to the guidelines, the board prepares a remuneration report pursuant to Section 6-16b of NPLCA. Such report will be considered by the company’s general meeting and shall be subject to an advisory vote by the general meeting in accord- ance with NPLCA Section 5-6 (4). The guidelines and remuneration report are published as a separate document on the same day as the company’s annual report is published, and is available at the company’s website. The company’s senior executive remuneration policy is based primarily on the principle that executive pay should be competitive and motivating, to attract and retain key personnel with the necessary competence. The statement refers to the fact that the board of directors shall determine the salary and other benefits payable to the CEO. The salary and benefits payable to other senior executives are determined by the CEO in accordance with the guidelines. The CEO will normally propose the remuneration to senior executives in consultation with members of the remuneration committee. Deviations from the Code: None 13. Information and communication Investor relations Communication with shareholders, investors and analysts is a high priority for BEWI. The objective is to ensure that the financial markets and sharehold- ers receive correct and timely information, thus providing a sound foundation for a valuation of the company. All market players shall have access to the same information, and all information is published in English. All notices sent to the stock exchange are made available on the company’s website and at www.newsweb.no. BEWI’s ambition is to comply with the latest version of the Oslo Børs Code of Practice for IR (“the IR Code”), including recommendations on the report- ing of information to investors on the company’s websites. The board of BEWI has adopted a policy on handling of inside information and other disclosure obligations, as well as an information policy. Included in the policies are, among others, guidelines on trading in the share by key employees, including clearance prior to trading and restricted trading periods, and division of roles and responsibilities. The CEO, CFO and Director of IR and Communications are responsible for communications with shareholders in the period between general meetings. 7878 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Financial information The company holds investor presentations in asso- ciation with the publication of its quarterly results. These presentations are open to all and provide an overview of the group’s operational and financial performance in the previous quarter, as well as an overview of the general market outlook. These presentations are also made available on the compa- ny’s website. Quiet period BEWI maintains a silent period of 30 days prior to the day of the company’s publication of interim reports. During this period, representatives of the company will minimize its contact with financial media, ana- lysts, and investors and not comment on any financial development. Restricted trading periods Persons defined as primary insiders of BEWI, as well as related parties of the primary insiders, are not allowed to acquire or sell shares in the company or related financial instruments during the period of 30 days prior to the company’s publication of the report for the fourth quarter, including preliminary full year results, and the report for the first half year. BEWI publishes a financial calendar on Oslo Børs’s website, setting out the expected dates of publication for its reports. The dates are also available at the company’s website. During other periods trading is allowed provided that it is made in accordance with laws and regulations as well as other provisions in BEWI’s policies. Deviations from the Code: None 14. Take-over situations In a take-over process, should it occur, the board and the executive management team each have an individual responsibility to ensure that the company’s shareholders are treated equally and that there are no unnecessary interruptions to the company’s business activities. The board has a particular responsibility in ensuring that the shareholders have sufficient infor- mation and time to assess the offer. In the event of a take-over process, the board shall ensure that: • the board will not seek to hinder or obstruct any takeover bid for the company’s operations or shares unless there are particular reasons for doing so; • the board shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the company; • the board shall not institute measures with the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and • the board shall be aware of the particular duty it has for ensuring that the values and interests of the shareholders are protected. In the event of a take-over bid, the board will, in addition to complying with relevant legislation and regulations, seek to comply with the recommen- dations in the Code. This could include obtaining a valuation and fairness opinion from an independent expert. On this basis, the board shall draw up a statement containing a well-grounded evaluation of the bid and make a recommendation as to whether or not the shareholders should accept the bid. The evaluation shall specify how, for example, a take-over would affect long-term value creation of BEWI. Deviations from the Code: None 15. Auditor The auditor is appointed by the annual general meeting and is independent of BEWI ASA. Each year the board shall receive written confirmation from the auditor that the requirements with respect to inde- pendence and objectivity have been met. Each year, the auditor shall draw up a plan for the execution of their auditing activities, and the plan shall be made known to the board of directors and the audit committee. The board should specifically consider if the auditor to a satisfactory degree also carries out a control function and the auditor shall meet with the audit committee annually to review and evaluate the company’s internal control activities. The auditor shall meet with the board without the CEO or any other member of the senior management present at least once a year. Whenever necessary, the board shall meet with the auditor to review the auditor’s view on the company’s accounting princi- ples, risk areas, internal control routines, etc. The auditor may only be used as a financial advisor to the company provided that such use of the auditor does not have the ability to affect or question the auditors’ independence and objectiveness as auditor for the company. The audit committee shall approve any agreements in respect of such counselling assign- ments in accordance with BEWI’s internal policies. At the annual general meeting the board shall present a review of the auditor’s compensation as paid for auditory work required by law and remunera- tion associated with other specific assignments. The auditor for BEWI ASA is PWC. Deviations from the Code: None 7979 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Statement on remuneration of executive management 1. Overview This statement on executive remuneration is pre- pared by the board of directors (“the board”) of BEWI ASA (the “company”) in accordance with Section 6-16a of the Norwegian Public Limited Liabilities Companies Act as applicable per 1 January 2021 (“NPLCA”) and the administrative regulation regarding policy and report for the remuneration of the execu- tive management. The board of the company does not have members elected by and among the employees of the company or of the group. The total remuneration for the CEO and the other executives consists of annual base salary, variable pay, options awarded under a share option plan and other benefits, including pension. 2. Remuneration policy for the executive management 2.1 General remarks The remuneration is an important instrument for harmonizing the company’s interests with the interests of the executive management. The general meeting shall therefore approve the guidelines, and the guidelines shall be made available at the compa- ny’s website. The purpose of the company’s remuneration policy for the executive management is to contribute to the company’s business strategy, long-term interests, and sustainability of the company. Further, BEWI’s remuneration policy shall encourage a strong and sustainable performance-based culture, growth, shareholder value over time and responsible business practices aligned with the company’s values. The total remuneration level shall be in line with the relevant market level for peers within the industry, but not market leading. 2.2 Annual base salary The executives are compensated based on individual criteria, including each executive’s role, experience, and competence. All executives are evaluated yearly as part of the company’s Performance and Development Dialogue (PDD). The total compen- sation level targets at attracting and retaining executives, and to maintain a compensation level which for each individual is competitive compared to market conditions for the relevant position and individual. BEWI applies standard employment contracts and standard terms and conditions regarding notice period and severance pay, which shall be deductible to other income. Internal board assignments and similar internal positions are not remunerated separately. External assignments shall be approved by the CEO or by the board. 2.3 Pension scheme Executives are members of the standard pension and insurance schemes on the same terms and conditions as non-executives in the county of employment. Executives are not entitled to early retirement. 2.4 Pay after termination of employment The CEO and the COO is entitled to 12- and 6-months’ severance pay respectively. Other exec- utives are not entitled to pay after termination of employment. 2.5 Other types of remuneration Executives may receive benefits in line with relevant market practice, such as free phone, PC, broadband, newspapers, and parking. 2.6 Variable pay BEWI has a variable incentive pay programme includ- ing the executive management team, as well as other key executives. The objective of the programme is to encourage achievement of financial- and operational targets. The variable pay programme is based on defined and measurable criteria, including financial targets and targets linked to strategic priorities. 8080 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report The variable pay programme potential is maximized to 50 per cent of the annual base salary. 2.7 Share option plan for executive employees On 19 November 2020, the board of BEWI adopted a share option plan comprising the executive manage- ment and other key employees of the company. The programme was resolved based on the approval by the extraordinary general meeting on 16 November 2020 to authorise the board to issue new shares to employees under a long-term incentive programme. The aggregate number of options under the plan shall never exceed two (2) per cent of the outstand- ing shares of the company, including options already outstanding. The purpose of the share option plan is to further align the interests of the company and its share- holders. The awards of options shall give an interest in the company parallel to that of the shareholders, enhancing the interests of the executives to the com- pany’s continued long-term success and progress and motivate for individual contributions. The share option shall enable the company to attract and retain the executive employees and other key employees. The strike price is set as the market price at the time of the grant of the options plus 10 per cent, to ensure that only value creation from allocation onwards is rewarded. The options vests with 20 per cent per after one year, 30 per cent after two years, and with 50 per cent three years after granted, provided the participant is still employed. The option lapses and becomes void after a period of 5 years. If the employee resigns from his or her position with the company, all unvested options will lapse and becomes void. The maximum profit gain from awarded options under the plan, is capped according to an agreement between the employee and the company. 3. Annual remuneration report BEWI will for each financial year produce and make public a remuneration report in accordance with NPLCA Section 6-16b. Such report shall be considered by the company’s general meeting and shall be subject to an advisory vote by the general meeting in accordance with NPLCA Section 5-6 (4). If the share- holders vote against the remuneration report, the company will explain, in the following remuneration report, how the vote of the shareholders was taken into account. The remuneration report for 2022 is published on the same date as BEWI’s annual report for 2022 and is available from the company’s website, www.bewi. com. The report includes details about the variable pay programme and the company’s long-term incentive programme (share option plan). The notes to the financial statements for the financial year of 2022, includes an overview of the remuneration to the executive management. BEWI has a remuneration committee, which was elected on 3 June 2021 for a period of two years. Instructions for the committee was adopted at the board meeting on 2 June 2022. 4. Temporary derogation from the applicable remuneration policy The board can only derogate from any element of the remuneration policy in exceptional circum- stances, and only in situations where the derogation from the remuneration policy is necessary to serve the long-term interests and sustainability of the company, cfr. NPLCA section 16-6a (4). Any derogation shall be explained and motivated by the company’s and the shareholders’ interests in retaining the executives under extraordinary circum- stances. Any derogation shall be considered by the boards as required in the specific situation and for the individ- ual employee. The remuneration report shall include information on remuneration awarded under such exceptional circumstances. 5. Amendments Material variations in the remuneration policy shall be subject to approval by the BEWI’s general meeting, and the policy shall be considered and approved by the general meeting at least every fourth year. 6. Publication of the remuneration policy The remuneration policy will be made public on BEWI’s website, www.bewi.com. 8181 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Board of directors’ report In 2022, BEWI continued to deliver solid results combined with strong growth from both organic and strategic initiatives. Net sales amounted to EUR 1050 million for the full year, an increase of 40 per cent from 2021, of which 17 per cent was organic growth following successful price management and organic growth initiatives. The company posted an adjusted EBITDA of EUR 134 million, representing 23 per cent growth over the previous year, of which approximately half was organic. During the year, BEWI kept a steady focus on its three stated strategic priorities: innovation, circular economy, and profitable growth. The company strengthened its innovation capabilities, with a top priority to accelerate the group’s progress to becoming circular. BEWI’s ambition to lead the industry’s way towards a circular economy is about the company’s dedication to sustainability throughout its value chain. A description of activities, progress and key priorities going forward is included in the ESG part of this report. Just like the last couple of years, BEWI completed a high number of acquisitions in 2022 and invested in further development of its existing operations, resulting in strong growth. From an annual reported sales of EUR 748 million in 2021, the company closed off 2022 with annual pro forma sales of more than EUR 1 500 million, including full effect of seven acquired companies. Through the acquisitions, the company has expanded into the UK, the Baltics and Spain, broadened its offering, significantly strengthened its market positions, and further developed its recycling platform. In addition, several organic growth initiatives contributed positively to the growth, including the company’s new fish box facility at Senja. Through its integrated and diversified business model, BEWI is exposed to many end markets and geographies. The company experienced mixed market developments in 2022, with volatile raw material prices, resulting in margins shifting from upstream to downstream segments. Further, demand from the building and construction industry dampened in the second half of the year, while demand for packaging remained stable, and demand for automotive components improved. Going forward, BEWI’s key priorities are to integrate acquired companies and extract synergies, adjust capacity to the current market conditions and implement measures to improve profitability in the Nordic insulation business. BEWI’s business model, including the diversified exposure to end markets, combined with a strong organisation, makes the company well positioned in the current challenging markets. 8282 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Overview of the business The board of directors’ report for the BEWI group (“BEWI” or “the group”) comprises BEWI ASA (“the parent company”) and all subsidiaries and associated companies. The parent company, BEWI ASA, is a Norwegian public limited liability company. Business and locations BEWI is an international provider of packaging, com- ponents, and insulation solutions. The group has an integrated and circular business model from produc- tion of raw materials and end goods, collecting used materials for recycling, and re-using the recycled materials to new raw material and new products. The group is headquartered at Hamarvik at the island Frøya, Norway. As per 31 December 2022, the group had a total of 67 production facilities in 13 countries (excluding minority interests): 12 in Norway, 10 in Sweden, 6 in Finland, 10 in Denmark, 1 in Czech Republic, 2 in Lithuania, 3 in Poland, 3 in Germany, 3 in Belgium, 7 in the Netherlands, 3 in Spain, 3 in Portugal, and 4 in the UK. In addition, the group has minority interests in 6 facilities in Germany, 5 in France, 1 at Iceland, and 1 in Poland. BEWI’s business is organised in four segments: RAW, Insulation & Construction (I&C), Packaging & Components (P&C) and Circular. RAW develops and produces the raw materials white and grey expanded polystyrene (EPS), general purpose polystyrene (GPPS), as well as Biofoam, a fully bio-based particle foam. The raw material is sold both internally and externally for production of end products. Insulation & Construction (I&C) develops and manu- factures an extensive range of insulation products for the building and construction industry. The products are primarily composed of EPS, and extruded polysty- rene (XPS). In addition, the segment offers insulation boards from polyisocyanurate (PIR) and mineral wool (MW) sandwich panels. Packaging & Components (P&C) develops and manufactures standard and customised packaging solutions, as well as technical and automotive com- ponents for customers in many industrial sectors, such as food packaging, protective packaging for pharmaceuticals and electronics, re-usable plastic boxes and components for the automotive and heating ventilation and air conditioning industry. The material is composed primarily of EPS, expanded polypropylene (EPP), paper/ fibre and fabricated foam. The company also sells traded products, mainly related to food packaging. Circular is responsible for the group’s collection and recycling of EPS. A further description of each business segments is presented in the section above, about the company’s business model, and below, including financial high- lights for each reporting segment. Vision, mission, and values BEWI’s vision is: Protecting people and goods for a better everyday. BEWI offers solutions that insulate buildings and homes, packaging that protects food and medicines, and components such as bike helmets and child seats for cars that protect people. But the group also takes responsibility by leading the industry’s way to a circular economy, constantly working to improve resource efficiency by using less materials and energy, optimise transport, reduce waste, and reuse and recycle more. By managing the entire value chain, from production of raw materials and end products, to recycling used products back to new raw materials, BEWI can close the loop. BEWI’s mission is: To create value by offering sustaina- ble packaging, components, and insulation solutions in innovative and efficient ways. The group has strong core values, deeply rooted in the organisation, securing customer focus, and acting as important guidelines in the daily work: • Responsible • Proud • Stable • Care for quality Strategic priorities BEWI has three strategic priorities: • Innovation in search for more sustainable materi- als, products, solutions, and production processes. • Circular economy, aiming at being a the most resource efficient provider of packaging, compo- nents, and insulation solutions and being the first company in its industry to close the loop. • Profitable growth through organic initiatives and M&A opportunities targeting increased recycling capacity, geographic expansion, strengthening of market positions and broadening of the company’s offering, in particular with solution from comple- mentary materials. Markets and customers As mentioned above, BEWI has production facilities in 13 countries. However, the group has sales from more than 20 countries and an integrated business model, with exposure to a range of different end markets. The business model has proven robust to volatile raw material prices, and to various challenges facing different industries. 8383 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Increased raw material prices positively impacted the profitability for the upstream segment RAW for the first 8 to 9 months of 2022, while putting pressure on margins for the two downstream segments. Then, when raw material prices decreased for the last months of the year, margins shifted between the segments. Following the acquisitions completed in 2022, BEWI’s exposure to the building and construction industry increased. Going into 2023, approximately 60 per cent of the group’s sales are from this industry, including sales from the RAW and Insulation & Construction segments. Food packaging accounts for approximately 20 per cent, the automotive industry approximately 5 per cent and other packaging and components approximately 15 per cent. Demand from the building and construction industry decreased during the second half of 2022 and into 2023. BEWI expects volumes from this industry to end up at approximately 10 per cent lower for 2023 than for 2022 but remains confident in the long-term outlook for its solutions to this industry, supported by strong underlying fundamentals, including the need to improve energy efficiency in buildings and related regulations. Demand for food packaging, as well as technical and automotive components has remained stable, with positive contribution from organic initia- tives and M&As. Important developments in 2022 Organic growth initiatives Growth initiatives remain a high priority for BEWI. The company invests in organic growth and has a strong pipeline of M&A opportunities. Below is a description of some key investment pro- grammes in the BEWI group: Packaging & Components Norway In 2021, BEWI established a new fish box facility at Senja, Norway, where the company has a long- term supply agreement with its customer SalMar. Production commenced in the third quarter of 2021, with ramp-up of volumes throughout 2022. The new facility contributed positively to the group’s results for the second half of 2022 and a further positive volume development is expected in 2023. In March 2021, BEWI announced its plans to set up a new packaging facility on the Jøsnøya island, Hitra, Norway. The real estate group KMC Properties ASA is responsible for the development project, which commenced in May 2022. BEWI has been rewarded a long-term supply agree- ment with the listed seafood company Mowi, the world’s largest producer of Atlantic salmon. Under the contract, BEWI will supply fish boxes directly to Mowi’s processing lines from the new Jøsnøya facility, with expected start in the second quarter of 2023. Packaging & Components Sweden In the first quarter of 2022, investments related to a Heating Ventilation Air Condition (HVAC) system for the customer Bosch was initiated at BEWI’s facility in Skara, Sweden. Commercialisation started in the fourth quarter of 2022, with expectations of increased volumes of specific EPP components going forward. New extruder in Etten-Leur In the fourth quarter of 2021, investments into a new twin screw extrusion line at the RAW production site in Etten-Leur started. The new extrusion line will increase production capacity of recycled grades and grey products, and production is expected to start in 2023. Insulation Benelux In 2022, Jackon initiated an investment in a new pro- duction line for production of construction boards in Belgium. The production serves the European market, as well as the UK. The new production line will close to double current capacity. Production is expected to start in the second half of 2023. ICT BEWI has initiated a transformation of its IT environ- ment, to build a scalable platform supporting the company’s continuous growth. This includes, among several initiatives, investments in new infrastructure and ERP systems, as well as improved processes and strengthening of competence and capacities within certain areas such as IT security. Acquisitions In 2022, BEWI completed a total of seven acquisitions, all in line with the group’s strategic priorities as referred to above, adding close to EUR 600 million in annual net sales and EUR 40 million in EBITDA. BEWI’s M&A opportunities are mainly within the following categories: • Strengthening of market positions • Broadening product offering • Geographic expansion • Recycling consolidation In addition, the company increased its ownership from 51 to 100 per cent of the Danish paper packaging company Cellpack (previously named Honeycomb Cellpack) and divested real estate for approximately NOK 900 million. Below is a descrip- tion of the transactions completed in 2022 in the order of appearance. 8484 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Period Company Region Annual sales Key offering Strategic rationale Q2 2022 Trondhjems Eskefabrikk Norway EURm ~15.5 Paper packaging Broadening offering with complimentary materials Jablite Group UK EURm ~58.6 Packaging and insulation Geographic expansion to UK Berga Recycling Global EURm ~34.5 Circular trading platform Expanding circular platform Q3 2022 BalPol Baltics EURm ~34.7 Insulation Geographic expansion to the Baltics and broadening offering with complimentary materials Q4 2022 Jackon Holding Europe EURm ~423.0 Raw materials, packaging and insulation Strengthening market positions Aislenvas Spain EURm ~18.3 Insulation Geographic expansion to Spain Inoplast Czech EURm ~6.6 Circular Strengthening circular offering and volumes Acquisition of Scandinavian paper packaging company On 28 February 2022, BEWI announced its intention to acquire 100 per cent of a Scandinavian paper packaging company. Further, on 12 April 2022, the company announced the signing of an agreement to acquire the Norwegian paper packaging company Trondhjems Eskefabrikk AS. The acquisition was com- pleted in April and the company was consolidated into BEWI’s accounts from 1 May 2022. Trondhjems Eskefabrikk is manufacturing fibre-based packaging products, such as carton boxes to the food industry, which are 100 per cent recyclable, and a significant share of the raw material used is recycled fibres. The acquisition provided BEWI with an extended offering of recyclable and recycled products, in line with the company’s strategy to provide its customers with complementary solutions. Also, the acquisition supports the company’s sustainability target to increase the use of non-fossil raw materials. Acquisition to become 100% owner of Jablite Group On 16 May 2022, BEWI acquired the remaining 51 per cent of the leading UK based insulation and pack- aging company Jablite Group. BEWI first announced its acquisition of 49 per cent of Jablite in June 2020. Since then, Jablite has completed a restructuring programme, resulting in significant profitability improvement. Jablite was consolidated into BEWI’s accounts from 1 June 2022. Through the acquisition, BEWI expanded into the UK, gaining a good market position and three production facilities which complemented the UK based opera- tions of Jackon well. Acquisition of the recycling platform company Berga Recycling On 10 June 2022, BEWI acquired Berga Recycling Inc., a world leader in the purchase and sale of materials for recycling. Berga was consolidated into BEWI’s accounts from 1 June 2022. In 2022, Berga collected approximately 65 000 tonnes of materials for recycling through a network of hundreds of customers globally. The trading is com- pleted through an online trading platform, which is linked to Berga’s comprehensive network of logistic partners. The trading platform provides BEWI with access to a tool for further consolidation and growth of its circular business, as the platform is scalable, and easily applicable to other recycling companies. Acquisition of the Lithuanian insulation company BalPol On 1 July 2022, with reference to the stock exchange notice of 18 February 2022, BEWI announced that it had signed an agreement to acquire the Lithuanian insulation company UAB Baltijos Polistirenas (“BalPol”). BalPol is the market leader in Lithuania for insulation solutions from expanded polystyrene (EPS) and polyisocyanurate (PIR) and is also a provider of EPS packaging solutions. The transaction was closed in August 2022 and BalPol was consolidated into BEWI’s accounts from 1 September 2022. BalPol, who changed its name to BEWI Lithuania as of 1 March 2023, operates two downstream facilities, whereas one produces PIR and mineral wool (MW) sandwich panels and PIR insulation boards and the other produces insulation solutions from EPS for construction and packaging products from EPS and expanded polyethylene (EPE). Through the acquisition, BEWI expanded its geo- graphic footprint into the Baltics, enabling sales growth, as well as establishing a platform for circular 8585 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report activities. At the same time, the company was broad- ening its insulation offering. Completion of acquisition of Jackon Holding On 19 October, BEWI completed its acquisition of Jackon Holding, including issuance of 32 070 000 new shares directed to the Akselsen family and their investment company HAAS AS, as consideration for their 50 per cent holding of the shares of Jackon. The shares were subject to a 12-months lock-up from issuance. The shareholders that held the remaining 50 per cent received approximately NOK 1.3 billion in cash upon closing. Jackon was consolidated into BEWI’s accounts from 1 November 2022. At the time of closing, Jackon had approximately 970 employees and owned 20 facilities in Norway, Sweden, Finland, Denmark, Germany, and Belgium. The approval of the transaction from the competition authority in Finland was conditional upon BEWI divesting two insulation facilities, located in Tarvasjoki and Ruukki. In Norway, the approval was conditional upon divestments of Jackon’s packaging facility in Alta and the share (63 per cent) of the packaging facility called Kasseriet in Gratangen. All divestments were completed in October 2022. In its report for the fourth quarter of 2022, BEWI maintained its previously communicated expecta- tions of synergies of more than EUR 15 million. Acquisition of Spanish insulation company Aislenvas On 28 November 2022, BEWI entered an agreement to acquire 80 per cent of the Spanish insulation company Aislenvas. The acquisition was completed in December 2022, and the company was consolidated into BEWI’s accounts from 31 December 2023. Aislenvas operates three facilities, all in the same industrial area, manufacturing a variety of EPS- based solutions. The company’s key products are insulation solutions, including EPS boards for underfloor heating and EPS panels for External Thermal Insulation Composite Systems (ETICS) used to improve the energy efficiency for building renova- tions. Acquisition to become 100% owner of recycling company Inoplast In December 2022, BEWI acquired an additional 66 per cent of the Czech recycling company Inoplast, becoming owner of 100 per cent of the company. BEWI first announced its acquisition of 34 per cent of Inoplast in March 2021. Inoplast was consolidated into BEWI’s accounts from 31 December 2022. Inoplast specialises in recycling of plastics, mainly expanded polystyrene (EPS), but also other types of plastics. Other important events Closing of first tranche in divestment of industrial real estate portfolio On 30 June 2022, BEWI announced that it had entered an agreement with KMC Properties ASA for the sale of up to 24 properties and one land plot, with a gross asset value of up to approximately NOK 2.0 billion. In November 2022, the first tranche of the transaction was completed, including 11 properties and one land plot in Norway and Sweden valued at approximately NOK 900 million. Net of taxes, BEWI received approx- imately NOK 850 million in cash for the properties. In connection with the transaction, long term triple net rental agreements were entered for the properties. Further, KMC Properties has an exclusive right to acquire the remaining part of the portfolio valued at up to NOK 1.1 billion, including, but not limited to properties in Belgium, Finland, and Denmark, within twelve months from the agreement was entered on 30 June 2022. Synbra concluding settlement agreement with the EU Commission On 29 November 2022, BEWI announced that its subsidiary, Synbra, had concluded a settlement agreement with the European Commission entailing a payment of EUR 17.2 million. The settlement was related to Synbra’s potential involvement in anticompetitive practices of styrene monomer purchasing during 2013 and 2014, i.e., five years prior to BEWI’s acquisition of Synbra. As part of the acquisition of Synbra, BEWI received customary warranties from the sellers of Synbra. BEWI intends to pursue the insurance for coverage, and subsequently potentially the sellers. Implications of Russia’s invasion of Ukraine BEWI’s exposure to Russia has been relatively modest, mainly including sales of EPS beads from segment RAW and sales of food packaging products to the Russian fishing industry. Net sales for the group to Russia amounted to EUR 29.2 million for the full year 2021 and to EUR 14.0 million for the full year 2022. During the first quarter of 2022, BEWI stopped all sales of EPS beads to Russia. Sales to the Russian fishing vessels, mainly from the Norwegian opera- tions, was stopped in the third quarter, following the Norwegian authorities’ position. For the full-year of 2022, the financial impact from sanctions and reduced business volume with Russia was limited to EUR 0.1 million in provisions for doubt- ful accounts and EUR 0.2 million in write-down of inventory ear-marked for Russian customers. 8686 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Financial review All amounts in brackets are comparative figures for 2021 unless otherwise specifically stated. The following financial review is based on the con- solidated financial statements of BEWI ASA and its subsidiaries. The statements have been prepared in accordance with International Financial Reporting Standards (IFRS). In the view of the board, the income statement, the statements of comprehensive income, changes in equity and cash flow, the balance sheet and the accompanying notes provide satisfactory information about the operations, financial results and position of the group and the parent company on 31 December 2022. Consolidated statement of income Net sales increased to EUR 1 050.4 million for the full year 2022 (748.2), corresponding to an increase of 40.4 per cent, of which 24.4 per cent was driven by the net of acquisitions and divestments and 16.5 per cent was organic growth, mainly following price increases. Adjusted EBITDA ended at EUR 133.6 for the full year (109.0), an increase of 22.6 per cent, of which 11.5 per cent was net of acquisitions and divestments, and 10.7 per cent was organic growth. All segments except Circular contributed positively to the organic growth. The adjusted EBITDA margin for the year ended at 12.7 per cent (14.6). Operating income (EBIT) came in at EUR 68.0 million for the period (67.8). In 2022, EBIT was positively impacted by the EUR 9.6 and EUR 1.1 million gain from revaluation of shares in Jablite and Inoplast respectively, following BEWI’s acquisition of the remaining shares in these companies and the subse- quent consolidations. EBIT was negatively impacted by the EUR 17.2 million settlement agreement with the European Commission, as explained above. Net financial items amounted to a negative EUR 25.5 million for the year (-18.8). The increased financial expenses are explained by higher interest rates and increased interest-bearing debt from acquired companies throughout the year. The year was also negatively impacted by a EUR 3.7 million fair value adjustment of shares in the listed real estate company KMC Properties ASA (-0.5) and a EUR 2.9 million revaluation of an option to acquire a minority shareholding (-0.0). Taxes amounted to a negative EUR 7.2 million for the year (-14.6). The main factors impacting the effective tax rate are the positive tax effect related to the sale and leaseback transactions with KMC Properties and the settlement agreement with the European Commission. Net profit for 2022 was EUR 35.4 million (34.4). Financial position and liquidity Consolidated financial position Total assets amounted to EUR 1 300.7 million on 31 December 2022, compared to EUR 785.7 million at year-end 2021. The increase mainly relates to acquired companies. Total equity amounted to EUR 429.8 million at the end of 2022 representing an equity ratio of 33.0 per cent, up from EUR 262.2 million and an equity ratio of 33.4 per cent at the end of 2021. Net debt amounted to EUR 550.7 million on 31 December 2022 (382.3 excluding IFRS 16), com- pared to EUR 196.4 million at year-end 2021 (120.3 excluding IFRS 16). Cash and cash equivalents were EUR 47.5 million on 31 December 2022, compared to EUR 142.3 million at year-end 2021. Consolidated cash flow Cash flow from operating activities amounted to EUR 40.9 million for the full year of 2022 (67.4), includ- ing an increase in working capital of EUR 46.9 million (6.8). The increase in working capital was mainly related to increased inventory levels in segment RAW and Circular and lower accounts payable which mainly was related to timing of styrene payments. Cash flow used for investing activities amounted to a negative EUR 179.7 million (-85.9). Capital expendi- tures were higher than for 2021, driven by specific projects and newly acquired companies. Cash outflow from business acquisitions noted a signifi- cant increase due to the many acquisitions during the year, of which the Jackon acquisition accounted for the biggest portion. The full year numbers were also largely impacted by the sale and lease back transac- tions completed in November, following the closing of the Jackon transaction in October. Cash flow from financing activities amounted to a positive EUR 46.9 million (positive 107.3) and was dominated by the utilisation of the revolving credit facilities in connection with the Jackon acquisition, partly offset by reduced leasing liabilities and dividends paid. The positive cash flow in 2021 was mainly explained by the bond refinancing and a new share issue. In total, the cash flow for 2022 amounted to a nega- tive EUR 91.9 million (positive 89.2). Capital expenditures (CAPEX) For the full year of 2022, CAPEX amounted to EUR 43.7 million (34.7), of which EUR 16.0 million related to greenfield and other customer specific projects, and EUR 4.2 million related to CAPEX in Jackon, which was consolidated into BEWI’s accounts from 1 November 2022. 8787 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report In total, Jackon recorded approximately EUR 17 million in CAPEX in 2022. The majority was related to investments in new production lines, to support organic growth, including construction board pro- duction, fully robotic production line for foundation elements, and production for underlayment for flooring products. BEWI has announced an annual target for invest- ments (CAPEX) of 2.5 per cent of net sales excluding greenfield projects, customer specific initiatives and ICT investments. For the full year of 2022, such invest- ments accounted for 2.6 per cent. For further information about the company’s invest- ment programmes, see section above about organic growth initiatives and investment programmes. Segment information Segment RAW Segment RAW develops and produces white and grey expanded polystyrene (EPS), general purpose polystyrene (GPPS), as well as Biofoam, a fully bio-based particle foam. The raw material is sold internally and externally for production of end products. BEWI produces raw material at 3 facilities in Finland (Porvoo), the Netherlands (Etten-Leur) and Germany (Wismar). The group has an annual capacity of approximately 280 000 tonnes EPS. Key figures Amounts in million EUR (except percentage) 2022 2021 Net sales 418.0 347.9 Of which internal 142.0 104.6 Of which external 276.0 243.3 Net operating expenses -361.0 -293.9 Adjusted EBITDA 57.0 54.1 Adjusted EBITDA % 13.6% 15.5% Items affecting comparability -17.0 0.1 EBITDA 40.0 54.2 Depreciations -4.3 -4.2 From 1 November 2022, the financials for Jackon Holding were consolidated into BEWI’s accounts. Net sales for segment RAW for the full year of 2022 were EUR 418.0 million (347.9), up by 20.1 per cent from 2021, mainly explained by increased sales prices. The consolidation of Jackon contributed EUR 12.5 million to the sales. Adjusted EBITDA ended at EUR 57.0 million for the full year (54.1). The improvement primarily relates to a strengthened GAP. The consolidation of Jackon contrib- uted EUR 1.2 million to the adjusted EBITDA for 2022. Segment Insulation & Construction (I&C) Segment I&C develops and manufactures an extensive range of solutions for insulation and other applications for the building and construction industry. The prod- ucts are primarily composed of expanded polystyrene (EPS) and extruded polystyrene (XPS). The Nordic markets account for approximately 40 per cent of the sales, whereas other European countries account for the remainder. As per 31 December 2022, and follow- ing recent acquisitions, BEWI operated 28 facilities in 11 countries producing insulation solutions. In addition, BEWI has minority interests in 5 facilities in France and 6 facilities in Germany. Measures for greater energy efficiency are important drivers of demand in the European construction market. Effective insulation for walls, ceilings and floors are the most cost-efficient way of achieving greater energy efficiency and reducing greenhouse gas emissions. Insulation markets are mostly local. The degree of product specialization varies greatly among different countries and markets. Around 70 per cent of the insulation material is used for new construction and the remainder for renovations. Key figures Amounts in million EUR (except percentage) 2022 2021 Net sales 333.9 195.4 Of which internal 4.0 2.8 Of which external 329.9 192.7 Net operating expenses -302.8 -173.9 Adjusted EBITDA 31.1 21.6 Adjusted EBITDA % 9.3% 11.0% Items affecting comparability 2.5 0.9 EBITDA 33.6 22.5 Depreciations -11.3 -7.9 Kemisol was consolidated from 1 December 2021, Jablite from 1 June 2022, BalPol from 1 September 2022, and Jackon from 1 November 2022. Net sales amounted to EUR 333.9 million for the full year of 2022 (195.4), an increase of 70.8 per cent. Of this, 25.2 per cent was organic growth mainly driven by increased sales prices related to the higher cost of raw materials. Acquisitions and divestments contrib- uted net 46.2 per cent for the full year. Adjusted EBITDA increased with EUR 9.5 million and amounted to EUR 31.1 million (21.6). This represents an increase of 44.3 per cent, of which 29.5 per cent, i.e., EUR 6.4 million, was organic growth. 8888 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Segment Packaging & Components (P&C) Segment P&C develops and manufactures standard and customised packaging solutions and technical components for customers in many industrial sectors. The solutions are composed of a variety of materials, including expanded polystyrene (EPS), expanded polypropylene (EPP), fabricated foam, carboard, fibre (paper), as well as other materials, enabling a broad product offering. Examples include boxes and bags for transportation of fresh fish and other food, protec- tive packaging for pharmaceuticals and electronics, and components for cars and heating systems. In addition, the company sells traded products, mainly related to food packaging. As per 31 December 2022, BEWI operated 35 facilities in 9 countries producing P&C components. Key figures Amounts in million EUR (except percentage) 2022 2021 Net sales 391.9 295.6 Of which internal 10.0 6.9 Of which external 381.9 288.7 Net operating expenses -343.6 -255.3 Adjusted EBITDA 48.3 40.3 Adjusted EBITDA % 12.3% 13.6% Items affecting comparability 4.9 -0.4 EBITDA 53.3 39.9 Depreciations -19.7 -16.6 Trondhjems Eskefabrikk was consolidated from 1 May 2022, Styropack (packaging part of Jablite) from 1 June 2022, and Jackon from 1 November 2022. Net sales amounted to EUR 391.9 million (295.6), an increase of 32.6 per cent. Excluding acquisitions, sales increased by 11.5 per cent explained by increased sales prices in all regions, as well as increased volumes at the Senja facility. Adjusted EBITDA amounted to EUR 48.3 million (40.3), up by 20.0 per cent. Excluding acquisitions, adjusted EBITDA increased by 7.9 per cent. Circular Segment Circular is responsible for BEWI’s collection and recycling of EPS. Since the establishment of the business unit in 2018, the segment has launched several initiatives, in addition to acquisitions, to increase the group’s recycling capacity. At year-end 2022, the group had access to a recycling capacity of approximately 29 000 tonnes and a collection run- rate of approximately 38 000 tonnes. BEWI has announced an annual target of recycling 60 000 tonnes of EPS by the end of 2026. The number refers to approximately one-third of BEWI’s annual production, which is the volume BEWI puts into the end markets with a lifetime less than one year. As per 31 December 2022, BEWI operated 7 recycling facilities in 6 countries. Key figures Amounts in million EUR (except percentage) 2022 2021 Net sales 63.1 24.0 Of which internal 0.7 0.6 Of which external 62.4 23.4 Net operating expenses -60.6 -23.4 Adjusted EBITDA 2.5 0.6 Adjusted EBITDA % 3.9% 2.5% Items affecting comparability 0.1 -0.3 EBITDA 2.6 0.3 Depreciations -1.7 -1.0 Volker Gruppe was consolidated from 1 October 2021 and Berga Recycling from 1 June 2022. Net sales for segment Circular for the full year 2022 came in at EUR 63.1 million (24.0), up by 162.7 per cent from 2021, of which 46.9 per cent was organic growth coming from higher volumes and increased sales prices. Adjusted EBITDA ended at EUR 2.5 million for year (0.6). The improvement relates to the acquisition of Berga Recycling. In 2022, BEWI collected a total of 29 440 tonnes of EPS for recycling, including seven months of recy- cling volumes from Berga Recycling, representing an increase of 49.2 per cent since 2021. Corporate Revenues and costs related to group functions that do not belong to any specific business segment are booked as unallocated costs. For the full year of 2022, the contribution from corporate costs was negative EUR 5.6 million (-7.6). Research and development (R&D) BEWI has three strategic priorities, of which inno- vation is one of the priorities. BEWI is constantly searching for more sustainable materials, products, solutions, and production processes, aiming at improving resource efficiency and increasing the use of recycled materials. The group conducts R&D activ- ities at selected upstream and downstream facilities, and the activities are coordinated and overseen by group and R&D functions in the segments. For the full year 2022, CAPEX related to R&D amounted to EUR 0.4 million. Going concern The annual financial statements for 2022 have been prepared on the assumption that BEWI is a going concern pursuant to section 3-3a of the Norwegian Accounting Act. With reference to the group’s results and financial position, as well as forecasts for the years ahead, the conditions required for continuation as a going concern are hereby confirmed to exist. In the opinion of the board of directors, the group’s financial position is good. 8989 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Parent company results and allocation of net profit The financial statements for the parent company are prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway. The parent company had a loss before taxes of NOK 30.7 million (a profit of NOK 40.9 million). The parent company had payable taxes of NOK 6.9 million (NOK 7.6 million) and thus recorded a net loss of NOK 23.8 million (net profit of NOK 33.3 million). The board proposes a dividend of NOK 0.60 per share, corresponding to the following allocation of the net profit of NOK 115.0 million for the parent company, based on 191 722 290 shares outstanding: Amounts in million NOK Transferred to other equity -138.8 Dividend 115.0 Total allocated -23.8 Following an evaluation, the board has concluded that the group will have an equity and liquidity after paying the proposed dividend, which is acceptable in relation to the risks and scope of its activities. Risks and risk management BEWI is exposed to several risk factors, categorized into operational risks, including market risk and risk related to production, legal risks, sustainability related risks and financial risks. One of the most important risk factors, is the group’s exposure to the change in the price of the raw material styrene monomers. The raw material is traded on the world market and purchased with a combination of spot and contract prices. The purchase price is partly linked to the level of supply and demand, and partly to the price of oil. The price of styrene is set in dollars and euro, and naturally entails a risk exposure against the Scandinavian currencies. The price of the final product to end customers in the Scandinavian coun- tries is largely connected to the price of styrene, thus entailing a reduction of currency risk. A detailed description of the financial risks and uncertainty factors can be found in the notes to the financial statements. An overview of the company’s most important operational risks, legal risks and sustainability related risks can be found in a separate section of this report. Corporate governance Good corporate governance provides the founda- tion for long-term value creation, to the benefit of shareholders, employees, and other stakeholders. The board of directors of BEWI has established a set of governance principles to ensure a clear division of roles between the board of directors, the executive management, and the shareholders. The principles are based on the Norwegian Code of Practice for Corporate Governance. BEWI is subject to annual corporate governance reporting requirements under section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Governance, cf. section 4.4 of the Oslo Rule Book II, rules for issuers listed at the Oslo Børs. The Accounting Act may be found (in Norwegian) at www.lovdata.no. The Norwegian Code of Practice for Corporate Governance, which was last revised on 14 October 2021, may be found at www.nues.no. The annual statement on corporate governance for 2022 has been approved by the board and can be found in a separate section of this annual report. Corporate social responsibility BEWI is subject to corporate responsibility reporting requirements under section 3-3c of the Norwegian Accounting Act. A separate report on ESG (Environmental, Social, Governance) is included in this annual report. The report has been prepared in referance to the Global Reporting Initiative (GRI) Standards (2021). The report covers material environmental, social, and economic impacts and the management approach of BEWI ASA (BEWI) for the calendar year 2022. The report aligns with the company’s financial reporting period and represents BEWI’s Communication on Progress to demonstrate its commitment to the United Nations Global Compact. BEWI aims to create value for customers, sharehold- ers, employees, and the society at large, first and foremost, by producing a variety of sustainable products and solutions supporting its customers’ sustainability strategies. BEWI’s license to operate rests on confidence from its key stakeholders. All employees are therefore required to comply with the group’s code of conduct to ensure high ethical standards in its business conduct and relations with customers, suppliers, and employees. 9090 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report BEWI is characterised by continuous growth and development. The group launched a sustainability strategy in March 2021 and reports on its progress to selected KPI’s on an annual basis. Employees and organisation BEWI’s most important asset is the knowledge and skills of its employees. As of 31 December 2022, BEWI had 3 293 employees, up from 2 097 on 31 December 2021. The increase mainly reflects acquisitions during the year. The group had an average work force of 2 372 full time equivalents (FTEs) in 2022, compared to an average of 1 662 in 2021. Long-term incentive programme and employee share offering In November 2020, BEWI launched a long-term incentive programme for selected key employees. The programme is a share options programme. Pursuant to the vesting schedule, 20 per cent of the options vested one year after the day of grant, i.e., in November 2021, and another 30 per cent vested two years after the day of grant, in November 2022. The remaining 50 per cent will vest in November 2023. Vesting is dependent on the option holder still being employed in the company. The strike price at grant date for all options granted was NOK 24.48 per share, which was based on the market price plus 10 per cent when granted. At year-end 2022, the strike price amounted to NOK 22.94 per share. Options that have not been exercised within 5 years from the date of grant will lapse and become void. On 31 December 2022, a total of 2 372 500 options were outstanding, corresponding to 1.2 per cent of the total number of outstanding shares. 972 250 options were vested but not exercised at year-end 2022. The board of directors From the annual general meeting in 2021, BEWI’s board of directors consisted of Gunnar Syvertsen as the chairperson and Stig Wærnes, Kristina Schauman, Rik Dobbelaere, and Anne-Lise Aukner as directors. On 16 February 2022, BEWI held an extraordinary general meeting whereas Andreas M. Akselsen, representing HAAS AS, the company’s second largest shareholder, was elected new board member, replacing Stig Wærnes, subject to – and with effect of completion of the Jackon transaction. Thus, Andreas M. Akselsen became a director of the board as of 19 October 2022, when the acquisition of Jackon was formally completed. Further information on the directors of the board, as well as the use of board committees are included in the section about corpo- rate governance in this report. BEWI’s Articles of Association provide that the board shall consist of between three and eight members. BEWI has an insurance covering the responsibilities of the board of directors, the CEO and other senior management. Health, safety and working environment Working environment, sickness absence, incidents, and injuries The working environment in the BEWI group is perceived as good. In March 2021, BEWI launched a sustainability strategy, setting out the group’s promise by 2030. The commitments were divided in three main categories: (1) Becoming circular, (2) Actively engage in partnerships and (3) Contribute to an inclusive society, of which the latter includes being a responsible employer. This includes the company’s commitments to making gender equality a reality and providing equal opportunities irrespective of ethnical background, religion, age, or sexual orientation. It also includes that 100 per cent of the employees of BEWI will have a development plan which will enable them to grow, have a voice, engage, and reach their full potential. The group will never compromise with health and safety and will work actively to ensure preventive actions with zero accidents. In 2022, the group had 5.3 per cent absence due to illness, compared to 4.8 per cent in 2021. The group reported 54 accidents in 2022, compared to 26 in 2021. Out of these accidents, 25 had less than 5 days of sickness and 7 accidents resulted in more than 21 days of sick leave. The cost common type of acci- dents is fall- or cut accidents. All accidents, regardless of the severity, were followed up with an analysis of root cause and implementation of preventative measures. For further information about management of health and safety, employee satisfaction and leadership development, see the ESG performance report of this report. Equal opportunities The board of directors of BEWI ASA consists of five members, of which two are women. The group has an executive management team consisting of six executives, of which three are men and three are female. The group is committed to promoting equality and equal treatment at all stages of the organisation and other relationships. For further information about equal opportunities in the group, see section in the sustainability report. 9191 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Share and shareholder matters BEWI ASA’s shares have been listed at the Euronext Oslo Børs since December 2020. On 31 December 2022, the total number of shares outstanding in BEWI ASA was 191 347 992, each with a par value of NOK 1. Each share entitles to one vote. During 2022, the share traded between NOK 78.80 and NOK 43.00 per share, with a closing price of NOK 45.90 on 30 December 2022. BEWI has one share class, and all shares have equal rights. The shares are registered in the Norwegian Central Securities Depository (VPS). The company’s registrar is DNB Markets. The shares carry the securi- ties number ISIN NO 001 0890965. On 31 December 2022, the 20 largest shareholders of BEWI ASA held 93.49 per cent, of which the largest shareholders are BEWI Invest AS, where the Bekken family is a majority shareholder, holding 51.19 per cent, HAAS AS, owned by the Akselsen family, holding 16.76 per cent, Kverva Industrier, owned by the Witzøe family, holding 7.99 per cent. General meetings On 16 February 2022, BEWI held an extraordinary general meeting. At the meeting, the board was authorised to issue a total of 32 070 000 consideration shares to HAAS AS, the owner of 50 per cent of Jackon Holding AS, subject to completion of the transaction. In addition, Andreas M. Akselsen was elected new board member, replacing Stig Wærnes, subject to – and with effect of completion of the Jackon transaction. The general meeting also approved the nomination committee’s proposal for changes in the composition of the nomination committee. BEWI held its annual general meeting on 2 June 2022. All resolutions proposed by the board of directors were approved, including the proposal to distribute dividends of NOK 1.10 per share. The dividends were distributed after completion of the Jackon transac- tion. BEWI’s annual general meeting for 2023 is planned to be held on 1 June 2023. Dividends BEWI targets annual dividends of 30 to 50 per cent of the group’s net profit. When deciding on the annual dividend, the board of directors will consider the group’s financial position, investment plans as well as the needed financial flexibility to provide for sustain- able growth. In 2022, BEWI ASA distributed dividends of NOK 1.10 per share based on the results for the financial year of 2021. The dividends were distributed on 18 November 2022, following completion of the Jackon transaction in October. A total of EUR 20.8 million was distributed. On 15 February 2023, the board of directors of BEWI proposed to pay a dividend of NOK 0.60 per share for the financial year of 2022. The proposal is in line with the company’s dividend policy and will be dealt with at BEWI’s annual general meeting on 1 June 2023. Events after the close of the period Measures to adjust capacity and reduce costs in Nordic Insulation Following the combination with Jackon, and in response to the current market conditions, BEWI has initiated measures to optimize its production footprint and reduce capacity to current demand. This includes reduced shifts at several facilities, and temporary closure of one facility. In addition, the company has taken measures to reduce the cost base of its Nordic Insulation business. In total, the company expects annual savings of approximately EUR 5 million. Exercise of options and increase of share capital On 18 February 2023, BEWI announced that, follow- ing exercise of options by option holders under the company’s share option programme, the board had resolved to increase the Company’s share capital by NOK 374 298, by the issuance of 374 298 new shares at a subscription price of NOK 22.96 per share by use of the authorisation granted by the general meeting on 2 June 2022. Agreement to divest real estate for NOK 348 million On 31 March 2023, BEWI announced, with reference to the real estate transaction announced on 30 June 2022, that the company had entered an agreement with KMC Properties ASA for the divestment of four properties, of which three properties in Finland and one in Denmark valued at NOK 348.3 million. The purchase price will be settled in the form of an amount equal to approx. NOK 200.0 million in cash and NOK 148.3 million in 20 235 931 new shares in KMC Properties at a subscription price of NOK 7.33 per share. KMC Properties has an exclusive right to acquire the remaining part of the portfolio until 30 June 2023. Through the acquisition of the 20 235 931 new shares in KMC Properties, BEWI will increase in shareholding to a total of 28 807 359 shares corresponding to 8.4 per cent of the issued share capital of KMC Properties. 9292 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Outlook During 2022, BEWI experienced a mixed market development between segments and regions, and this has continued into 2023. Due to the current macro environment, markets are characterised by high uncertainty. However, BEWI has proven its ability to manoeuvre well in volatile markets, and the com- pany’s integrated and diversified business model has proven to be a competitive advantage in challenging markets. In the second half of 2022, the building and construc- tion industry showed reduced activity, especially in the Nordics. Following the acquisitions completed in 2022, approximately 60 per cent of BEWI’s business is exposed to this industry. The company expects approximately 10 per cent lower demand from building and construction for 2023 than for 2022. Still, the long-term demand for insulation solutions is supported by strong market fundamentals, including the need to improve energy-efficiency in buildings and related regulations. The demand for food pack- aging is expected to remain stable, with positive contribution from organic initiatives and M&As, and demand for both technical and automotive compo- nents is solid. Going forward, BEWI will continue focusing on integrating acquired companies, including extracting synergies, and adjust production capacity and cost level to the current market conditions. Based on the company’s financial position, invest- ment plans and growth ambitions, the board of directors of BEWI will propose to the general meeting to pay dividends of NOK 0.60 per share, in line with the company’s dividend policy of 30 to 50 per cent of net profit. The dividends are proposed to be distrib- uted following a sale of the company’s real estate portfolio. The board of directors remain confident in BEWI’s robust business model, strong organisation, and the outlook for continued profitable and sustainable growth of the company. Trondheim, Norway, 24 April 2023 The board of directors and CEO BEWI ASA Gunnar Syvertsen Chair of the board Anne-Lise Aukner Director Rik Dobbelaere Director Andreas M. Akselsen Director Kristina Schauman Director Christian Bekken CEO 9393 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Statement by the board of directors and CEO We confirm, to the best of our knowledge, that • The group financial statements for the period from 1 January to 31 December 2022 have been prepared in accordance with IFRS, as adopted by the EU • The financial statements of BEWI ASA for the period from 1 January to 31 December 2022 have been prepared in accordance with Norwegian Accounting Act and accounting standards and practices generally accepted in Norway • The financial statements give a true and fair view of the group and the company’s consolidated assets, liabilities, financial position, and results of operations • The board of directors’ report provides a true and fair view of the development and performance of the business and the position of the group and the company, together with a description of the key risks and uncertainty factors that the group and the company is facing. Trondheim, Norway, 24 April 2023 The board of directors and CEO BEWI ASA Gunnar Syvertsen Chair of the board Anne-Lise Aukner Director Rik Dobbelaere Director Andreas M. Akselsen Director Kristina Schauman Director Christian Bekken CEO 9494 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Financial statements 9595 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BEWI annual report BEWI annual report Contents The Group Consolidated comprehensive income statement 97 Consolidated statement of financial position 98 Consolidated statement of financial position 99 Consolidated statement of changes in equity 100 Consolidated cash flow statement 101 Accounting principles and notes to the accounts 102 Note 01 General information 102 Note 02 Summary of key accounting principles 102 Note 03 Financial risk management 107 Note 04 Critical accounting estimates and assessments 112 Note 05 Net sales distribution and segment information 112 Note 06 Employee remuneration etc. 115 Note 07 Remunerations to auditors 117 Note 08 Leasing 117 Note 09 Financial income and expense 118 Note 10 Exchange differences – net 119 Note 11 Income tax 119 Note 12 Intangible assets 121 Note 13 Tangible assets 123 Note 14 Business acquisitions 124 Note 15 Sale of business 129 Note 16 Shares in associates 130 Note 17 Financial instruments per category 132 Note 18 Account receivables 133 Note 19 Inventory 134 Note 20 Prepaid expenses and accrued income 134 Note 21 Cash and cash equivalents 134 Note 22 Share capital 134 Note 23 Share-based incentive programme 136 Note 24 Earnings per share 137 Note 25 Borrowings 137 Note 26 Pensions and similar obligations to employees 140 Note 27 Other provisions 143 Note 28 Accrued expenses and deferred income 143 Note 29 Contingent liabilities 143 Note 30 Pledged assets 144 Note 31 Related parties 144 Note 32 Adjustments for non-cash items, etc. 146 Note 33 Subsequent events 147 Parent company Income statement of the parent company 148 Statement of financial position of the parent company 149 Statement of financial position of the parent company 150 Cash flow statement for the parent company 151 Accounting principles and notes to the accounts 152 Note 01 General information 152 Note 02 Summary of key accounting principles for the parent company 152 Note 03 Net sales 153 Note 04 Employee remuneration etc. 153 Note 05 Interest income and interest expense and similar items 154 Note 06 Income tax on the profit for the year 155 Note 07 Shares in subsidiaries and associates 155 Note 08 Cash and bank balances 157 Note 09 Share capital 157 Note 10 Equity 158 Note 11 Receivables and liabilities 158 Note 12 Related parties 159 Note 13 Remuneration to auditors 159 Auditor’s report 160 Alternative Performance Measures 165 9696 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated comprehensive income statement million EUR (except numbers for EPS) Note 2022 2021 Operating income Net sales 5 1 050.4 748.2 Total operating income 1 050.4 748.2 Operating expenses Raw materials and consumables 19 -432.4 -304.9 Goods for resale 19 -136.1 -92.2 Other external costs 7, 8, 10 -229.9 -135.9 Personnel costs 6 -149.3 -116.2 Depreciation/amortisation and impairment tangible and intangible assets 12, 13 -47.2 -37.8 Share of income from associated companies 2.8 5.7 Capital gain/loss from sale of asset 9.7 1.0 Total operating expenses -982.5 -680.4 Operating income (EBIT) 68.0 67.8 Financial income 2.0 0.4 Financial expense -27.4 -19.2 Financial income and expense - net 9 -25.5 -18.8 Income before taxes 42.5 49.0 Income tax 11 -7.2 -14.6 Net income for the year 35.4 34.4 million EUR (except numbers for EPS) Note 2022 2021 Other comprehensive income: Items that may later be reclassified to profit and loss Exchange rate differences -2.2 4.1 Items that will not be reclassified to profit and loss Remeasurements of net pension obligations -4.2 4.0 Income tax pertinent to remeasurements of net pension obligations 0.8 -0.8 Other comprehensive income after tax -5.6 7.3 Total comprehensive income for the period 29.7 41.7 Net income for the year attributable to: Parent company shareholders 34.4 35.7 Non-controlling interest 0.9 -1.3 Total comprehensive income attributable to: Parent company shareholders 28.7 42.9 Non-controlling interest 1.0 -1.2 Earnings per share 24 Average number of shares: 164 109 723 153 336 017 Diluted average number of shares: 165 490 895 154 116 368 Earnings per share (EPS), basic (EUR) 0.21 0.23 Earnings per share (EPS), diluted (EUR) 0.21 0.23 Earnings per share (EPS), basic (NOK) 2.12 2.37 Earnings per share (EPS), diluted (NOK) 2.10 2.36 1 1 1 EPS in NOK is calculated using average rates for the period 9797 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statement of financial position million EUR Note 31 Dec 2022 31 Dec 2021 ASSETS Non-current assets Intangible assets Goodwill 262.8 113.0 Other intangible assets 135.2 80.3 Total intangible assets 12 398.0 193.3 Tangible assets Land and buildings 238.6 91.3 Plant and machinery 178.0 101.3 Equipment, tools, fixtures and fittings 28.2 12.4 Construction in progress and advance payments for property, plant and equipment 23.9 10.1 Total tangible assets 13 468.7 215.1 Financial assets Shares in associates 16 13.2 13.7 Net pension assets 2.6 6.7 Non-current receivables associates 0.1 4.2 Other non-current receivables 0.1 0.1 Other shares and participations 6.1 9.8 Total financial assets 22.1 34.5 Deferred tax assets 11 4.4 3.0 Total non-current assets 17 893.2 445.9 million EUR Note 31 Dec 2022 31 Dec 2021 Current assets Inventory Raw material and consumables 53.9 30.3 Work-in-progress 5.4 3.4 Finished goods and goods for resale 108.3 47.3 Total inventory 19 167.6 81.0 Current receivables Account receivables 18 156.7 98.8 Current tax asset 0.7 0.6 Other current receivables 14.2 11.9 Prepaid expenses and accrued income 20 12.5 5.0 Other financial assets 8.3 0.2 Cash and cash equivalents 21 47.5 142.3 Total current receivables 17 239.9 258.8 Total current assets 407.5 339.8 TOTAL ASSETS 1 300.7 785.7 9898 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statement of financial position million EUR Note 31 Dec 2022 31 Dec 2021 EQUITY AND LIABILITIES Equity Share capital 22 18.2 14.8 Additional paid-in capital 322.3 166.9 Reserves -15.3 -9.6 Accumulated profit or loss (including net profit for the year) 94.7 80.3 Equity attributable to parent company shareholders 419.8 252.4 Non-controlling interests 10.0 9.8 Total Equity 429.8 262.2 LIABILITIES Non-current liabilities Pensions and similar obligations to employees 26 1.3 1.4 Other provisions 27 0.4 0.9 Deferred tax liability 11 58.3 26.8 Non-current bond loan 25 246.9 246.1 Other non-current interest-bearing liabilities 25 238.2 75.9 Other financial non-current liabilities 17 0.7 4.3 Total non-current liabilities 17 545.7 355.4 million EUR Note 31 Dec 2022 31 Dec 2021 Current liabilities Other current interest-bearing liabilities 25 112.4 16.7 Other financial liabilities 0.4 0.2 Account payables 83.5 89.7 Current tax liabilities 16.4 8.0 Other current liabilities 15.1 13.2 Accrued expenses and deferred income 28 97.3 40.2 Total current liabilities 17 325.2 168.0 Total liabilities 870.9 523.4 TOTAL EQUITY AND LIABILITIES 1 300.7 785.7 Trondheim, Norway, 24 April 2023 The board of directors and CEO BEWI ASA Gunnar Syvertsen Chair of the Board Anne-Lise Aukner Director Rik Dobbelaere Director Andreas Akselsen Director Kristina Schauman Director Christian Bekken CEO 9999 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statement of changes in equity Additional Retained earnings Non-controlling Total million EUR Share capital paid-in capital Reserves (incl profit for the year) Total interest equity Opening balance as of 1 January 2022 14.8 166.9 -9.6 80.3 252.4 9.8 262.2 Net profit for the year - - - 34.4 34.4 0.9 35.4 Other comprehensive income - - -5.7 - -5.7 0.1 -5.6 Total comprehensive income - - -5.7 34.4 28.7 1.0 29.7 Transactions with owners, recognised directly in equity New share issue 3.4 155.5 - - 158.8 - 158.8 Transaction cost - -0.1 - - -0.1 - -0.1 Dividend - - - -20.8 -20.8 - -20.8 Acquisition non-controlling interest - - - 0.2 0.2 -0.8 -0.6 Share-based payments IFRS 2 - - - 0.6 0.6 - 0.6 Total transactions with shareholders, recognised directly in equity 3.4 155.4 - -20.1 138.6 -0.8 137.9 Closing balance as of 31 December 2022 18.2 322.3 -15.3 94.7 419.8 10.0 429.8 Opening balance as of 1 January 2021 14.0 151.9 -16.8 45.6 194.7 0.4 195.1 Net profit for the year - - - 35.7 35.7 -1.3 34.4 Other comprehensive income - - 7.2 - 7.2 0.1 7.3 Total comprehensive income - - 7.2 35.7 42.9 -1.2 41.7 Transactions with owners, recognised directly in equity New share issue 0.8 21.8 - - 22.7 - 22.7 Transaction cost - -0.7 - - -0.7 - -0.7 Dividend - -6.1 - -0.3 -6.4 - -6.4 Acquisition of non-controlling interest - - - -1.4 -1.4 10.5 9.2 Share-based payments IFRS 2 - - - 0.7 0.7 - 0.7 Total transactions with shareholders, recognised directly in equity 0.8 15.0 - -1.0 14.8 10.5 25.4 Closing balance as of 31 December 2021 14.8 166.9 -9.6 80.3 252.4 9.8 262.2 100100 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated cash flow statement million EUR Note 2022 2021 Operating cash flow Operating income (EBIT) 68.0 67.8 Adjustments for non-cash items, etc. 32 50.5 32.6 Interest paid and financing costs -19.3 -17.8 Interest received 2.8 0.4 Income tax paid -14.2 -8.7 Operating cash flow before changes to working capital 87.8 74.2 Cash flow from working capital changes Increase/decrease in inventories -20.4 -14.3 Increase/decrease in operating receivables 28.6 -28.2 Increase/decrease in inventories in operating debt -55.2 35.8 Total change to working capital -46.9 -6.8 Cash flow from operating activities 40.9 67.4 Cash flow from investment activities Purchase of property, plant and equipment and intangible assets 12, 13 -43.7 -34.7 Acquisitions of business 14 -230.9 -54.0 Acquisitions of associated companies 16 0.0 -1.1 Other financial investments 2.2 -0.5 Disposals of property, plant and equipment 13 85.0 0.5 Divestment of business 15 7.8 4.3 Cash flow from investment activities -179.7 -85.5 million EUR Note 2022 2021 Cash flow from financing activities Borrowings, net of transaction costs 25 85.0 248.2 New share issue, net of transaction costs 22 1.0 18.9 Repayment of borrowings 25 -18.3 -153.4 Dividend -20.8 -6.4 Cash flow from financing activities 46.9 107.3 Cash flow for the period -91.9 89.1 Opening cash and cash equivalents 142.3 51.4 Exchange difference in cash -2.9 1.8 Closing cash and cash equivalents 21 47.5 142.3 101101 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 The group Accounting principles and notes to the accounts Note 01 General information BEWI ASA (the parent company) and its subsidiaries (together, the group) produce, market and sell packaging, components and insulation solutions. The parent company conducts its business through subsidiaries in Sweden, Finland, Denmark, Norway, Iceland the Netherlands, Belgium, Portugal Spain, Poland, Germany, UK and through associated companies in Germany, France, Czech Republic, Lithuania, Canada and the UK. The parent company is a public limited company regis- tered in Norway, with head office located in Trondheim, Norway, and address Dyre Halses gate 1A, 7042 Trondheim. BEWI ASA’s registration number is 925 437 948. The board of directors approved these consolidated accounts on 24 April for publishing on 25 April 2023. Note 02 Summary of key accounting principles The key accounting principles applied in these consol- idated accounts are stated below. The principles have consistently been applied for all reported financial years, unless otherwise specified. All amounts are reported in million Euro, (million EUR), unless otherwise specified. The information in brackets concerns previous years. 2.1 Reasons for the method of preparation of the reports The consolidated accounts for the BEWI ASA group (“BEWI ASA”) have been prepared in accordance with the Norwegian Annual Accounts Act (norsk regnskapslov), and International Financial Reporting Standards (IFRS) as well as interpretations from the IFRS Interpretations Committee (IFRS IC), in the form they have been adopted by the EU. The accounts have been prepared using the cost value principle. Preparing reports compliant to IFRS requires certain estimates for accounting purposes to be made. It requires the executive management to make certain assessments when applying the group’s accounting principles. The complex areas, areas in which a high degree of assess- ments are required, or in which assumptions and estimates are significant to the consolidated accounts, are stated in note 4. No new IFRS standards or amendments to standards have been added in 2021 that have required changes in the accounting or measurement principles. CONSOLIDATED ACCOUNTS Basic accounting principles 2.2 Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Executive Committee is the chief operating decision-maker, responsible for assessing the financial position of the group and strategic deci- sion-making. The executive management has assessed the operating segments based on the information considered by the board of directors which is the basis of the alloca- tion of resources and assessment of performances. The group has identified four segments to be reported; RAW, Insulation, Packaging & Components and Circular. 102102 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Subsidiaries The subsidiaries are all companies over which the group exercises the controlling influence. The group controls a company when exposed to or entitled to variable return from its holdings in the company and carries the ability to influence the return through its control of the company. Subsidiaries are included in the consolidated accounts from the date on which the controlling influence is trans- ferred to the group. They are excluded from the date on which the controlling influence ceases to be. The acquisition method is applied for accounting for the group’s business combinations. The purchase considera- tion for the acquisition of a subsidiary is made up of the fair value of assets transferred, the group’s liabilities to prior equity holders of the acquired company, and the new shares issued by the group. The consideration also includes the fair value of all liabilities pertinent to a con- tingent considera-tion agreement. Identifiable acquired assets and assumed liabilities in a business combination are initially valued at fair value on the acquisition date. For each acquisition, i.e. on an acquisition-to-acquisition basis, the Group determines whether non-controlling interests in the acquired company is reported at fair value or at the proportional share of the reported value of the acquired company’s identifiable net assets. Expenses pertinent to an acquisition are carried as an expense as they arise. Each contingent consideration to be transferred by the group is reported at fair value on the acquisition date. Subsequent variations of the fair value of a contingent consideration are reported in accordance with IFRS 9 in the income statement. Goodwill is initially valued to the amount with which the total consideration and any fair value for the non-con- trolling interests on the acquisition date exceeds the fair value of the identifiable acquired net assets. Should the consideration be lower than the fair value of the acquired company’s net assets, the difference is reported in the income statement. Intra-group transactions, balance sheet items, revenue and expenses from intra-group transactions are eliminated. The accounting principles for the subsidiaries have, when applicable, been altered to guarantee a consistent applica- tion of the group’s principles. Associated companies Associated companies are companies over which the group has a significant but not controlling influence, which generally is relevant for holdings ranging from 20 per cent to 50 per cent of the votes. Holdings in associated compa- nies are reported using the equity method. The equity method entails initially reporting the holdings in associated companies at the acquisition cost on the consolidated balance sheet. The carrying amount is increased or decreased thereafter, in order to take into account the group’s share of the net profits and other comprehensive income from its associated companies after the acquisition date. The group’s share of the profit forms part of the consolidated net income and the group’s share of the comprehensive income forms part of the group’s comprehensive income. Dividends from associated companies are reported as a reduction to the investment’s carrying amount. Should the group’s share of the loss of an associated company be equal to or exceed the holdings in that associated company (including all long-term liabilities who are de facto part of the group’s net investment in the associated company), the group does not report any more losses, provided that the group has not incurred obligations or made payments on behalf of the associated company. Unrealised gains on transaction between the group and its associated companies are eliminated to the extent of the group’s holdings in associated companies. Unrealised losses are eliminated, provided that the transaction is not an indication of impairment of the asset being transferred. The accounting principles for associated companies have been adjusted when required in order to guarantee accordance with the group’s accounting principles. 2.3 Translation of currencies Functional currency and presentation currency The units of the group use their local currencies as functional currency as they have been defined as the currencies used in the primary economic environment in which the respective units mainly are active. In the consolidated accounts, Euro (EUR) is utilised, as the group’s presentation currency. Transactions and balance sheet items Transactions in foreign currency are translated to the functional currency using the exchange rates on the date of the transaction. Exchange rate gains and losses arising from payments of such transactions and from translations of monetary assets and liabilities in foreign currency at the rate on the balance sheet day, are reported in the operat- ing income section of the income statement. Exchange rate gains and losses arising from borrowings and cash and cash equivalents are reported in the income statement as financial incomes and expenses. Translation of foreign group companies Profits and financial positions for all group companies not using the presentation currency as functional currency are translated to the group’s presentation currency. Assets and liabilities for each balance sheet are translated from the foreign unit’s functional currency to the group’s presenta- tion currency, Euro, at the exchange rate on the balance sheet day. Revenue and expenses for each income state- ment is translated to Euro at the average rate at the time of each transaction. Translation differences arising from currency translation of foreign operations are reported in other comprehensive income. 2.4 Intangible assets Goodwill Goodwill arises when subsidiaries are acquired and repre- sent the amount with which the purchase consideration exceeds BEWiSynbra’s share of the fair value of identifiable assets, liabilities and contingent liabilities of the acquired company. In order to recognise impairment need, goodwill acquired in business combinations is allocated to cash generating units who are expected to be favoured by the synergies from the acquisition. Each unit or group of units to which goodwill has been allocated represents the lowest level in which the goodwill is monitored in the internal governance. Goodwill is monitored per cash generating unit. Goodwill is tested for impairment annually or more frequently should certain events or changes to conditions indicate a possible impairment need. The carrying value of goodwill is compared to the recoverable amount, which is the higher of fair value less costs of disposal and value in use. Any impairment is immediately reported as an expense and is not reversed. 103103 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Patents/ Licences/ IT Patents, licences & IT acquired separately are reported at the acquisition cost. Patents, licences & IT acquired through a business combination are reported at fair value on the acquisition date. IT mainly includes costs for the development of identifiable and unique software products controlled by the company. Patents, licences & IT carry a useful life and are reported at the acquisition cost less accumulated amortisation and impairment. Customer relations, trademark and technology These intangible assets have all been acquired through business combinations and are reported at fair value on the acquisition date. Customer relations and technology have a fixed useful life and are for subsequent periods reported at the acquisition cost less accumulated amor- tisation and impairment. The useful life of trademarks acquired through business combinations is evaluated and determined in each acquisition. Net cash flows generated by trademarks are not expected to cease in the foreseeable future. The trademarks in the groups balance sheet is therefore deemed to carry an indefinite useful life. Trademarks and goodwill are tested annually for impair- ment as described above. Trademarks are for subsequent periods reported at the acquisition cost less any write- down from impairment. Useful lives for the group’s intangible assets: Patents/Licences 5 yr. Customer relations 8–15 yr. Technology 6.5–10 yr. 2.5 Tangible assets Tangible assets are reported at the acquisition cost less accumulated depreciation and write-down from impairment. Expenses directly attributable to the acquisi- tion may be included in the acquisition cost. Incremental costs are either added to the asset’s carrying amount or reported as a separate asset, as appropriate. Assets are only added in the event that their future economic benefits will be of use to the group and that the acquisition cost can be reliably measured. The carrying amount of a replaced com- ponent is taken off the balance sheet. Other maintenance and reparations are reported as expenses in the income statement during the period in which they arise. Land is not depreciated. Depreciation of other assets is recognised on a straight-line basis over the useful life to the calculated residual value. Such depreciations are carried out accord- ing to the following: Buildings 10–65 yr. Frameworks, foundations 64–84 yr. Frame supplements, interior walls 50 yr. Heating, sanitary, electricity, front, roof 40 yr. Interior surface finish/rental preparation 10 yr. Ventilation 20 yr. Elevator/transportation 25 yr. Control system and surveillance 15 yr. Other property components 50 yr. Ground installations (facilities) 20 yr. Plant and machinery 5–18 yr. Equipment, tools, fixtures and fittings 3–10 yr. The assets’ residual value and useful life are assessed at the end of each reporting period and are adjusted when required. An asset’s carrying amount is immediately impaired to the recoverable amount when the carrying amount exceeds its recoverable amount. Gains and losses arising from a disposal of a tangible asset are determined through comparing the sale proceeds to the carrying amount. 2.6 Impairment of non-financial assets Intangible assets with an indefinite useful life are not amortised but are assessed annually to determine the impairment need. Depreciat-ed and amortised assets are assessed with respect to the impairment if events or changed conditions indicate that the carrying amount is not recoverable. Impairments are undertaken for the amount with which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is equal to the higher of the asset’s fair value less selling expenses and its value in use. Assets are grouped at the lowest level of separate identifiable cash flows (cash generating units), when assessing the impairment need. Assets previously impaired, other than goodwill, are assessed for reversal for each balance sheet day. 2.7 Inventory The inventory is reported at the lower of the acquisition cost and the realisable value. The acquisition cost is determined through the first-in-first-out method. The acquisition cost also includes expenses relating to the acquisition, as well as for bringing the goods to their current location and condition. The acquisition cost for the company’s semi-finished or finished products is the sum of the direct production costs and the production overhead (based on normal production capacity). 2.8 Financial instruments Financial instruments recur in several different balance sheet items and are described below. 2.8.1 Classification The group classifies its financial assets and liabilities in the following categories: Financial assets at fair value through profit and loss, financial assets measured at amortised cost, financial liabilities measured at fair value through profit and loss and financial liabilities measured at amortised cost. The classification is chosen in accordance with the purpose of obtaining the financial asset or liability. Financial assets at fair value through profit and loss Financial assets at fair value through profit and loss are shares and participations other than shares in subsidiaries, associates and joint ventures. The shares in KMC Properties ASA, listed on Oslo stock exchange are included in this category. Derivatives are recognised at fair value through profit and loss. Positive fair value changes in derivatives are reported as financial assets. Financial assets measured at amortised cost Financial assets measured at amortised cost are financial instruments where the business model is to collect cash flows. The contractual cash flows are solely payments of principal and interest and are valued at amortised cost in accordance with the effective interest meth-od. Accounts receivables are included in this category. Financial liabilities at fair value through profit and loss Financial liabilities at fair value through profit and loss are normally limited to derivatives and earnouts from business acquisitions. Financial liabilities measured at amortised cost Financial liabilities measured at amortised cost are all other financial instruments, such as the bond loans, liabilities to credit institutions, liabilities regarding financial leasing and account payables. 104104 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2.8.2 Reporting and valuation Financial assets are initially recognised at fair value plus transaction costs for all financial assets not at fair value through profit and loss. Financial assets at fair value through profit and loss are initially recognised at fair value and transaction costs are expensed in the income statement. Financial assets are recognised when the group becomes a party to the contractual provisions of the instrument. Regular purchases and sales of financial assets are recognised on the settlement date. Financial assets are removed from the balance sheet when the right to obtain cash flows from the instrument has expired and the group has transferred all essential risk and benefits in conjunction with the ownership. Financial liabilities are recognised when the group becomes bound to the contractual obli- gations of the instrument. Financial liabilities are removed from the balance sheet when the obligation under the agreement is completed or otherwise extin-guished. Loans and receivables and other financial liabilities are, after the acquisition date, reported at the amortised cost calculated using the effective interest method. 2.8.3 Offsetting financial instruments Financial assets and liabilities are offset and reported with a net amount on the balance sheet, only when there is a legal right to offset the carrying amounts and an intention to settle them with a net amount or to simultaneously realise the asset and settle the debt. 2.8.4 Impairments of financial instrument At each balance sheet date, financial assets measured at amortised cost are assessed for impairment based on Expected Credit Losses (ECL). ECLs are the difference between all contractual cash flows that are due in accordance with the contract and all the cash flows that the group expects to receive, discounted at the original effective interest rate. Allowances for trade receivables are always equal to lifetime ECL. 2.9 Account receivables Account receivables are financial instruments that include amounts payable by customers for operationally sold goods and services. They are classified as current assets when payment is expected within a year. Should payment be expected beyond that period, they are reported as non-current assets. Account receivables are initially reported at fair value, subsequently at amortised cost calculated using the effective interest method less any provisions for impairment. 2.10 Cash and cash equivalents Cash and cash equivalents include, on the balance sheet as well as in the cash flow statement, cash and bank balances. 2.11 Share capital Ordinary shares are classified as equity. Transaction costs directly attributable to the new issue of ordinary shares are reported in equity net after tax as a deduction from the proceeds from the issue. 2.12 Account payables Account payables are financial instruments in conjunction with obligations to pay for goods and services for opera- tions acquired from the suppliers. Account payables are reported as current liabilities when they mature within a year. Should they mature beyond that period, they are reported as long-term liabilities. Account payables are initially reported at fair value and subsequently at amor- tised cost using the effective interest method. 2.12 Borrowings Liabilities to credit institutions and liabilities to associated companies are initially reported at fair value, net after transaction costs. Borrowings are subsequently reported at amortised cost. Any difference between the obtained amount (net after transaction cost) and the repayment amount is reported in the income statement distributed over the loan period, using the effective interest method. Bank overdraft facilities are reported as liabilities to credit institutions in the current liabilities section of the balance sheet. 2.13 Provisions Provisions are reported when the group is legally or constructively obligated following prior events, wherever probable that an outflow of resources is required to clear the commitment and the amount is reliably calculated. Provided that similar commitments exist, the probability of an outflow of resources at the clearing to be required is assessed for the entire group of similar commitments. A provision is reported even in the event of low probability of an outflow regarding a particular item in the group of commitments. The provisions are reported at the present value of the amount expected to be required for fulfilling the obligation. A discount rate before tax is utilised hereby, reflecting the current market assessment of the time-dependent value of money and risks connected to the provision. The increase of provision pertinent to the passing of time is reported as an interest expense. 2.14 Current and deferred tax The period’s tax expenses include current and deferred tax. The current tax expense is calculated on the basis of the tax regulations in force on the balance sheet day in the countries in which the parent company and its subsidiaries are active and generate taxable revenue. Deferred tax is reported, in accordance with the balance sheet method, for all temporary differences between the written-down value of assets and liabilities and the carrying amount of the consolidated accounts. Deferred tax is calculated with the application of the tax rates in force on the balance sheet day and the rates expected to be in force when the tax asset is realised or the tax liability is cleared. De-ferred tax assets on carry forwards are reported to the extent likely that future fiscal surplus will be available, against which the deficits may be exploited. Deferred tax assets and liabilities are offset in the event of a legal right to offset for the tax referrals in question, the tax deferrals are attributable to taxes debited by one tax authority, apply to one or several tax subjects and there is an intention to clear the balances through net payments. 2.15 Employee remuneration Pension commitments The group has several post-employment benefit plans, including defined benefit plans, of which the majority of the pension schemes are defined contribution plans. A defined contribution plan is a pension plan according to which the group pays a fixed fee to a separate legal entity. The group carries no legal or constructive obligations to pay additional fees should the entity lack sufficient resources to remunerate all employees what they are due as a result of their service, in the current or prior periods. The fee is reported as a personnel cost when matured. A defined benefit plan is a pension plan without defined contribution. Defined benefit plans normally set out an amount for the employee to receive upon retirement, nor-mally based on one or several factors such as age, period of service and salary. The group provides defined benefit plans for a limited number of people, in Finland, in the UK, and in Norway. These plans are further described in note 26. In addition, the group provides other long-term 105105 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 benefits in the Netherlands for long-term service (Jubilee fund), calculated in the same manner as a defined benefit plan. The liability reported on the balance sheet in conjunction with the defined benefit pension plan is the present value of the defined benefit commitment at the end of the reporting period less the plan assets’ fair value. The defined benefit pension commitment is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit liability is determined through discounting future estimated cash flows using the interest rate for investment grade corpo-rate bonds or housing bonds issued in the same currency as the benefits, with terms comparable to the pension commitment in question. The net interest is calculated by applying discounted interest charges to defined benefit plans and for the fair value of the plan assets. The current service cost is included in the personnel costs and the net interest among financial items. Revaluation gains and losses as a result of adjustments in accordance with experience and changes to actuarial estimates are reported in other comprehensive income for the period during which they arise. They are part of the profit carried forward in the changes to consolidated equity and the balance sheet. Costs for service in prior periods are reported in the income statement. Compensation at termination of employment Compensation at termination of employment is due when an employee’s employment is terminated by the group before the normal time of retirement or when an employee accepts voluntary withdrawal in exchange for such compensation. The group reports compensations at termination at the first of these points of time: a) when the group no longer has the option to withdraw the com- pensation offer and; and b) when the company reports expenses for a restructuring within the scope of IAS 37 and implies payments of severance. Compensa-tions at termi- nation are calculated based on the number of employees expected to accept the offer encouraging voluntary withdrawal, in the event that such an offer has been made. Benefits maturing more than 12 months after the end of the reporting period are discounted at present value. Share based payments In 2020, the parent company BEWI ASA implemented a share-based incentive programme, entitling the par- ticipants to subscribe for shares in BEWI ASA during a three-year period. The fair value of the share options issued is determined at the grant date in accordance with the Black & Scholes valuation model, tak-ing into consideration the terms and conditions that are related to the share price. The value is recognised in the income statement as a personnel cost allocated over the vesting period with a corresponding increase in equity. The recognised cost corresponds to the fair value of the estimated number of share options that are expected to vest. This cost is ad-justed in subsequent periods to reflect the actual number of vested options and shares. 2.16 Revenue recognition The group follows a five-step model for recognising income that is based on when control of a good or service is passed to the customer. The core principle is that an entity is to recognise revenue to depict the transfer of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The five-step model comprises the following steps: Step 1: Identify the contract with the customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price and Step 5: Recognise revenue – over time or point in time. As to Step 5, revenue is recognised when a company has satisfied a performance obligation, which is when control of the underlying goods or services has been passed to the customer. The amount recognised as revenue corresponds to the amount allocated to the satis-fied performance obligations. A performance obligation can be satisfied over time or at a point in time. Revenue is recognised over time if the customer simultaneously receives and consumes all of the benefits provided by the company as the company performs; the company’s performance creates or enhances an asset that the customer controls; or the company’s performance does not create an asset with an alternative use to the company and the company has an enforceable right to payment for performance completed to date. If a perfor-mance obligation does not meet one of these criteria to be recognised over time, revenue is recognised at one specific point in time. This takes place when control of a good or service is passed to the customer. Factors that may indicate the point in time at which control passes include: the company has transferred physical possession of the asset; the company has a present right to payment for the asset; the customer has accepted the good or service; the customer has the significant risks and rewards related to the ownership of the asset; and the customer has legal title to the asset. BEWI sells products for insulation for the construction industry as well as packaging solutions for the manufactur- ing industry and food producers. Virtually all of these sales transactions meet the definition of a point in time revenue recognition. The sales are reported as revenue when a group company has delivered the product to a customer. Delivery is deemed to have taken place when the products have arrived at the indicated location, as defined by the shipment terms. 2.17 Interest revenue Interest revenue is reported using the effective interest method. 2.18 Leases According to IFRS 16 a lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability rep-resenting its obligation to make lease payments. Each lease payment is apportioned to interest and amor- tisation of the lease liability. The interest is recognised as a financial expense in income statement, apportioned over the lease term so that each period is charged with an amount reflecting a fixed interest rate on the underlying lease liability. The right-of-use asset is measured at cost, which reflects the value of the lease liability, plus any initial direct expenditure, plus obligations for disassembly, removal or recovery at the end of the lease. In general, the right-of-use asset is depreciated on a straight-line basis over the term of the lease or, given an option to extend, the period during the lessee expects to use the asset. The group has decided to apply the practical expedients for short-term leases and low-value assets. This means that contracts with shorter maturities than 12 months and leases of low value (value of assets when it is new of less than EUR 5000) are not included in the calculation of less than EUR 5 000) are not included in the calculation of right-of-use assets or leasing liabilities but continue to be reported with straight-line expense over the lease term. 106106 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Examples of low value assets are computers, printers and copiers. Lease liabilities are initially measured at the present value of future lease payments. Lease payments are discounted by the lease’s implicit interest rate, if the implicit interest rate can be easily determined, but the typical method is for the group to use the incremental borrowing rate. Future lease payments calculated at present value consist of fixed payments. Lease liabilities that fall due within 12 months are classified as current liabilities and liabilities that fall due after 12 months as non-current liabilities. Upon determin- ing the term for a lease, extension options are taken into account if it is likely that they will be exercised. 2.19 Government grants Government grants are recognised when there is a reason- able assurance that the grants will be received and that the Company will comply with the conditions attached to them. Government grants are recognised in profit or loss on a systematic basis over the periods in which the related expenses, which the grants are intended to compensate for, are recognised. Government grants are recognised as a reduction of such related expenses. Government grants received for investments are recognised in the balance sheet as a reduction of the booked value of the asset. 2.20 Dividends Dividends to the parent company’s shareholders are reported as liabilities in the consolidated financial reports for the period in which the dividends have been approved by the parent company’s shareholders. 2.21 Cash flow statement Cash flow statement is prepared using the indirect method. The reported cash flow solely contains transac- tions giving rise to payments. Note 03 Financial risk management 3.1 Financial risk factors The group is through its activities exposed to several different risks: market risks (currency risk, interest rate risk and price risk), credit risk and liquidity risk. The group’s comprehensive financial risk management is focused on the unpredictability of the financial markets and strives to minimise any adverse effect on the consolidated profits. The use of derivative financial instruments has so far been limited to mitigation of currency exposure on intra-group borrowing and lending. The risk management is controlled by the central finance department and the treasury function within that department. The finance department identifies, evaluates and hedges financial risks in close cooperation with the group’s operative units. Currency risk The group operates in the Nordic countries, in continental Europe, in the UK and in North America and is mainly exposed to currency risk arising from currency exposure to the Swedish Krona (SEK), the Danish Krona (DKK) and the Norwegian Krona (NOK). Currency risks arise from both transaction exposure and translation exposure. Transaction exposure should, when possible, be centralised and managed by the group’s central treasury function. Transaction exposure Transaction exposure arises when revenues and costs are incurred in different currencies and exposes the group to changes in net cash flow due to fluctuations in exchange rates. This is applicable to both operational cash flows and to finan- cial commitments that will end in a cash outflow. Transaction exposure also arises on fair value changes on existing balance sheet items in foreign currency, such as trade receivables and liabilities and borrowing and lending, when these items are revalued on the balance sheet date or when settled. The largest transaction exposure to operational cash flows is attributable to raw material purchases in Sweden and Norway, which are done in EUR. As DKK is pegged to the EUR, Denmark is not subject to that same exposure. In addition, there is also a minor exposure between other currency pairs where sales or purchases are concluded in foreign currencies. The largest fair value exposure on the balance sheet is related to intra-group loans, mainly EUR denominated, from Sweden to its subsidi- aries. However, the main sources of funding for the group, the bond loan and the overdraft facility, are denominated in EUR to match the intragroup loans to subsidiaries predominately located in the Euro area. The following measures are taken by BEWI to reduce the transaction exposure: • For raw material purchases from the Euro area into the Nordics, price and currency clauses are in general incorporated into customer agreements. • Intra-group trade receivables and liabilities should be settled within a limited time-frame. • The group’s external borrowing should be matched to the currency of intra-group lending to subsidiaries. • Bank balances in foreign currency should be exchanged to local currency as soon as possible . Transaction exposure to operational cash flows are only to a limited extent hedged by using derivatives. However, to the extent that there is a major net exposure in any currency from borrowing and lending, that balance sheet 107107 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 exposure should be hedged by using forward contracts or swaps. Net balance sheet exposure has been managed by a combination short-term derivatives and long-term derivatives, depending on the nature of the exposure. The net fair value of derivate contracts used for hedging transaction exposure, as of 31 December, is presented in the table below. All short-term derivatives in the table below mature within 6 months. million EUR 0-6 months 7-12 months 3-4 yr. 4-5 yr. As of 31 Dec 2022 Derivative asset 0.6 0.0 7.7 - Derivative liability -0.4 - - - Total 0.2 0.0 7.7 - As of 31 Dec 2021 Derivative asset 0.2 - - - Derivative liability -0.2 - -0.2 -0.3 Total -0.0 - -0.2 -0.3 Translation exposure Translation exposure arises when the income statements and balance sheets of foreign operations are translated to EUR, the presentation currency of the group’s financial statements. The reported net sales and profit of the group, as well as the net assets of the group, are consequently exposed to changes in exchange rates between EUR and the currencies of the group’s foreign operations. The translation exposure is not hedged, but the group strives to have a balance in major currencies between net debt, equity and EBITDA to reduce volatility in the balance sheet and key financial ratios. A sensitivity analysis shows that if EUR would have fluctu- ated by 5 per cent against all other currencies in the group, the impact on adjusted EBITDA would have been +/- EUR 1.3 million in 2022 (EUR 1.1 million). This assumes that all other variables are held constant and ignores any compen- sating effects from transaction exposure, for example the impact from raw material purchases. Interest rate risk Interest rate risk is the risk that changes in market interest rates will have a negative impact on cash flow or fair value of financial assets and liabilities. Cash flow risk arises from changes in variable interest rates, whereas fair value risk arises from changes in fixed interest rates. It is the policy of the group to limit the interest rate risk to cash flow risk by restricting the allowed average interest duration for both borrowing and financial investments. The group’s borrowing is primarily exposed to changes in Euribor through the bond loan, and short term interest rates in SEk and NOK, as further outlined in Note 25 Borrowings. The group’s lending, limited to loans to associated companies, is exposed to changes in Euribor, as described in Note 16 Investments in associated companies. In the event that the interest rate would fluctuate up or down by 50 basis points, all other variables held constant, the impact on net profit would have been +/- EUR 1.2 million in 2022 (EUR 0.8 million). Price risk The group is exposed to price risks in relation to share- holdings other than shares held in group companies or associated companies. Such other shareholdings are valued at fair value. The exposure is mainly related to shares in KMC Properties ASA, a company listed on Oslo Børs. These shares were part of the consideration received in the sale and leaseback transaction in the Netherlands in 2020. The corporate bonds are listed on Nasdaq Stockholm, and the group is therefore exposed to fluctu- ations of the market value if the repurchase clause in the bond agreement would be utilised. Credit risk Credit risk refers to the risk that a counterparty in a finan- cial transaction may not fulfil its obligations. It is a risk applicable to trade receivables, lending and to cash and cash equivalents. Credit risks are managed by the central treasury function, except for credit risks related to accounts receivables, which are managed locally by the subsidiaries or business units. Each subsidiary or business unit shall monitor and analyse the credit risks for each new customer before standard terms for payment and delivery are offered. If customers are credit rated by independent credit rating agencies, these credit ratings are utilised. In the event that no independent credit rating exists, the group company undertakes a risk assessment of the customer’s credit- worthiness, in which the customer’s financial position is considered, as well as previous experience and other factors. Individual risk limits are determined on the basis of internal or external credit ratings. The application of credit limits is monitored regularly. The credit-term is normally 30 days, but both shorter and longer terms are applied, depending on the customer and local practices. A breakdown of maturity for accounts receivables, as well as description of the principles for estimating credit losses, are presented in note 18 Accounts receivables. To minimise the credit risk for cash and cash equivalents, only banks and financial institutions with strong credit rating from independent credit rating agencies are accepted. The maximum credit risk exposure corresponds to the financial assets presented in note 17 Financial instruments per category. Liquidity risk Liquidity risk is the risk that the group does not have access to adequate financing on acceptable terms at any given point in time. This requires a combination of short-term monitoring of cash flow and securing short and long-term financing of the group. Cash flow forecasts are prepared by the group’s operating companies and are closely monitored by the treasury department. The group should always have a sufficient liquidity reserve to meet the short-term operating needs. In order to balance seasonal effects in operating cash flow, and managing other short term funding needs mainly related to change in working capital, the group has secured an revolving credit facility (RCF). The facility was originally EUR 80 million and in 2022 an accordion option for an increase of 20 million was exercised and the RCF was increased with additional 50 million to a total of EUR 150 million. The facility is now provided by two banks and runs until 2024 and includes the option to extend the facility further in time. Part of the total RCF frame has been utilized for an overdraft facility provided by one of the banks For the long-term financing of the group, BEWI has out- standing issued a EUR 250 million five year sustainability linked bond that matures on 3 September 2026, with a possibility for BEWI to unilaterally decide on an early redemption after 3 March 2025 of 50 per cent of the bonds 108108 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 outstanding at that date. A detailed description of the terms for the bond loans is given in note 24 Borrowings. In addition to the centrally negotiated borrowings, there are also a few liabilities to credit institutions and overdraft facilities in companies acquired, that have not been subject refinancing post acquisition. The major part is derived from the acquisition of Jackon Holding AS which has utilized facilities in the amount of EUR 90.8 million as per 31 December 2022. The amounts in the table below are the agreed, undis- counted cash flows. As of 31 Dec 2022 million EUR <1 yr. 1–2 yr. 2–5 yr. >5 yr. Bond loans - - 250.0 - Liabilities to credit institutions 69.5 82.3 4.9 0.6 Overdraft 22.7 - - - Accounts payables 83.5 - - - Liabilities leases 25.0 24.0 62.2 124.4 Total 200.8 106.2 317.1 125.0 As of 31 Dec 2021 million EUR <1 yr. 1–2 yr. 2–5 yr. >5 yr. Bond loans - - 250.0 - Liabilities to credit institutions 3.0 2.7 7.1 - Overdraft 0.8 - - - Accounts payables 89.7 - - - Liabilities leases 14.8 13.3 33.5 40.9 Total 108.3 16.0 290.6 40.9 The undiscounted cash flow for liabilities leases correspond to the future lease payments reflected in the calculation of the discounted lease liability in accordance with IFRS 16. 3.2 Fair value The table below presents the fair value of financial instruments measured at fair value though profit and loss, or, which is the case with the bond loans, fair value of financial instruments measured at amortised cost. The carrying amount of the group’s other financial assets and liabilities is considered to constitute a good approximation of fair value, since they carry floating interest rates or are of a current nature. As of 31 Dec 2022 Carrying amountmillion EUR Level 1 Level 2 Level 3 Total Financial assets measured at fair value through profit and loss Participation in other companies 5.5 - 0.5 6.0 6.0 Derivative asset - 8.3 - 8.3 8.3 Total 5.5 8.3 0.5 14.3 14.3 Financial liabilities measured at amortised cost Bond loan 240.6 - - 240.6 246.9 Total 240.6 - - 240.6 246.9 Financial liabilities measured at fair value through profit and loss Derivative liability 0.4 - - 0.4 0.4 Other financial non-current liabilities - - 0.7 0.7 0.7 Total 0.4 - 0.7 1.1 1.1 109109 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 As of 31 Dec 2021 Carrying amountmillion EUR Level 1 Level 2 Level 3 Total Financial assets measured at fair value through profit and loss Participation in other companies 9.2 - 0.6 9.8 9.8 Derivative asset - 0.2 - 0.2 0.2 Total 9.2 0.2 0.6 10.0 10.0 Financial liabilities measured at amortised cost Bond loan 252.5 - - 252.5 246.1 Total 252.5 - - 252.5 246.1 Financial liabilities measured at fair value through profit and loss Derivative liability - 0.7 - 0.7 0.7 Other financial non-current liabilities - 3.8 3.8 3.8 Total - 0.7 3.8 4.5 4.5 Level 1 – Listed prices (unadjusted) on an active market for identical assets and liabilities. Level 2 – Other observable data for the asset or liability that is listed prices included at level 1, either directly (as price) or indirectly (derived from price). Level 3 – Data for the asset or liability that is not based observable market data. Level 3 – Changes during the period, million EUR Participation in other companies Other financial non-current liabilities As of 31 Dec 2021 0.6 3.8 Acquisitions - 0.7 Use of option to acquire BEWI Cellpack A/S - -6.7 Fair value adjustment through profit and loss -0.1 2.9 As of 31 Dec 2022 0.5 0.7 Level 3 – Changes during the period, million EUR Participation in other companies Other financial non-current liabilities As of 31 Dec 2020 0.3 - Acquisitions 0.5 3.8 Fair value adjustment through profit and loss -0.2 - As of 31 Dec 2021 0.6 3.8 Other financial non-current liabilities of EUR 3.8 million corresponds to the estimated value of the option to acquire non- controlling interest in BEWI Cellpack A/S (former Honeycomb Cellpack A/S), as further outlined in note 14. 110110 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 3.3 Capital management The group’s capital is defined as capital employed, which comprises total equity and net debt. The objective for the capital structure is to guarantee the group’s capacity to continue its operations and to support a profitable growth through a combi- nation of M&A activities and organic growth, with the aim to continue generating return to shareholders and benefits to other stakeholders. This should be achieved through an optimal capital structure that reduces the cost of capital. In order to maintain or adjust the capital structure, the group may: alter the dividend to shareholders, reimburse capital to shareholders, issue new shares, raise new loans or dispose of assets. The capital is assessed on the basis of the return on capital employed. Net debt is defined as interest-bearing liabilities less cash and cash equivalents. Net debt is calculated both with and without the effect from IFRS 16 Leases, as the covenants stated in the revolving credit facility agreement and the bond loan agreement are based on a net debt calculation excluding the effect of IFRS 16. For the sake of calculating capital employed, net debt includes the effect of IFRS 16. For more information on the components of interest-bearing liabilities, please refer to note 25. Return on capital employed is calculated as rolling 12 months adjusted EBITA (earnings before interest, tax and amortisations after adding back items affecting comparability) as a percentage of average capital employed during the same period, where the average is calculated with each quarter during the measurement period as a measuring point. million EUR 31 Dec 2022 31 Dec 2021 Total interest-bearing liabilities (A) 598.2 338.7 Cash and cash equivalents (B) 47.5 142.3 Net debt including IFRS 16 (A-B) 550.7 196.4 Effect of IFRS 16 leasing liabilities (C) 168.4 76.1 Net debt excluding IFRS 16 (A-B-C) 382.3 120.3 Total equity (D) 429.8 262.2 Capital employed (A-B+D) 980.5 382.5 Average capital employed (E) 629.1 409.6 Adjusted EBITA (F) 96.1 78.8 Return on capital employed (F/E) 15.3% 19.2% The increase in net debt from 2021 to 2022 is mainly attributable to the business acquisitions during the year. The increase in capital employed from 2021 to 2022 was further impacted by the increase in equity, to a large extent attributable to the profit for the year and the new shares issues. Return on capital employed decreased from 2021 to 2022, mainly explained by the fact that business acquisitions have only contributed to the consolidated EBITA after the acquisition date, whereas the full effect on capital employed from the acquisitions is recognised immediately. 111111 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 04 Critical accounting estimates and assessments Estimates and assessments are continuously evaluated and are prepared on the basis of historical experience and other factors, including expectations regarding future events deemed reasonable under existing condition. 4.1 Critical accounting estimates and assessments The group makes estimates and assumptions about the future. Accounting estimates will, by definition, rarely be equivalent to the actual result. The estimates and assump- tions contain a significant risk for material adjustments to carrying amounts of assets and liabilities during the following financial years are outlined below. (a) Inventory obsolescence The inventory is valued at the acquisition cost, in accord- ance with the first-in-first-out method. The acquisition costs for the company’s semi-finished or finished products are generally calculated as the sum of raw material carried forward, other direct production costs and a reasonable production overhead (based on normal production capac- ity). When assessing whether obsolescence of the goods should be calculated during the manufacturing process or when the goods is finished, the executive management has concluded that no obsolescence is in question for the company’s products, seeing as they are standard products with a high turnover rate, products only manufactured following a customer order and that any defect goods may be restored to raw material and thereby be reused. The carrying amount for the inventory amounts to EUR 167.6 million as of 31 December 2022 (81.0). (b) Consideration of impairment need of goodwill and trademarks The group examines annually whether any impairment need for goodwill or trademarks is at hand, in accord- ance with the accounting principle set out in note 2. Recoverable amounts have been determined on the basis of calculations of values in use. These calculations include certain estimates to be carried out (see note 12 Intangible assets). (c) Pension benefits The present value of the pension commitment is pertinent to several factors determined on an actuarial basis using a number of assumptions. The assumptions utilised to deter- mine the net cost (revenue) for pension benefits include the discount rate. Each change to these assumptions will affect the pension commitments’ carrying amounts. The group stipulates the appropriate discount rate at the end of each year. This will be the rate utilised for determining the present value of assessed future payments expected to be required in order to clear the pension commitment. When determining the appropriate discount rate, the group considers the rates of the investment grade corpo- rate bonds issued in the same currency as the benefits, with terms comparable to the pension commitment in question. Other critical assumptions with regard to the pension commitment are in part based on existing market conditions. Additional information is given in note 26. Note 05 Net sales distribution and segment information Operating segments are reported in a manner that corresponds with the internal reporting submitted to the chief operating decision maker. The Executive Committee constitutes the chief operating decision maker for the BEWI group and takes strategic decisions in addition to evaluat- ing the group´s financial position and earnings. Group management has determined the operating segments based on the information that is reviewed by the Executive Committee and used for the purposes of allocating resources and assessing performance. The Executive Committee assesses the operations based on four operating segments: RAW, Insulation, Packaging & Components and Circular. Sales between segments take place on market terms. million EUR 2022 2021 RAW Segment revenue 418.0 347.9 Intra-group revenue -142.0 -104.6 Revenue from external customers 276.0 243.3 Insulation Segment revenue 333.9 195.4 Intra-group revenue -4.0 -2.8 Revenue from external customers 329.9 192.7 Packaging & Components Segment revenue 391.9 295.6 Intra-group revenue -10.0 -6.9 Revenue from external customers 381.9 288.7 Circular Segment revenue 63.1 24.0 Intra-group revenue -0.7 -0.6 Revenue from external customers 62.4 23.4 112112 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 million EUR 2022 2021 Unallocated Segment revenue 0.3 0.1 Intra-group revenue 0.0 0.0 Revenue from external customers 0.3 0.1 Total Total segment revenue 1 207.3 863.1 Total intra-group revenue -156.8 -114.9 Total revenue from external customers 1 050.4 748.2 Adjusted EBITDA 1 RAW 57.0 54.1 Insulation 31.1 21.6 Packaging & Components 48.3 40.3 Circular 2.5 0.6 Unallocated -5.4 -7.6 Total adjusted EBITDA 133.6 109.0 EBITDA RAW 40.0 54.2 Insulation 33.6 22.5 Packaging & Components 53.3 39.9 Circular 2.6 0.3 Unallocated -14.2 -11.4 Total EBITDA 115.2 105.5 million EUR 2022 2021 EBITA RAW 35.7 50.0 Insulation 22.3 14.6 Packaging & Components 33.6 23.3 Circular 0.9 -0.7 Unallocated -14.8 -11.8 Total EBITA 77.7 75.4 EBIT RAW 35.3 49.6 Insulation 19.4 12.6 Packaging & Components 28.8 18.8 Circular 0.3 -0.7 Unallocated -15.8 -12.6 Total EBIT 68.0 67.8 Net financial items -25.5 -18.8 Income before tax 42.5 49.0 1 Normalised earnings before interest, tax, depreciation and amortisations (i.e. items affecting comparability and deviations are added back). Adjusted EBITDA is a key performance indicator that the group considers relevant for understanding earnings adjusted for items that affect comparability. For more information see section “Alternative performance measures not defined by IFRS”. 113113 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Specification of impact from specific amounts on the segmentation 2022 2021 Share of income from associated companies Adjusted EBITDA, EBITDA, EBITA and EBIT for Insulation 2.6 4.7 Adjusted EBITDA, EBITDA, EBITA and EBIT for Packaging & Components 0.1 0.0 Adjusted EBITDA, EBITDA, EBITA and EBIT for Circular 0.1 0.0 Capital gain/loss from sale of assets EBITDA, EBITA and EBIT for Insulation 3.1 0.9 EBITDA, EBITA and EBIT for Packaging & Components 5.2 0.0 EBITDA, EBITA and EBIT for RAW 0.1 0.1 EBITDA, EBITA and EBIT for Circular 1.2 -0.1 EBITDA, EBITA and EBIT for Unallocated - 0.0 Impairment tangible assets EBITA and EBIT for Insulation -0.3 - EBITA and EBIT for Packaging & Components - -0.8 EBITA and EBIT for RAW -0.6 -0.2 EBITA and EBIT for Circular 0.0 0.0 Impairment other intangible assets except goodwill EBIT for Insulation 0.0 - EBIT for Packaging & Components -0.1 - Net sales per country External segment revenue by country (selling company’s sales) 2022 2021 RAW Total Finland 51.2 125.8 Total Netherlands 219.2 117.5 Total Germany 5.5 - Total RAW 276.0 243.3 Packaging & Components and Insulation Total Finland 30.0 21.3 Total Sweden 65.3 57.1 Total Denmark 83.5 70.3 Total Norway 213.3 164.9 Total Netherlands & Belgium 185.2 129.8 Total Germany, Switzerland & France 39.9 6.6 Total United Kingdom 37.0 - Total Portugal & Spain 25.4 21.8 Total Polen 23.6 9.6 Total Lithuania 8.7 - Total P&C and Insulation 711.8 481.4 Circular Total Belgium 2.8 2.6 Total Sweden 8.1 6.3 Total Denmark 2.2 2.2 Total Norway 0.0 0.1 Total Netherlands 5.2 3.4 Total Portugal 10.0 6.6 Total United Kingdom 20.4 2.2 Total USA & Canada 13.6 - Total Circular 62.4 23.4 Total Unallocated 0.3 0.1 Total Group 1 050.4 748.2 114114 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Net sales per country (Customers’ geography) 2022 2021 Total Finland 54.2 34.0 Total Sweden 73.8 62.2 Total Denmark 73.2 61.9 Total Norway 193.0 154.1 Total Portugal & Spain 73.6 45.0 Total Iceland 25.2 22.0 Total Baltics 33.1 14.3 Total UK 57.6 20.2 Total Germany 101.0 58.0 Total Poland 44.8 39.0 Total Russia 14.0 29.2 Total Netherlands 154.3 117.3 Total Belgium 38.6 13.6 Total France 36.1 28.4 Total Other 77.9 49.2 Total Group 1 050.4 748.2 Note 06 Employee remuneration etc. million EUR 2022 2021 Salary and other remuneration -108.4 -82.5 Social security expenses -14.9 -12.5 Pension costs – defined contribution plans -8.3 -8.0 Pension costs – defined benefit plans -0.1 -0.1 Total remunerations to employees -131.7 -103.1 The costs in the table above reflects costs for own employees. Average number of employees with geographical breakdown by country 2022 2021 Average number of employees Whereof men Average number of employees Whereof men Sweden 232 163 199 137 Finland 166 135 154 126 Denmark 258 169 287 187 Norway 285 207 237 180 Island 14 11 14 11 Netherlands 486 425 329 297 Belgium 88 81 16 15 Portugal 203 119 208 124 Spain 5 4 5 4 Poland 264 172 136 87 Germany 227 165 73 49 UK 99 70 4 2 France 2 2 - - Lithuania 37 30 - - Canada 6 1 - - The Group in total 2 372 1 754 1 662 1 219 115115 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Remuneration to senior executives The senior executives comprise of the board of directors, CEO of BEWI ASA and managers in the executive management 1 directly reporting to the CEO and remunerations for those applies to: BEWI ASA 1 Jan 2022–31 Dec 2022 1 Jan 2021–31 Dec 2021 million EUR Basic salary incl. benefits/ board fees Variable remuneration Retirement compensation Basic salary incl. benefits/ board fees Variable remuneration Retirement compensation Board of Directors 5 members of the board, whereof 2 women Gunnar Syvertsen (chairman) 0.06 - - 0.07 - - Stig Waernes 2 0.03 - - 0.02 - - Christina Schauman 0.04 - - 0.05 - - Ann-Lise Aukner 0.03 - - 0.04 - - Rik Dobbeleare 0.03 - - 0.02 - - Andreas Mjølner Akselsen 0.00 - - - - - Total 0.18 - - 0.19 - - CEO Christian Bekken 0.27 0.09 0.01 0.24 0.09 0.00 Other Senior Executives 3 0.74 0.26 0.19 0.55 0.24 0.16 Total 1.01 0.35 0.20 0.79 0.33 0.16 Consultancy services board members Gunnar Syvertsen 0.10 - - 0.10 - - Andreas Mjølner Akselsen 0.00 - - - - - Rik Dobbeleare 0.06 - - - - - 1 The Executive management has been extended with three new employees as from 1 October 2022. They are included in the numbers above from this date. 2 Stig Wærnes left the board upon completion of the Jackon transaction 19 October 2022, and was replaced by Andreas M. Akselsen. 3 EUR 0.2 million of the remuneration to other executives in 2022 was recharged to KMC Properties ASA, a company related to the Bekken family, for services rendered on behalf of that company. Share-based incentive programme In November 2020, the parent company BEWI ASA implemented a share-based incentive programme, entitling the participants to subscribe for shares in BEWI ASA during a three-year period. The purpose of the programme is to further align the interests of the company and its shareholders by providing incentives in the form of awards to employees to motivate them to contribute materially to the success and profitability of the company. The features of the programme are further described in note 23. The CEO of BEWi ASA and other senior executives, at the time of grant date, were granted 25000ed 250 000 share options each. The three persons added to the excecutive management in 2022 were granted 125 000 share options each at grant date in 2020. Severance pay Subject to the CEO’s employment agreement, there is a notice period of 12 months if the agreement is terminated by the company and a notice period of 6 months if the agreement is terminated by the employee. The employee is entitled to receive unchanged salary and other fringe benefits during the period of notice, however the salary is deductible to other income. 116116 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 07 Remunerations to auditors million EUR 2022 2021 PwC – The audit assignment -0.6 -0.7 – Audit activities other than the audit assignment 0.0 -0.1 – Tax advice - 0.0 – Other services -0.7 -0.1 Total -1.4 -0.9 Other accounting firms than PwC – The audit assignment -0.2 -0.1 – Audit activities other than the audit assignment -0.2 - – Tax advice 0.0 - – Other services -0.2 - Total -0.7 -0.1 For 2021 and 2022 audit activities other than the audit assignment from PwC and other services mainly includes costs related to the Jackon transaction. Note 08 Leasing Lease-terms and purchase options The group leases buildings (e.g. production facilities, warehouses, offices), machinery (e.g. gas facilities, compressors, moulding machines) and equipment (e.g. cars, trucks, fork-lifts). Contracts for production facilities normally run for 10-12 years, but there are exceptions with both shorter and longer lease terms. Separate warehouses are normally leased for 1–2 years, with a few exceptions. In case a warehouse rent is paid based on usage, for example pallet space used, it is treated as variable and not subject to capitalisation in accordance with IFRS 16. Office space is normally leased for three years. Based on the assumption that a business cycle lasts for eight years and that predictions beyond that period are difficult, extension options for contracts for production facilities expiring after that time-frame are not considered when assessing the lease-term, unless specific condi- tions are present. Extension options for warehouses and offices are not reflected. The lease term for other assets vary, but normally range between 3–5 years. Purchase options are considered in the capitalised amount if deemed reasonably certain that such an option will be exercised, but this is not common. Extensions options are reflected when it is deemed reasonable that they will be exercised. Discount rate, liability and carrying amount Discount rates applied and total leasing liability are described in note 25 Borrowings. Maturity dates for the undiscounted values are presented in note 3 Financial risk management. Carrying amounts and depreciations of the assets capitalised are presented in note 12 Intangible assets and note 13 Tangible assets. Lease expenses for lease contracts capitalised in accordance with IFRS 16 million EUR 2022 2021 Depreciations and amortisations -13.1 -11.3 Interest expense -6.1 -4.9 Total -19.2 -16.2 117117 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Lease expenses for lease contracts not capitalised in accordance with IFRS 16 million EUR 2022 2021 Lease expense short-term leases -0.3 -0.4 Lease expense low-value assets -0.4 -0.5 Lease expense variable leases -0.9 -0.3 Total -1.5 -1.2 Cash flow from leases million EUR 2022 2021 Recognised in operating cash flow Operating income -1.5 -1.2 Interest paid -6.1 -4.9 Cash flow from financing activities Repayment of borrowings -11.7 -11.3 Total -19.3 -17.4 Note 09 Financial income and expense million EUR 2022 2021 Interest revenue 1.8 0.3 Other financial income 0.2 0.1 Total financial income 2.0 0.4 Interest expenses -20.7 -12.7 Fair value adjustments shares and participations -6.7 -0.6 Other financing costs 0.2 -5.7 Fair value change derivatives 8.3 -0.2 Exchange rate losses -8.5 0.0 Total financial expense -27.4 -19.2 Total financial income and expense - net -25.5 -18.8 EUR -1.2 million (2021: EUR -1.0 million) of the interest expenses were attributable to amortisation of financing cost. In 2021 -5.6 million of financing costs was attributable to bond repurchase premium, early consent fee and expensed financing costs in connection with the refinancing in 2021. Net financial income and expense per category of financial instrument million EUR 2022 2021 Financial assets and liabilities measured at fair value through profit and loss 1.7 -0.8 Financial assets and liabilities measured at amortised cost -27.2 -18.0 -25.5 -18.8 118118 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 10 Exchange differences – net Exchange differences have been reported in the income statement as follows: million EUR 2022 2021 Other operating expenses -0.8 -0.1 Fair value change derivatives 0.5 - Total exchange difference in other operating expenses -0.3 -0.1 Exchange rate losses -8.5 0.0 Fair value change derivatives 8.3 -0.2 Total financial income and expense (note 9) -0.2 -0.2 Exchange differences - net -0.5 -0.3 Note 11 Income tax Tax income and expense in income statement million EUR 2022 2021 Tax income(+)/expense(-) comprises; Current tax income(+)/expense(-) this year -25.4 -12.5 Adjustment recognised in current year in relation to current tax of prior years -1.0 - Deferred tax income(+)/expense(-) 19.2 -2.1 Total tax income(+)/expense(-) -7.2 -14.6 The income tax attributable to the income before taxes differs from the theoretical amount that would have arisen from the application of the local tax rates on income before tax in the group companies, as follows: million EUR 2022 2021 Profit/loss before tax from continuing operations 42.5 49.0 Tax income(+)/expense(-) calculated at the local tax rate -10.0 -12.5 Effect of revenue that is exempt from taxation 12.8 2.4 Effect of non-deductible expenses -5.9 -1.0 Effect of tax losses and tax offsets not recognised as deferred tax assets -3.1 -3.6 Effect of previously unrecognised deferred tax attributable to tax losses carry forward, tax credits and temporary differences 0.0 0.1 Effect of write-downs and reversals of deferred tax balances 0.0 -0.1 Effect on deferred tax balances due to change in tax rate 0.0 0.0 Adjustment recognised in current year in relation to current tax of prior years -1.0 - Other 0.0 0.1 Total tax income(+)/expense(-) in profit or loss -7.2 -14.6 119119 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Recognised in other comprehensive income million EUR 2022 2021 Deferred tax Tax on remeasurement of defined benefit obligation 0.8 -0.8 Total 0.8 -0.8 Deferred tax assets and liabilities 2022 million EUR Opening balance Through acquired business Through divested business Reclassi- ficaton Reported in profit/loss Reported in other compre- hensive income Exchange differ- ences Closing balance Deferred tax in balance sheet is attributable to: Tax losses carry forward 0.3 0.9 - - 0.2 - 0.0 1.4 Intangible assets -19.1 -11.5 - -2.5 1.1 - 0.9 -31.1 Tangible assets -2.4 -37.9 0.3 - 16.9 - 0.6 -22.5 Inventories -0.4 0.0 - - 0.3 - - -0.1 Untaxed reserves -0.1 -0.7 - - 0.1 - - -0.7 Pension assets and liabilities -1.3 - - - 0.0 0.8 0.0 -0.5 Provisions 0.0 - - - 0.0 - - 0.0 Other -0.8 - - - 0.5 - - -0.3 Total net deferred tax assets and liabilities -23.8 -49.2 0.3 -2.5 19.1 0.8 1.5 -53.8 The reclassification of EUR 2.5 million in the table above is attributable to a finalised acquisition analysis during the year, related to an acquisition in 2021, in which a preliminary goodwill allocation was reduced and intangible assets increased, leading to higher deferred tax liabilities. Deferred tax assets and liabilities 2021 million EUR Opening balance Through acquired business Through divested business Reclassi- ficaton Reported in profit/loss Reported in other compre- hensive income Exchange differ- ences Closin g balanc e Deferred tax in balance sheet is attributable to: Tax losses carry forward 2.5 - - - -2.2 - 0.0 0. 3 Intangible assets -18.4 -0.9 0.2 -0.7 1.1 - -0.4 -19. 1 Tangible assets 0.9 -4.4 -0.2 0.9 -0.1 - 0.5 -2. 4 Inventories -0.2 - - - -0.2 - 0.0 -0. 4 Untaxed reserves -0.3 0.1 - - 0.2 - -0.1 -0. 1 Pension assets and liabilities -0.2 - - - -0.2 -0.8 -0.1 -1. 3 Provisions 0.1 - - - 0.0 - -0.1 0. 0 Other 0.0 -0.1 - -0.2 -0.7 - 0.1 -0. 8 Total net deferred tax assets and liabilities -15.6 -5.3 0.0 0.0 -2.1 -0.8 -0.1 -23. 8 Deferred tax assets are reported for tax losses carry forward or temporary differences to the extent that they are likely to be utlised against future taxable profits. All of the EUR 1.4 million of deferred tax assets attributable to tax losses carry forward have no due date. Tax losses carry forward corresponding to a tax value of EUR 14.6 million (EUR 12.0 million) were not recognised as deferred tax assets. EUR 13.8 million of those losses have no due date and the remaining EUR 0.8 million fall due between 2024 and 2032. The tax losses carry forward by the end of 2022 were attributable to Sweden, Finland, Germany, Norway and Poland. In addition, tax credits attributable to deferred interest deductions corresponding to a tax value of EUR 2.5 million (EUR 2.2 million) falling due between 2025 and 2027, were not recognised as deferred tax assets. 120120 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 12 Intangible assets million EUR Goodwill Trademark Customer relations Technology Patents, licences & IT Total As of 1 January 2021 Acquisition costs 85.1 21.3 64.1 9.0 13.6 193.1 Accumulated amortisations/write-downs -1.2 0.0 -14.0 -3.2 -11.4 -29.8 Carrying amount 83.8 21.3 50.1 5.8 2.2 163.2 Financial year 2021 Carrying amount brought forward 83.8 21.3 50.1 5.8 2.2 163.2 Exchange differences 1.6 0.3 1.7 0.1 -0.1 3.6 Acquisitions 0.0 - - - 4.6 4.6 Through acquired business 28.7 2.6 - 0.8 1.1 33.1 Divestment of business -1.1 - -0.5 -0.7 -0.5 -2.9 Reclassifications 0.0 - - 0.0 - 0.0 Disposals 0.0 - - - -0.8 -0.8 Amortisations - - -5.7 -1.0 -0.9 -7.6 Carrying amount carried forward 113.0 24.3 45.5 4.8 5.7 193.3 As of 31 December 2021 Acquisition costs 114.1 24.4 65.3 9.5 13.5 226.7 Accumulated amortisations/write-downs -1.0 -0.1 -19.8 -4.7 -7.9 -33.5 Carrying amount 113.0 24.3 45.5 4.8 5.7 193.3 million EUR Goodwill Trademark Customer relations Technology Patents, licences & IT Total Financial year 2022 Carrying amount brought forward 113.0 24.3 45.5 4.8 5.7 193.3 Exchange differences -3.0 -0.4 -1.8 0.0 0.0 -5.2 Acquisitions - - - - 4.6 4.6 Through acquired business 161.4 22.5 23.4 4.9 1.1 213.3 Divestment of business -1.0 - - - - -1.0 Reclassifications -7.6 1.7 8.3 0.4 - 2.8 Writedown - - - 0.0 -0.1 -0.1 Disposals - - - - - 0.0 Amortisations - 0.0 -7.0 -1.4 -1.2 -9.6 Carrying amount carried forward 262.8 48.1 68.4 8.7 10.0 398.0 As of 31 December 2022 Acquisition costs 263.8 48.2 95.2 14.9 19.2 441.2 Accumulated amortisations/write-downs -1.0 -0.1 -26.8 -6.1 -9.2 -43.2 Carrying amount 262.8 48.1 68.4 8.7 10.0 398.0 Of the amortisations above, EUR 0.1 million in 2022 (0.2) was attributable to leases. The carrying amount of capitalised leases as of December 31, 2022 was EUR 0.0 million (0.2). In March 2021 IFRS IC update included an agenda decision on configuration and customisation costs in a cloud computing arrangement, impacting costs associated with a Software as a Service (SaaS) cloud arrangement. Key areas to consider are whether these costs can be capitalised as an intangible asset or as a prepayment or whether they must be expensed when incurred. BEWI has started the implementation of a cloud-based ERP system and is consequently impacted by this IFRS IC deci- sion and BEWI has therefore undertaken an analysis of the contract with the software supplier and the nature of the different components of the implementation costs, to fully understand the accounting treatment of these costs and whether something should be expensed. Initially, all costs incurred had been capitalised and intangible assets. The analysis was completed in 2022, leading to EUR 2.0 million being expensed, EUR 1.6 million being reclassified from intangible assets to prepaid expense 121121 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 and EUR 2.7 million remaining as intangible assets. The amount recognised in intangible assets is mainly related to costs for ancillary systems and support systems, such as manufacturing executing systems, which despite their integration with the new cloud-based ERP system are separate from the SaaS arrangement and contract. The prepaid expenses are mainly attributable to customisations of the ERP system to BEWI specific requirements. By the end of 2022, costs amounting to EUR 6.9 million incurred in this ERP implementation have been capitalised as an intangible asset. Considerations of impairment need for goodwill and trademark Goodwill and trademarks have an indefinite useful life and are monitored each cash generating unit by the executive manage- ment. Goodwill and trademarks divided by cash generative unit are summarised as follows: Goodwill million EUR 31 Dec 2022 31 Dec 2021 RAW 10.4 10.8 Insulation Nordics 4.6 6.5 Insulation Finland - 0.7 Insulation Netherlands 20.9 20.9 Insulation Belgium 4.4 - Insualtion Lithuania 9.0 - Insualtion UK 11.2 - Packaging & Components Sweden 2.6 2.8 Packaging & Components Denmark 9.8 9.8 Packaging & Components Netherlands 1.7 1.7 Packaging & Components Norway 47.5 33.0 Packaging & Components Portugal & Spain 5.4 5.4 Packaging & Components Poland 4.1 4.2 Circular 24.4 5.0 Goodwill not divided on segment, pending PPA 106.8 12.0 Total 262.8 113.0 Trademarks million EUR 31 Dec 2022 31 Dec 2021 RAW 0.6 0.6 Insulation Netherlands 5.9 5.9 Insulation Nordics 0.4 0.7 Insulation UK 2.4 - Insualtion Lithuania 2.6 - Insulation Belgium 1.7 - Packaging & Components Denmark 5.1 5.1 Packaging & Components Netherlands 2.3 2.3 Packaging & Components Norway 6.0 6.0 Packaging & Components Portugal & Spain 1.1 1.1 Packaging & Components Poland 2.6 2.6 Circular 2.8 - Trademark not divided on segment, pending PPA (attributable to Jackson acquisition) 14.7 - Total 48.1 24.3 The assumptions used for calculating the value in use are the same for goodwill and trademarks. The executive management has assessed that revenue growth, operating margin, discount rate and long-term growth are the most critical assumptions in the impairment assessment. The recoverable amount has been assessed based on estimates of the value in use. The estimates are based on future estimated cash flow before tax based on financial budgets and business plans for the next year, approved by the senior executives, and extrapolated for an additional four-year period, assuming a prudent increase in both revenue and costs of 2.0 per cent or more in case there are specific circumstances, such as a turnaround case or a recovery from a macro economic slowdown. This has been the case for the automotive business and for Insulation in the Nordics. The estimates are based on the executive management’s experience and historical data. The discount rate after tax amounts to 8.6 per cent (6.6 per cent). The long-term sustainable growth rate has been estimated at 2 per cent (2 per cent) for all cash generating units and has been assessed in accordance with industry forecasts. No impairment of goodwill or intangible fixed assets was identified in 2022. A change in the discount rate of 1 per cent or reduced cash flow of 10 per cent would not change the outcome of the test. Tangible fixed assets of EUR 0.8 million were written down in 2022 (EUR 1.0 million), based on an individual assessment for those assets. 122122 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 13 Tangible assets million EUR Buildnings and land Plant and other technical machinery Equipment, tools, fixtures and fittings Construction in progress and advance payments for property, plant and equipment Total As of 1 January 2021 Acquisition costs 89.3 255.0 30.6 9.4 384.3 Accumulated depreciations/write-downs -19.3 -174.3 -20.4 -0.1 -214.0 Carrying amount 70.0 80.0 10.2 9.3 170.3 Financial year 2021 Carrying amount brought forward 70.0 80.8 10.2 9.3 170.3 Exchange differences 1.0 0.9 0.1 -0.1 1.9 Acquisitions 0.4 17.9 1.4 11.5 31.2 Capitalised leases 2.4 0.1 3.1 - 5.7 Through acquired business 26.9 7.8 1.5 1.7 37.8 Divestment of business -0.5 -0.3 - - -0.8 Writedown 0.0 -0.9 -0.0 - -1.0 Reclassifications 0.2 11.4 0.4 -12.0 0.0 Disposals 0.0 -0.3 -0.3 -0.2 -0.8 Depreciations -9.2 -16.1 -3.9 - -29.2 Carrying amount carried forward 91.3 101.3 12.4 10.1 215.1 As of 31 December 2021 Acquisition costs 123.5 300.8 40.3 10.1 474.8 Accumulated depreciations/write-downs -32.3 -199.5 -27.9 -0.0 -259.7 Carrying amount 91.3 101.3 12.4 10.1 215.1 million EUR Buildnings and land Plant and other technical machinery Equipment, tools, fixtures and fittings Construction in progress and advance payments for property, plant and equipment Total Financial year 2022 Carrying amount brought forward 91.3 101.3 12.4 10.1 215.1 Exchange differences -5.4 -2.8 -0.2 -0.1 -8.5 Acquisitions 1.5 18.1 4.3 13.8 37.8 Capitalised leases 73.5 0.4 2.2 - 76.1 Through acquired business 175.1 76.9 20.0 14.4 286.4 Divestment of business -1.5 -0.5 -2.7 -3.6 -8.3 Writedown 0.0 -0.8 0.0 - -0.8 Reclassifications 1.4 6.3 -1.2 -7.0 -0.4 Disposals -85.3 -0.8 -2.0 -3.8 -91.9 Depreciations -12.1 -20.1 -4.4 - -36.7 Carrying amount carried forward 238.6 178.0 28.2 23.9 468.8 As of 31 December 2022 Acquisition costs 283.0 398.5 60.5 24.0 766.0 Accumulated depreciations/write-downs -44.4 -220.5 -32.3 -0.0 -297.3 Carrying amount 238.6 178.0 28.2 23.9 468.8 Amounts above attributable to leases: Depreciations 2022 -9.6 -1.5 -2.0 -13.1 Of which is attributable to IFRS 16 -9.6 -0.3 -1.9 -11.8 Carrying amount 31 December 2022 140.1 5.6 7.0 152.7 Of which is attributable to IFRS 16 140.1 2.7 6.3 149.1 Depreciations 2021 -7.6 -1.9 -1.8 -11.3 Of which is attributable to IFRS 16 -7.6 -0.4 -1.8 -9.7 Carrying amount 31 December 2021 53.1 4.7 4.3 62.0 Of which is attributable to IFRS 16 52.7 0.3 4.3 57.4 123123 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 14 Business acquisitions Cash flow from acquisition of business million EUR 2022 2021 Cash consideration -228.0 -73.3 Cash in acquired business -2.9 19.3 Total cash out/-inflow -230.9 -54.0 Business acquisitions during the year Jablite Group Ltd On 18 May 2022, BEWI announced the signing of an agreement to acquire an additional 51 per cent of the leading UK based insulation and packaging company Jablite Group (“Jablite”), with an annual turnover of approximately GBP 40 million, thereby becoming 100 per cent owner of the company. BEWI has held 49 per cent in Jablite since June 2020 and the company has until the last acquisition been reported as an associated company in accordance with the equity method. The group is consolidated as a subsidiary as from 1 June 2022. Jablite has approximately 50 years of experience from innovating and developing EPS solutions for insulation and packaging. The group includes the manufacturer and supplier of solutions for insulation and civil engineering named Jablite and the producer of packaging products named Styropack. The adjusted acquisition analysis presented below gave rise to goodwill of EUR 11.7 million, which I related to synergies such as future market growth opportunities and future cost savings. The main value adjustments were related to trademarks and customer relations. Goodwill is not tax deductible. Until 31 December 2022, Jablite had contributed EUR 35.4 million to the group’s net sales, EUR 1.3 million to adjusted EBITDA and EUR 0.3 million to EBIT, excluding transaction costs and capital gains from revaluation of shares in associate. Of this, EUR 0.4 million in adjusted EBITDA and EUR 0.3 million in EBIT are attributable to Jablite’s result when being an associated company. If the acquisition of the remaining 51 per cent of Jablite had taken place on 1 January, Jablite would have contributed EUR 58.6 million to the group’s net sales, EUR 3.2 million to adjusted EBITDA and EUR 1.1 million to EBIT. Transaction costs amounted to EUR 0.3 million. Amounts in million EUR Total Cash consideration during the period 11.7 Capital gain from revaluation of shares in associate 2 9.7 Book value of shares in associate 1.6 Total 23.0 Recognised amount of identifiable assets and acquired liabilities assumed Trademark 2.5 Customer relations 8.0 Other intangible assets 0.0 Property, plant and equipment 17.4 Other fixed assets 0.1 Inventory 4.3 Current receivables 11.4 Cash and cash equivalents 0.3 Non-current liabilities -15.1 Deferred tax liability -3.0 Current liabilities -14.5 Total identifiable net assets 11.4 Goodwill 11.7 Cash and cash equivalents in acquired business 0.3 Total cash outflow from acquisition of business during the period -11.5 1 The acquisition analysis is preliminary 2 BEWI owned 49 per cent of Jablite Group Ltd before the acquisition of the additional 51 per cent of the group. This is consequently a transaction of a business combination achieved in stages. In a business combination achieved in stages, IFRS 3 states that the acquirer shall remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the resulting gain in the statement of income 124124 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Trondhjems Eskefabrikk AS, Berga Recycling Inc, Aislamientos y Envases, S.L. (“Aislenvas”) and Inoplast s.r.o. (“Inoplast) On 12 April 2022, BEWI announced the signing of an agreement to acquire the Norwegian paper packaging company Trondhjems Eskefabrikk AS. The company is consolidated as from 1 May. Trondhjems Eskefabrikk is manufacturing fibre-based packaging products, such as carton boxes to the food industry, which are 100 per cent recyclable, and a significant share of the raw material used is recycled fibres. The acquisition provides BEWI with an extended offering of recyclable and recycled products, in line with the company’s strategy to provide its customers with complementary solutions. Also, the acquisition supports the company’s sustainability target to increase the use of non-fossil raw materials. For 2021, Trondhjems Eskefabrikk had revenues of approximately EUR 13.5 million, up from EUR 11.7 million for 2020. On 10 June 2022, BEWI announced the signing of Berga Recycling Inc., a world leader in the purchase and sale of materials for recycling. Berga’s vision is to become the world’s largest agency for materials for recycling. In 2021, the company purchased and sold an annual volume of approximately 82 000 tonnes of materials for recycling through a network of hundreds of customers globally. The trading is completed through an online trading platform, which is linked to Berga’s comprehensive network of logistic partners. Through the system, customers can track the delivery of the material, enabling improved planning throughout the value chain and securing a seamless process from the completion of the transaction to the delivery of the material. For 2021, Berga had sales revenues of approximately EUR 31 million, with an EBITDA margin of approximately 10 per cent. The company has shown a sustained profitable growth of more than 20 per cent the last three years. The company is consolidated as from 1 June. On 28 November 2022, BEWI announced that the company has entered an agreement to acquire 80 per cent of the leading Spanish insulation company Aislenvas, on 7 December 2022 the transaction was finalised. Aislenvas operates three facilities, all in the same industrial area, manufacturing a variety of EPS-based solutions. The company’s key products are insulation solutions, including EPS boards for underfloor heating and EPS panels for External Thermal Insulation Composite Systems (ETICS) used to improve the energy efficiency for building renovations. In addition, Aislenvas provides a range of other EPS-based products, such as packaging and industrial applications.In 2021, Aislenvas had revenues of approximately EUR 16.0 million, with an EBITDA of EUR 3.5 million. From 2018 to 2021, Aislenvas recorded significant and profitable growth, mainly driven by increased demand for underfloor heating products, increased sales for key customers and high retention rate for other customer. The company is consolidated as from 31 December. On 6 December 2022, BEWI announced the acquisition of an additional 66 per cent of the Czech recycling company Inoplast, becoming owner of 100 per cent of the company. BEWI first announced its acquisition of 34 per cent of Inoplast in March 2021. Inoplast specialises in recycling of plastics, mainly expanded polystyrene (EPS), but also other types of plastics. The company has a recycling facility located approximately 35 km from Prague in the city of Slaný, with modern and versatile machinery, allowing for recycling of various plastic waste. In addition to recycling EPS, the company recycles polypropylene (PP), HDPE (high density polyethylene) film, PET, and various other plastics from production waste. The company is consolidated as from 31 December. The combined acquisition analyses for these acquisitions is presented below and gave rise to a goodwill of EUR 48.6 million, which relates to synergies such as future market growth opportunities and future cost savings. The main fair value adjustments were related to trademark, customer relations and technology. Goodwill is not tax deductible. Until 31 December 2022, the companies had contributed EUR 22.8 million to the group’s net sales, EUR 3.5 million to adjusted EBITDA and EUR 2.1 million to EBIT, excluding transaction costs. If the acquisition of the companies had taken place on 1 January, they would have contributed EUR 42.2 million to the group’s net sales, EUR 5.6 million to adjusted EBITDA and EUR 4.5 million to EBIT. Transaction related costs amounted to EUR 2.3 million. 125125 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Amounts in million EUR Total Cash consideration during the period 64.0 Promissory note 2.4 Capital gain from revaluation of shares in associate 2 1.1 Book value of shares in associate 0.4 Total 67.9 Recognised amount of identifiable assets and acquired liabilities assumed Trademark 2.9 Customer relations 6.0 Technology 3.1 Other intangible assets 0.1 Property, plant and equipment 11.7 Other fixed assets 0.9 Inventory 3.8 Current receivables 12.2 Cash and cash equivalents 4.1 Non-current liabilities -9.1 Deferred tax liability -3.4 Current liabilities -12.1 Total identifiable net assets 20.2 Liabilities to non-controlling interests 0.9 Goodwill 48.6 Cash and cash equivalents in acquired business 4.1 Total cash outflow from acquisition of business during the period -59.9 1 The acquisition analyses are preliminary 2 BEWI owned 34 per cent of Inoplast before the acquisition of the additional 66 per cent of the group. This is consequently a transaction of a business combi- nation achieved in stages. In a business combination achieved in stages, IFRS 3 states that the acquirer shall remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the resulting gain in the statement of income 126126 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 UAB Baltijos Polistirenas (“BalPol”) On 18 February 2022 BEWI announced entering a letter of intent to acquire 100 per cent of a Baltic insulation company. On 1 July 2022 BEWI announced that an agreement to acquire the company was signed and on 31 August 2022 the transaction was finalised. BalPol is the market leader in Lithuania for insulation solutions from expanded polystyrene (EPS) and PIR, and for EPS packaging solutions. BalPol, which was established in 2002, has approximately 150 employees and currently operates two downstream facilities, whereas one facility produces PIR and MW sandwich panels and PIR insulation boards, while the other produces insulation solutions from EPS for construction and packaging products from EPS and EPE. BalPol demonstrated solid growth and improved profitability in 2021, recording revenues of approximately EUR 31.0 million and an EBITDA of approximately EUR 4.3 million. The increase is mainly explained by favourable market conditions, a broadened product range and increases sales prices. The total consideration for the shares in BalPol amounts to approximately EUR 29.2 million, of which 50 per cent has been paid in cash and 50 per cent has been settled by the issuance of 2 238 188 consideration shares in BEWI at a share price of NOK 64.64 per share. The price per share is calculated based on a three (3) months weighted average price from 23 August 2022. The share capital increase was resolved by the board of directors by use of the authorisation granted by the annual general meeting on 2 June 2022. The company is consolidated as from 1 September. The adjusted acquisition analysis presented below gave rise to goodwill of EUR 9.0 million, which relates to synergies such as future market growth opportunities and future cost savings. The main value adjustments were related to buildings & land, trademark, and customer relations. Goodwill is not tax deductible. Until 31 December 2022, BalPol had contributed EUR 8.7 million to the group’s net sales, EUR 0.5 million to adjusted EBITDA and EUR 0.1 million to EBIT, excluding transaction costs. If the acquisition of BalPol had taken place on 1 January, BalPol would have contributed EUR 34.7 million to the group’s net sales, EUR 3.3 million to adjusted EBITDA and EUR 2.2 million to EBIT. Transaction costs amounted to EUR 0.1 million. Amounts in million EUR Total Cash consideration 14.4 Paid in shares 12.9 Total 27.4 Recognised amount of identifiable assets and acquired liabilities assumed Trademark 2.6 Technology 0.0 Customer relations 10.1 Other intangible assets 0.0 Property, plant and equipment 8.6 Other fixed assets 0.7 Inventory 6.5 Current receivables 4.1 Cash and cash equivalents 0.1 Non-current liabilities -2.0 Deferred tax liability -3.0 Current liabilities -9.3 Total identifiable net assets 18.4 Goodwill 9.0 Cash and cash equivalents in acquired business 0.1 Total cash outflow from acquisition of business -14.3 1 The acquisition analysis is preliminary 127127 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Jackon Holding AS In October 2021, BEWI received acceptance from all shareholders on its offer for the acquisition of the Norwegian family-owned packaging and insulation company Jackon Holding. On 12 October 2022, the company announced that it had received final approvals from all relevant competition authorities to proceed with closing of the acquisition. The approval in Finland was conditional upon BEWI divesting two insulation facilities, located in Tarvasjoki and Ruukki. The divestments were completed on 24 October 2022. In Norway, the approval was conditional upon divestments of Jackon’s packaging facility in Alta and the share (63 per cent) of the packaging facility called Kasseriet in Gratangen. The divestments were completed on 26 October 2022. In total, revenues for the four facilities divested represent less than two per cent of the combined company’s annual turnover. On 19 October, BEWI announced that the acquisition of Jackon was completed. On this date, BEWI issued 32 070 000 new shares directed to the Akselsen family and their investment company HAAS AS, as consideration for their 50 per cent holding of the shares of Jackon. The shares are subject to a 12-months lock-up from issuance. The shareholders holding the remaining 50 per cent accepted received approximately NOK 1.3 billion in cash upon closing. Jackon was consolidated from 1 November 2022. At the time of the release of this report, the acquisition analysis for Jackon is preliminary and gave rise to goodwill of EUR 94.2 million. A complete acquisition analysis is expected to be presented in 2023, leading to fair value adjustments of intangible assets and a corresponding change in goodwill. Goodwill is not tax deductible. Until 31 December 2022, Jackon had con- tributed EUR 54.0 million to the group’s net sales, EUR 1.5 million to adjusted EBITDA and EUR -0.4 million to EBIT, excluding transaction costs. If the acquisition of Jackon had taken place on 1 January, Jackon would have contributed EUR 423.0 million to the group’s net sales, EUR 24.2 million to adjusted EBITDA and EUR 11.3 million to EBIT. Transaction costs amounted to EUR 7.9 million. Amounts in million EUR Total Cash consideration 128.9 Paid in shares 148.8 Total 277.6 Recognised amount of identifiable assets and acquired liabilities assumed Trademark 15.1 Technology 1.9 Other intangible assets 1.0 Property, plant and equipment 247.0 Other fixed assets 2.0 Inventory 57.2 Current receivables 76.8 Cash and cash equivalents -7.4 Non-current liabilities -92.3 Deferred tax liability -39.9 Current liabilities -77.2 Total identifiable net assets 184.1 Liabilities to non-controlling interests -0.7 Goodwill 94.2 Cash and cash equivalents in acquired business -7.4 Total cash outflow from acquisition of business -136.3 1 The acquisition analysis is preliminary 128128 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 IZOBLOK On 2 November 2021, BEWI launched a tender offer for the acquisition of all outstanding shares in IZOBLOK. The offer was com- pleted on 31 January 2022. Under the tender offer, BEWI received acceptances for a total of 121 870 shares at a price per share of PLN 50.41, amounting to a total consideration of approximately EUR 1.3 million Settlement of the transaction was completed on 7 February 2022. After this transaction, BEWI owns (indirectly) 64.28 per cent of the shares, corresponding to 73.21 per cent of the voting rights in IZOBLOK. Other In 2022, BEWI has also acquired non-controlling interests and settled final purchase price related to acquisitions carried out in 2021, leading to a total cash payment of EUR 7.5 million. This has not resulted in any changes to the fair value of acquired assets and liabilities in business combinations. Note 15 Sale of business The acquisition of Jackon was conditional upon divestment of two insulation facilities in Finland and two packaging facilities in Norway. In Finland, BEWI entered an agreement for the sale of the two insulation facilities located in Tarvasjoki and Ruukki. In Norway, the agreement was entered into with the companies Kasseriet Alta AS and Kasseriet Holding AS for the sale of Jackon’s facility in Alta and its shares in Kasseriet AS in Gratangen (63 per cent) respectively. Until the date of divestment, the companies contributed EUR 13.1 million to the group’s net sales, EUR 1.0 million to adjusted EBITDA and EUR 0.8 million to EBIT in 2022. million EUR Total Cash consideration 8.1 Total 8.1 Recognised amount of identifiable assets and liabilities Goodwill 1.0 Property, plant and equipment 8.3 Other fixed assets 0.1 Inventory 2.1 Current receivables 4.6 Cash and cash equivalents 0.3 Non-current liabilities -0.0 Deferred tax liability -0.3 Current liabilities -6.5 Total identifiable net assets 9.5 Cash and cash equivalents in sold business 0.3 Total cash inflow from sale of business 7.8 129129 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 16 Shares in associates Name Carrying amount 31 Dec 2021 Through acquired business Acquired as a subsidiary Dividend Share of income Exchange difference Carrying amount 31 Dec 2022 HIRSCH Porozell GmbH 4.8 - - -2.0 3.2 -0.1 5.8 HIRSCH France SAS 6.5 - - -0.9 -0.1 5.5 Jablite Group Ltd 1.4 - -1.7 - 0.3 - - Inoplast S.R.O 0.3 - -0.4 - 0.1 - - BEWI EPS ehf. 0.8 - - - - - 0.8 Energijägarna AB (E&D) - 1.0 - - - - 1.0 Total 13.8 1.1 -2.1 -2.0 2.8 -0.2 13.2 Name Carrying amount 31 Dec 2020 Acquisitions during the year Acquired as a subsidiary Dividend Share of income Exchange difference Carrying amount 31 Dec 2021 HIRSCH Porozell GmbH 2.4 - - -1.0 3.4 - 4.8 HIRSCH France SAS 5.4 - - - 0.9 0.1 6.5 Jablite Group Ltd 0.1 - - - 1.4 - 1.4 Inoplast S.R.O - 0.3 - - 0.0 - 0.3 BEWI EPS ehf. - 0.8 - - - - 0.8 Total 8.0 1.1 - -1.0 5.7 0.1 13.8 Share of income from Jablite Group Ltd in 2021 includes a positive amount of EUR 0.9 million, corresponding to BEWI’s share of reversal of negative goodwill. Non-current receivables associates 31 Dec 2022 31 Dec 2021 As of 1 January 4.2 4.1 Loans repaid -2.3 - Acquired as a subsidiary -1.9 Exchange rate difference - 0.1 As of 31 December - 4.2 Summarised financial information for associates 2022 Net sales EBITDA Operating profit (EBIT) Net profit HIRSCH Porozell GmbH 144.9 17.8 14.4 9.3 HIRSCH France SAS 86.9 3.2 -3.0 -2.5 Jablite Group Ltd 1 22.5 1.5 1.3 0.8 Inoplast S.R.O 7.4 0.4 0.2 0.2 BEWI EPS ehf. - - - - 31 Dec 2022 Non-current assets Current assets Non-current liabilities Current liabilities Net debt HIRSCH Porozell GmbH 45.7 44.5 12.6 29.3 8.1 HIRSCH France SAS 35.8 26.3 25.9 18.1 13.6 Jablite Group Ltd 3.6 16.0 3.0 13.1 6.0 Inoplast S.R.O 2.6 1.1 - 2.4 1.2 BEWI EPS ehf. - - - - - 1 Net sales, EBITDA, EBIT and Net profit for Jablite Group Ltd referes to period January to May when Jablite was an associated company. The balance sheets items in the table above are adjusted to reflect adjustments made by BEWI when the associates are included in the consolidated accounts by applying the equity method. The balance sheets in the statutory accounts for these companies will therefore deviate to the table above for some of the items. 130130 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 HIRSCH Porozell GmbH (34 per cent ownership) In connection with the acquisition of Synbra in 2018, 66 per cent of Synbra’s shares in the German company Isobouw GmbH was divested to Hirsch Servo Group. At the same time, BEWI obtained 34 per cent in the newly incorporated company Hirsch Porozell GmbH, which acquired Saint Gobain’s insulation operations at four sites in Germany. The other 66 per cent is held by Hirsch Servo Group. In 2019, Isobouw GmbH was merged into Hirsch Porozell GmbH and the combined company now operates six insulation production sites in Germany. Hirsch France SAS (34 per cent ownership) On 31 December 2019, BEWI, together with Hirsch Servo Group, closed a deal in which six insulation production sites in France and 49.9 per cent of the shares in the French company Issosol SAS were acquired from Placopatre SA, a subsidiary of Saint Gobain. The acquisitions are done through a newly incorporated French company, Hirsch France SAS, 34 per cent owned by BEWI and 66 per cent owned by Hirsch Servo Group. BEWI EPS ehf. (49 per cent ownership) BEWI owns 49% in the company BEWI EPS ehf. located on Iceland. The company has not yet commenced operations. Energijägarna AB (49.8 per cent ownership) In connection with the acquisition of Jackon, Energijägarna AB became part of BEWI Group as an associated company. Erergijägarna AB is owned by Jackon AB. Remondis Technology Sp. z.o.o. BEWI owns 34% in the Polish recycling company Remondis Technology Sp. z.o.o since the acquisition of BEWi Drift Holding AS in 2020. The company is, among other things, collecting and reusing EPS for recycling in extruders and selling the end products to BEWI’s RAW business. 131131 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 17 Financial instruments per category 31 December 2022 million EUR Financial assets measured at fair value through profit and loss Financial assets measured at amortised cost Total Balance sheet assets Other long-term receivables - 0.1 0.1 Participations in other companies 6.1 - 6.1 Accounts receivables - 156.7 156.7 Current derivative assets 8.3 - 8.3 Cash and cash equivalents - 47.5 47.5 Total 14.4 204.3 218.7 31 December 2022 million EUR Financial liabilities measured at fair value through profit and loss Financial liabilities measured at amortised cost Total Balance sheet liabilities Non-current bond loan - 246.9 246.9 Non-current liabilities to credit institutions - 87.8 87.8 Non-current liabilities leases - 150.4 150.4 Current liabilities to credit institutions - 69.5 69.5 Overdraft facillity - 22.7 22.7 Current liabilities leases - 20.1 20.1 Current derivative liability 0.4 - 0.4 Account payables - 83.5 83.5 Total 0.4 681.0 681.4 31 December 2021 million EUR Financial assets measured at fair value through profit and loss Financial assets measured at amortised cost Total Balance sheet assets Other long-term receivables - 4.2 4.2 Participations in other companies 9.8 - 9.8 Accounts receivables - 98.8 98.8 Current derivative assets 0.2 - 0.2 Cash and cash equivalents - 142.3 142.3 Total 10.0 245.4 255.5 31 December 2021 million EUR Financial liabilities measured at fair value through profit and loss Financial liabilities measured at amortised cost Total Balance sheet liabilities Non-current bond loan - 246.1 246.1 Non-current liabilities to credit institutions - 9.8 9.8 Non-current liabilities leases - 66.1 66.1 Other financial non-current liabilites 1 4.3 - 4.3 Current liabilities to credit institutions - 3.0 3.0 Overdraft facillity - 0.8 0.8 Current liabilities leases - 13.0 13.0 Current derivative liability 0.2 - 0.2 Account payables - 89.7 89.7 Total 4.5 428.4 432.9 1 Other financial non-current liabilities include the option to acquire non-controlling interests, valued at EUR 3.8 million, and EUR 0.5 million in liabilities for non-current derivatives 132132 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 18 Account receivables million EUR 31 Dec 2022 31 Dec 2021 Accounts receivables 158.0 99.8 Deducted: provisions for impairment for doubtful receivables -1.4 -1.0 Accounts receivables - net 156.7 98.8 The ageing analysis of all account receivables is clear from below: million EUR 31 Dec 2022 31 Dec 2021 Not yet matured 124.9 86.3 1–30 days 24.6 10.4 31–60 3.8 1.7 > 61 days 4.8 1.5 Deducted: provisions for impairment for doubtful receivables -1.4 -1.0 Accounts receivables - net 156.7 98.8 31 Dec 2022 31 Dec 2021 Matured account receivables not part of the provisions for impairment for doubtful receivables 31.8 12.6 Carrying amounts, per currency, for account receivables and other receivables are the following: million EUR 31 Dec 2022 31 Dec 2021 SEK 15.8 8.1 EUR 73.8 56.5 GBP 11.6 0.8 NOK 32.7 16.9 DKK 18.3 14.9 ISK 1.3 1.3 USD 2.4 - CAD 0.6 - PLN 0.1 - Other 0.1 0.4 156.7 98.8 The group is applying the simplified approach for estimating credit losses. Estimated life-time cash shortfalls is the basis for calculating credit losses for accounts receivables. For this purpose, accounts receivables are grouped based on certain char- acteristics. The principles for writing off accounts receivables are based on prerequisites such as insolvency, failed legal and other collection processes, credit risk assessments based on credit information provided by credit agencies, identified payment behavior, company specific information such as changes in company management or lost contracts and macro-economic outlook for industries and countries. Credit losses on accounts receivables are reported in operating income. Reversals of prior credit losses are also reported in operating income. 133133 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 19 Inventory The expenditure for inventory carried as an expense forms part of the items raw materials and consumables and goods for resale in the income statement and amounts to EUR 568.4 million (EUR 397.1 million). EUR 1.1 million (EUR 1.2 million) was expensed as write-downs of inventory in 2022. The group reversed EUR 0.6 million (EUR 0.5 million) in 2022 of earlier write-downs of the inventory. The expense and reversed amount is reported in the item raw materials and consumables in the income statement. Note 22 Share capital The number of shares as of December 31, 2022 amounted to 191 347 992, each with a par value of NOK 1. Each share entitles to one vote. All shares issued by the parent company are fully paid. Fully paid ordinary share Type of change Date of decision Changes in number of shares Change in share capital Total number of shares Total share capital (NOK) Par value (NOK) As of 31 Dec 2020 148 410 874 148 410 874 1.00 New share issue 6 May 2021 7 067 138 7 607 138 155 478 012 155 478 012 1.00 New share issue 7 Jul 2021 1 132 792 1 132 792 156 610 804 156 610 804 1.00 As of 31 Dec 2021 156 610 804 156 610 804 1.00 New share issue 9 Mar 2022 429 000 429 000 157 039 804 157 039 804 1.00 New share issue 9 Sep 2022 2 238 188 2 238 188 159 277 992 159 277 992 1.00 New share issue 19 Oct 2022 32 070 000 32 070 000 191 347 992 191 347 992 1.00 As of 31 Dec 2022 191 347 992 191 347 992 1.00 Following the authorisation from the extraordinary general meeting on 16 November 2020, the board of directors on 6 May 2021 resolved to issue 70671ue 7 067 138 new shares for subscription price of NOK 28.30 in a private placement that raised NOK 200 million, equal to EUR 19.6 million. Net of transaction costs, equity increased by EUR 18.9 million. On the 3 June 2021, the annual general meeting of the company authorised the board of directors to increase the share capital of the company to inter alia strengthen the equity of the company, finance future growth and acquisitions and to increase the liquidity and spread of ownership in respect of the shares and for other purposes as the board of directors decides, by up to NOK 31095 601 095 602, equivalent to 20% of the share capital at the time the authorisation was granted. The authorisation was valid until the annual general meeting in 2022, however expiring at the latest on 30 June 2022. Following the authorisation, the Board of Directors on 7 July 2021 resolved to issue 11sue 1 132 792 new shares for a subscription price of NOK 27.50 per share in a private placement, as part of the consideration for the shares in IZOBLOK, and directed towards the majority seller of that company. The new share issue increased equity by NOK 31.2 million, equal to EUR 3.1 million. Note 20 Prepaid expenses and accrued income million EUR 31 Dec 2022 31 Dec 2021 Prepaid energy tax expenses 0.6 0.4 Accrued bonus and discounts 1.1 0.5 Other items 10.9 4.0 Total 12.5 5.0 Note 21 Cash and cash equivalents million EUR 31 Dec 2022 31 Dec 2021 Bank balances 47.5 142.3 134134 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 On 2 March, following the exercise of share options by option holders under the company’s share option programme, the board of directors resolved to increase the company’s share capital by NOK 429 000, by the issuance of 429 000 new shares at a subscription price of NOK 24.06 per share. On the 16 of February 2022, an extra general meeting of the company authorised the board of directors to increase the share capital by up to 32 070 000 shares. The authorization could only be used in connection with the company’s acquisition of shares in Jackon Holding AS. Following the authorisation, the board resolved to issue 32 070 000 for the subscription price of NOK 45.9925 on the 19 October 2022. On the 2 June 2022, the annual general meeting of the company authorised the board of directors to acquire shares in the company on one or more occasions. The total nominal value of shares acquired pursuant to this authorisation may not exceed NOK 15703980, equal to t5 703 980, equal to ten per cent of the company’s share capital at the time the authorisation was given. The purchase price per share shall not be less than NOK 1 and not more than NOK 500. The purchase of own shares shall otherwise be com- pleted by the board of directors at its discretion. The authorisation is valid until the next annual general meeting, but not later than 30 June 2022. By 31 December 2022, no shares had been bought back. On the 2 June 2022, the annual general meeting of the company also authorised the board of directors to increase the share capital by 31 407 960 NOK. Within this aggregated amount, the authorisation may be used on more than one occasion to strengthen the equity of the company, finance future growth of the company’s business, acquire companies with settlement in company’s shares, increase the liquidity and spread the ownership in respect of the company’s shares or for other purposes as the board decides. The authorisation is valid until the annual general meeting in 2023, and will in any cases expire 30 June 2023. Following the authorisation, the board of directors resolved to issue 2 238 188 new shares for the subscription price of 64.64 NOK per share in connection with the acqusition of UAB Baltijos Polistirenas. Largest shareholders Name Shares Per cent BEWI Invest AS 1 97 958 328 51.19 HAAS AS 2 32 070 000 16.76 Kverva Industrier AS 15 292 424 7.99 J.P. Morgan SE 5 068 463 2.65 Skandinaviska Enskilda Banken AB 3 794 246 1.98 Nordea Bank Abp 3 585 405 1.87 M AM Asset Management AB 2 943 258 1.54 AB SEB BANKAS 2 238 188 1.17 Union Bancaire Privee, UBP SA 2 165 467 1.13 Tredje AP-fonden 1 874 189 0.98 Other 24 358 024 12.73 Total 191 347 992 100.00 1 BEWI Invest AS is majority owned by members of the Bekken family. HAA2 HAAS AS is owned by members of the Akselsen family, including director of the board Andreas M. Akselsen. 135135 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 23 Share-based incentive programme In November 2020, the board of directors exercised the authorisation given by the Extraordinary General Meeting on 16 November and launched a share-based incentive programme to a maximum of 25 key employees in the company, involving a maximum of 2 875 000 share options, and entitling the participants in the programme to subscribe for the same number of shares in the company during a three-year period. The number of share options outstanding as of 31 December 2022 represents 1.2 per cent of the number of shares outstanding as of that date. The purpose of the programme is to further align the interests of the company and its shareholders by providing incentives in the form of awards to employees to motivate them to contribute materially to the success and profitability of the company. This programme will also enable the company to attract and retain such employees. Settlement of the options may, at the discretion of the board of directors, be done by issuing new shares or by using, if available, shares bought back by the company. At grant date on 19 November 2020, 2 625 000 share options were granted to 22 key employees. The share options entitle the partici- pants to subscribe for shares at a pre-set strike price, which is adjusted for dividends paid. Strike price at grant date was NOK 24.48, equal to 110 per cent of the average share price during five days preceding the grant date on 19 November 2020. As of 31 December 2022 strike price was NOK 22.96 (24.06). The gain per option may however not exceed the strike price at the time of exercise, multiplied by three minus strike price at grant date. The number of exercisable options will be reduced proportionally so that the maximum gain does not exceed the maximum gain per option multiplied by the numbers of options granted. This gain is calculated based on the average share price five days prior to the period of exercise. In the event the company is not capable of delivering shares (for reasons being lack of approval in the general meeting or lack of board authorisation to issue shares or lack of own shares in the Company) following an exercise of options, the company shall fulfil its obligations under the programme towards participants other than Swedish residents by way of making a cash payment equal to the excess, if any, of the share price over the strike price, multiplied by the number of exercisable options. The options will vest in three tranches during a three-year period, as presented in the table below. The options are exercisable during a window period after the release of the quarterly reports for the fourth and second quarters. Options that are not exercised within 5 years from the date of grant will lapse and become void. Percentage of option programme vesting Vesting date Expiry date 20% 19 November 2021 19 November 2025 30% 19 November 2022 19 November 2025 50% 19 November 2023 19 November 2025 The fair value of each option at grant date was calculated at NOK 4.59 per option. The Black-Scholes model was used for calculation of fair value and the following assumptions were used: Number of options 2 625 000 Number of potential shares 2 625 000 Contractual life 5 years Strike price 24.48 Share price 22.10 Expected lifetime 3.30 years Volatility 34.32% Interest rate 0.321% Dividend 0.00 The total value of the options granted in 2020 was EUR 1.1 million. EUR 0.6 million (0.7) of that was recognised as personnel costs during the year. In addition, EUR 0.6 million in income due to reversal of accrual (1.8 expense in 2021) was recognised during the year in personnel costs related to social security charges. The change in the number of options outstanding during the year is presented in the table below: 2022 2021 Outstanding as of 1 January 2 762 500 26250002 625 000 Granted during the year 40 000 305000305 000 Adjusted - 75007 500 Exercised -429 000 Terminated - -175000-175 000 Outstanding as of 31 December 2 373 500 27625002 762 500 Vested but no exercised 972 250 562500562 500 During the exercise window in March 2022, 429 000 shares were issued at a subscription price of 24.06. The average share price at the time of exercise was NOK 61.26. 136136 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 24 Earnings per share million EUR 2022 2021 Profit for the period attributable to parent company shareholders (million EUR) 34.4 35.7 Average number of shares 164 109 723 153336017153 336 017 Effect on options to employees 1 381 172 780351780 351 Diluted average number of shares 165 490 895 154116368154 116 368 Earnings per share (EPS), basic (EUR) 0.21 0.23 Earnings per share (EPS), diluted (EUR) 0.21 0.23 Earnings per share (EPS), basic (NOK) 2.12 2.37 Earnings per share (EPS), diluted (NOK) 2.10 2.36 EPS in NOK is calculated using the average rate in the period. The number shares outstanding have increased from 15666 610 804 to 1913491 347 992 compared to 31 December 2021 in three new share issues, one in March 2022, one in September 2022 and one in December 2022. Earnings per share is calculated by dividing profit attributable to parent company shareholders by the weighted number of ordinary shares during the period. In 2022, BEWI ASA distributed dividends of NOK 1 . 1 0 per share based on the results for the financial year of 2021. The dividends were distributed on 18 November 2022, following completion of the Jackon transaction in October. On 15 February 2023, the board of directors of BEWI proposed to pay a dividend of NOK 0.6 0 per share for the financial year of 2022. Note 25 Borrowings Interest-bearing liabilities million EUR 31 Dec 2022 31 Dec 2021 Non-current Bond loan 246.9 246.1 Liabilities to credit institutions 87.8 9.8 Liabilities leases 150.4 66.1 Other non-current liabilities 0.7 - Total long-term borrowings 485.8 322.0 Current Liabilities to credit institutions 69.5 3.0 Liabilities leases 20.1 13.0 Overdraft 22.8 0.8 Total current borrowings 112.4 16.7 Total borrowings 598.2 338.7 Specification of net debt Net debt by the end of the reporting period, million EUR 31 Dec 2022 31 Dec 2021 Interest-bearing liabilities 598.2 338.7 Cash and cash equivalents 47.5 -142.3 Net debt in including IFRS 16 550.7 196.4 Adding back IFRS 16 leasing liabilities -168.4 -76.1 Net debt excluding IFRS 16 382.3 120.3 Change in net debt, million EUR 31 Dec 2022 31 Dec 2021 Change in interest-bearing liabilities 259.4 117.2 Change in cash and cash equivalents Impact from cash flow for the period 91.9 -89.1 Impact from exchange differences 2.9 -1.8 Change in net debt including IFRS 16 354.3 26.3 Adding back change in IFRS 16 leasing liabilities -92.3 2.4 Change in net debt excluding IFRS 16 262.0 28.7 137137 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Change in interest-bearing liabilitiesties Bond loan Liabilities to credit institutions Liabilities leasing Factoring debt Overdraft Total Interest-bearing liabilities as of 31 December 2021 246.1 12.8 79.1 - 0.8 338.7 Cash flow affecting changes - - - - - - Borrowings - 62.3 - - 22.7 85.0 Repayment of loans -0.3 -3.8 - - -1.4 -5.5 Repayment of leasing liabilities - - -12.8 - - -12.8 Total cash flow in financing activities -0.3 58.5 -12.8 - 21.3 66.7 Changes not affecting cash flow - - - - - - Through acquisitions - 91.1 34.1 0.7 1.1 127.0 Through divestments - - -0.1 - - -0.1 Capitalised leasing - - 76.1 - - 76.1 Amortisation financing costs 1.1 - - - - 1.1 Exchange differences - -5.1 -6.0 - -0.4 -11.5 Total changes not affecting cash flow 1.1 86.0 104.1 0.7 0.7 192.6 Total changeotal change 0.8 144.5 91.3 0.7 22.0 259.4 Interest-bearing liabilities as of 31 December 2022 246.9 157.3 170.5 0.7 22.8 598.2 Change in interest-bearing liabilitiesties Bond loan Liabilities to credit institutions Liabilities leasing Factoring debt Overdraft Total Interest-bearing liabilities as of 31 December 2020 137.9 1.8 81.5 - 0.4 221.6 Cash flow affecting changes Borrowings 245.4 2.4 - - 0.3 248.1 Repayment of loans -140.0 -1.5 - - -0.4 -141.9 Repayment of leasing liabilities - - -11.4 - - -11.4 Total cash flow in financing activities 105.4 0.9 -11.4 - -0.1 94.8 Changes not affecting cash flow Through acquisitions - 10.3 3.0 - 0.5 13.8 Through divestments - - -0.6 - - -0.6 Capitalised leasing - - 5.4 - - 5.4 Amortisation financing costs 2.8 - - - - 2.8 Exchange differences 0.0 -0.2 1.1 - - 0.9 Total changes not affecting cash flow 2.8 10.1 8.9 - 0.5 22.3 Total changeotal change 108.2 11.0 -2.5 - 0.4 117.1 Interest-bearing liabilities as of 31 December 2021 246.1 12.8 79.1 - 0.8 338.7 138138 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Bond loans Frame Amount outstanding Date of issuance Maturity/redemtion date EUR 250 million EUR 250 million 3 September 2021 3 September 2026 The EUR 250 million bond, which is unsecured and linked to a sustainability framework, matures on 3 September 2026, with a possibility for BEWI to unilaterally decide on an early redemption after 3 March 2025 of 50 per cent of the bonds outstanding at that date. Net of financing costs, BEWI received EUR 245.4 million in cash from the bond issued during the year. The bonds are recognised under the effective interest method at amortised cost after deductions for transaction costs. Interest terms, as well as nominal interest rates and average interest rates recognised during the quarter are presented in the table below. Nominal interest Average interest Bond loan Interest terms 2022 2021 2022 2021 EUR 65 million Euribor 3 m + 3.15% 2.86-5.12% 2.58-2.60% 3.66% 3.09% Liabilities to credit institutions and factoring debt The group has a Revolving Credit Facility.The facility was increased during 2022 to a total of EUR 150 million (from 80 million) and is granted by two banks. As part of this facility on of the participating banks is providing an overfraft facility. As of 31 December 2022 the RCF was utilised by EUR equivivalent 59.8 million and interest range between 2.7% - 3.8% during the year and the overdraft was utilised with 6.3 million EUR equivivalent with an interest range of 0.7% - 3.1%. Interest-bearing liabilities in acquired subsidiaries are normally settled and refinanced internally after the acquisition. However, in a specific cases liabilities to credit institutions in acquired companies, including overdraft facilities, have not been subject refinancing post acquisition. Such liabilities to credit institutions have carried an interest in the range of 0.9% - 5.1% during 2022. As of 31 December 2022, a majority of the liabilities from aquired companies to credit institutions, as well as the ovedraft recognised as of that date, were attributable to the acquisition of Jackon Holding AS Liabilities leases For leases capitalised in accordance with IFRS 16, the interest rates used for discounting the future lease payments have been based on the Group’s bond trading and Euro benchmark spreads, adjusted for the fact that the lease liabilities are repaid over the lease-term in contrast to the bonds that are repaid in full at maturity. Each company or relevant business unit has been given a credit rating, derived from certain financial KPI’s, based on Moody’s methodology. These ratings have been applied to the spreads to arrive at the discount rates. Depending on the lease-term and the rating, the discount rates vary from 1.2-8.2% for contracts maturing within 1-3 years to 6.2-13.2% for contracts maturing after 10 years. For lease contracts already capitalised in accordance with IAS 17 prior to the transition to IFRS 16, the discount rates have remained unchanged and range from 1.90- 7.14%, corresponding to the implicit rates of the contracts. million EUR 31 Dec 2022 31 Dec 2021 Overdraft facility (equivalent amount in million EUR) 150 80 Overdraft utilised 59.8 - Covenants and security provided The revolving credit facility agreement and the terms and conditions for the bond loans state certain covenants that the Group has to comply with, referred to as Leverage Ratio and Interest Coverage Ratio. Leverage Ratio is defined as net debt to EBITDA and Interest Coverage Ratio as EBITDA to net finance charges, where both EBITDA and net finance charges are adjusted. EBITDA is adjusted for non-recurring items, as defined in the loan agreements. The impact of IFRS 16 on net debt and EBITDA is excluded in the covenant calculation. Compliance with the covenants is calculated on a regular basis with the respect to the revolving credit facility agreement, whereas compliance in the bond loan agreements is triggered by certain events, such as new financial indebtedness. The Group has not been in breach of any covenants in 2022 or 2021. The revolving credit facility is a super senior credit facility and the bond loan is subordinated the revolving credit facility. Liabilities to credit institutions and overdraft facilities not refinanced post acquisition, and arisen as a result of acquisitions in 2022, and some former aquisistions are subject to securities granted in the form of mortgages and pledges. The value at the balance sheet day of the securities provided, is presented in note 29 Pledged assets. Currency exposure Carrying amounts per currency (in millions) for the Group’s interest-bearing liabilities are as follows: 31 Dec 2022 31 Dec 2021 million EUR Incl. IFRS 16 Excl. IFRS 16 Incl. IFRS 16 Excl. IFRS 16 SEK 78.7 40.7 8.7 0.2 EUR 307.0 275.7 287.8 259.7 NOK 174.0 107.5 24.4 2.1 DKK 20.2 1.2 17.2 - GBP 17.4 3.8 - - Other 0.9 0.9 0.6 0.6 598.2 429.8 338.7 262.6 139139 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Maturity The tables below presents the maturity of the discounted cash flows of the group’s interest-bearing liabilities. As of 31 December 2022 < 1 yr. 1–2 yr. 2–5 yr. > 5 yr. Bond loans - - 246.9 - Liabilities to credit institutions 69.5 82.3 4.9 0.6 Liabilities leases according to definition in IAS 17 0.9 0.8 0.4 0.1 Additional liabilities leases due to IFRS 16 19.3 18.0 46.1 84.9 Other non current liabilities - - 0.7 - Overdraft 22.8 - - - Total 112.5 101.1 299.0 85.6 As of 31 December 2021 < 1 yr. 1–2 yr. 2–5 yr. > 5 yr. Bond loans - - 246.1 - Liabilities to credit institutions 3.0 2.7 7.1 0.2 Liabilities leases according to definition in IAS 17 1.3 0.8 0.8 0.1 Additional liabilities leases due to IFRS 16 11.1 9.6 25.2 30.2 Overdraft 0.8 - - - Total 16.2 13.1 279.2 30.3 Note 26 Pensions and similar obligations to employees The group provides defined benefit pension plans in Finland, Norway and in the UK. The defined benefit pension plans in the UK, which are closed for new participants, originate from the acquisition of Synbra and are related to Synbra’s previous operations in the UK. Due to contractual obligations, the group had to pay a lump sum to the UK funds in 2018, following the change of ownership of Synbra. As a result, the fair value of plan assets in one of the funds exceed the present value of the pension obligation and a net pension asset is recognised on the balance sheet. The net pension asset is not subject to asset ceiling limitations. The defined benefit pension obligations, calculated in accordance with the Projected Unit Credit Method, are, among other things, based on estimated salary increases, apart from the UK funds, which are closed for new participants and where the existing participants are no longer employed by the group. In addition to the defined benefit pension plans, the group also provides other long-term benefits in the Netherlands through a so called Jubilee plan, which entitles the participants salary benefits for long-term service. The Jubilee plan is calculated in accordance with the Projected Unit Credit Method and is presented below as Other long-term benefits. 140140 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 The amounts reported on the balance sheet have been calculated as follows: Defined benefit pension plans Other long-term benefits million EUR 31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021 Present value of funded obligations -32.4 -49.6 - - Fair value of plan assets 34.8 56.0 - - 2.3 6.4 - - Present value of unfunded obligations - 0.0 -0.9 -1.1 Net asset(+)/liability(-) as of 31 December 2.3 6.4 -0.9 -1.1 Net pension asset United Kingdom 2.6 6.7 - - 2.6 6.7 - - Pension obligations and other long-term benefits Netherlands - - -0.9 -1.1 Finland -0.2 -0.3 - - Norway 0.0 0.0 - - United Kingdom - - - - -0.2 -0.3 -0.9 -1.1 The amounts reported on the balance sheet and changes in the defined benefit pension plans during the year are as follows: Defined benefit pension plans Other long-term benefits 2022 2021 2022 2021 Costs of service during the current year -0.1 -0.1 -0.1 0.0 Past service cost - - - - Net Interest income/expense 0.1 0.0 0.0 0.0 Total reported in the income statement 0.1 -0.1 -0.1 0.0 Return on plan assets excluding amounts included in interest expenses/income -18.0 2.2 - - Actuarial gains/losses from changes in demographic assumptions -0.2 0.2 - - Actuarial gains/losses from changes in financial assumptions 14.8 1.4 - - Experience based gains/losses -0.8 0.2 - - Total reported in other comprehensive income -4.2 4.0 - - Defined benefit pension plans Other long-term benefits Change in present value of the obligation 31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021 As of 1 January -49.6 -50.7 -1.1 -1.1 Current service cost -0.1 -0.1 -0.1 0.0 Interest cost -0.9 -0.7 0.0 0.0 Actuarial gains/losses 13.8 1.8 - - Benefits paid 2.3 1.9 0.0 0.0 Settlements 0.0 1.7 0.2 - Exchange rate differences 2.0 -3.5 - - As of 31 December -32.4 -49.6 -0.9 -1.1 141141 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Defined benefit pension plans Other long-term benefits Change in fair value of plan assets 31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021 As of 1 January 56.0 52.5 - - Interest income 1.0 0.7 - - Return on plan assets excluding amounts included in interest expenses/income -18.0 2.2 - - Contributions by the employer 0.3 0.3 - - Benefits paid -2.3 -0.2 - - Settlements 0.0 -3.3 - - Exchange rate differences -2.2 3.9 - - As of 31 December 34.8 56.0 - - The most critical assumptions for the defined benefit pensions were: 31 Dec 2022 31 Dec 2021 United Kingdom Discount rate 4.70-5.00% 1.85–1.90% Salary increase n/a n/a Inflation (based on CPI and RPI assumption) 2.90-3.40% 3.10–3.60% Pension increase (based on CPI and RPI assumptions) 1.80-3.20% 2.25–3.45% Finland Discount rate 3.75% 1.00% Salary increase 3.10% 2.60% Inflation 2.60% 2.10% Cost of living adjustments for pensions in payment - - Norway Discount rate 3.20% 1.90% Salary increase 3.75% 2.75% G-regulering 3.50% 2.50% The range in assumed inflation in the United Kingdom reflects different assumptions used for CPI versus RPI. The range in assumed pension increase in the UK reflects different limits linked to years in which the pension was accrued and different inflation metrics applied for those limits. The most critical assumptions for other long-term benefits were: 31 Dec 2022 31 Dec 2021 Discount rate 3.40% 0.60% Salary increase 2.70% 2.20% The sensitivity in the net defined benefit pension asset/liability for changes in essential assumptions are presented below (minus equals decrease in net asset/increase in net liability). Change in fair value of plan assets, million EUR Change Increase in assumption Decrease in assumption Discount rate 0.50% 1.7 -1.8 Salary increase 0.50% 0.0 0.0 Pension increase 0.25% -1.1 1.0 For the financial year of 2023, the defined pension plan fees are expected to amount to EUR 0.3 million. Plan asset allocation 31 Dec 2022 31 Dec 2021 Bonds 12.3 9.5 Equities 5.7 18.0 Hedge funds and alternatives 15.2 26.3 Insurance contracts 0.9 1.1 Real estate 0.1 0.1 Cash 0.6 1.0 34.8 56.0 Analysis of expected undiscounted payments of defined benefits 31 Dec 2022 31 Dec 2021 Within 1 year 2.1 2.0 1–2 years 2.0 2.2 3–5 years 6.8 6.9 5 years or more 43.7 49.9 142142 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 27 Other provisions million EUR Restoration of environment Restructuring measures Health benefits Staff benefits Guarantee Total As of 1 January 2021 0.1 0.4 0.1 0.0 0.1 0.7 Reported in the income statement: – additional provisions - 0.9 - - 0.1 1.0 Exchange differences - 0.0 - - - 0.0 Utilised durig the year - -0.7 -0.0 -0.1 -0.1 -0.9 As of 31 December 2021 0.1 0.6 0.0 0.0 0.1 0.9 million EUR Restoration of environment Restructuring measures Health benefits Staff benefits Guarantee Total As of 1 January 2022 0.1 0.6 0.0 0.0 0.1 0.9 Reported in the income statement: – additional provisions 0.0 0.5 - - 0.2 0.7 Exchange differences - 0.0 - - 0.0 0.0 Utilised durig the year - -1.1 -0.0 - -0.1 -1.2 As of 31 December 2022 0.1 0.0 - 0.0 0.3 0.4 million EUR 31 Dec 2022 31 Dec 2021 Long-term provision 0.1 0.1 Short-term provision 0.2 0.8 Total provision 0.4 0.9 Note 28 Accrued expenses and deferred income million EUR 31 Dec 2022 31 Dec 2021 Accrued wage debt 8.6 4.6 Accrued social security fees 4.6 3.8 Accrued holiday pay including social security fees 13.9 11.6 Accrued customer bonuses 20.0 8.7 Accrued interest 1.7 0.7 Other items 48.4 10.9 Total 97.3 40.2 Note 29 Contingent liabilities million EUR 31 Dec 2022 31 Dec 2021 Guarantees to suppliers 21.7 18.6 Total 27.7 18.6 143143 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 30 Pledged assets million EUR 31 Dec 2022 31 Dec 2021 Business mortgages 2.9 2.4 Property mortgages 37.8 35.0 Other pledged assets 51.3 26.7 Total 92.0 64.0 Interest-bearing liabilities in acquired subsidiaries are normally settled and refinanced internally after the acquisition. However, in specific cases liabilities to credit institutions in acquired companies, including overdraft facilities, have not been refinanced post acquisition. The pleadged assets in 2021 and 2022 are attributable to those liabilities. Note 31 Related parties Christian Bekken, CEO of BEWI ASA, is together with other members of the Bekken family a majority shareholder of the company through Bekken Invest AS and BEWI Invest AS. Other related parties are the two 34 per cent owned associated companies Hirsch France SAS and Hirsch Porozell GmbH. Transactions with those companies are presented in the tables below. Inoplast S.R.O. was owned to 34 per cent for the full year 2022 and is included in the table below with regards to positions from the income statement. From 31 December 2022, Inoplast S.R.O. was consolidated as a subsidiary. Jablite Group Ltd was owned to 49 per cent until 30 May 2022 and is up until this date included in the table below. From 1 June 2022 Jablite Group Ltd is consolidated as a subsidiary. Information on remuneration of management and the board of directors is found in note 6. The number of shares in the company held by management and the board of directors as of 31 December 2022 is presented in the table below. Board of Directors Person Title Shares Options Shares held by related parties Gunnar Syvertsen 1 Chairman 5 952 - 155 729 Christina Schauman Director 5 952 - 187 500 Stig Waernes 2 Director - - - Anne-Lise Aukner Director - - - Rik Dobbeleare Director 98 497 - - Andreas M. Akselsen 2 Director - - 32 070 000 3 1 Gunnar Syvertsen is chairman of the board of BEWI Invest AS, majority owned by the Bekken family and the owner of 97 958 328 shares per 31.12.2022. BEWI Invest is listed as a related party to Christian Bekken, but is also related to Mr Syvertsen. 2 Stig Wærnes left the board upon completion of the Jackon transaction 19 October 2022, and was replaced by Andreas M. Akselsen. Shares h3 Shares held by HAAS AS, the investment company owned by the Akselsen family. 144144 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Executive Management Person Title Shares Options Shares held by related parties Christian Bekken 1 Chief Executive Officer 2595225 952 200 000 97 958 328 Marie Danielsson Chief Financial Officer 185 452 250 000 - Jonas Siljeskär Chief Operating Officer 124126124 126 200 000 - Petra Brantmark 2 General Counsel 8 902 91 452 5 458 Charlotte Knudsen 2 Director of IR and Communications 33 681 91 452 Roger Olofsson 2 CHRO 5 952 125 000 1 Christian Bekken owns 25952 shan owns 25 952 shares directly and is part of the Bekken family that holds 979583ds 97 958 328 shares (directly or indirectly) through the family’s indirect ownership in BEWI Invest AS. 2 Petra Brantmark, Roger Olofsson and Charlotte Knudsen became part of the Executive management team at 1 st of October 2022. Transactions impacting the income statement million EUR 2022 2021 Sale of goods to: HIRSCH France SAS 25.6 18.8 HIRSCH Porozell GmbH 46.2 45.3 Jablite Group Ltd 3.6 7.9 Inoplast s.r.o. 4.3 2.9 Bekken owned companies 0.4 0.1 Total 80.1 74.9 Other income from: Inoplast s.r.o. 0.6 - Bekken owned companies 0.3 - Total 0.9 - Purchase of goods from: Inoplast s.r.o. 4.5 3.4 Bekken owned companies 4.2 3.1 Total 8.7 6.5 Interest Income from: Hirsch France SAS 0.1 0.1 Jablite Group Ltd 0.0 0.1 Total 0.1 0.2 Rental expenses to: Bekken owned companies 11.4 8.8 Total 11.4 8.8 Other external costs to: Bekken owned companies 0.1 0.1 Total 0.1 0.1 145145 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 On 23 December 2021, the wholly owned subsidiary Biobe AS was sold to a company owned by members of Bekken family for a consideration of EUR 6.2 million, of which EUR 4.2 million was settled in cash and EUR 2.0 million in a short-term loan to the buyer. The loan was settled on 1 June 2022. The transactions were conducted on normal market terms. Transactions impacting the balance sheet million EUR 31 Dec 2022 31 Dec 2021 Non-current receivable Bekken owned companies 0.1 0.1 HIRSCH France SAS - 2.3 Jablite Group Ltd - 1.8 Total 0.1 4.2 Current receivables Bekken owned companies 1.8 4.1 HIRSCH Porozell GmbH 0.1 0.1 Inoplast s.r.o. - 0.6 Total 1.9 4.8 Current liabilities Bekken owned companies 0.3 - Inoplast s.r.o. - 0.6 Total 0.3 0.6 Interest terms for the lending to associated companies are presented in note 16 Shares in associates. Note 32 Adjustments for non-cash items, etc. million EUR 31 Dec 2022 31 Dec 2021 Depreciations, amortisations and write-downs 47.2 37.8 Change in provisions for pension liabilities -0.5 -0.5 Change in other provisions -0.5 0.2 Share of income from associates net of dividend received -1.1 -4.5 Effect of share-based incentive programme 0.6 0.7 Capital gain from sale of assets and business -1.2 -1.1 Capital gain from revaluation of shares in associates -10.7 - Settlement agreement - European Comission 17.2 - Other -0.5 - Total 50.5 32.6 146146 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 33 Subsequent events Measures to adjust capacity and reduce costs in Nordic Insulation Following the combination with Jackon, and in response to the current market conditions, BEWI has initiated measures to optimize its production footprint and reduce capacity to current demand. This includes reduced shifts at several facilities, and temporary closure of one facility. In addition, the company has taken measures to reduce the cost base of its Nordic Insulation division. In total, the company expects annual savings of approximately EUR 5 million. Exercise of options and increase of share capital On 18 February 2023, BEWI announced that, following exercise of options by option holders under the company’s share option programme, the board had resolved to increase the Company’s share capital by NOK 374 298, by the issuance of 374 298 new shares at a subscription price of NOK 22.96 per share by use of the authorisation granted by the general meeting on 2 June 2022. Agreement to divest real estate for NOK 348 million On 31 March 2023, BEWI announced, with reference to the real estate transaction announced on 30 June 2022, that the company had entered an agreement with KMC Properties ASA for the divestment of four properties, of which three properties in Finland and one in Denmark valued at NOK 348.3 million. The purchase price will be settled in the form of an amount equal to approx. NOK 200.0 million in cash and NOK 148.3 million in 20 235 931 new shares in KMC Properties at a subscription price of NOK 7.33 per share. KMC Properties has an exclusive right to acquire the remaining part of the portfolio until 30 June 2023. Through the acquisition of the 20 235 931 new shares in KMC Properties, BEWI will increase in shareholding to a total of 28 807 359 shares corresponding to 8.4 per cent of the issued share capital of KMC Properties. 147147 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Income statement of the parent company million NOK Note 2022 2021 Operating income Net sales 3 5.0 4.0 Other operating income 0.0 0.7 Total operating income 5.0 4.7 Operating expenses Other external costs 13 -47.9 -39.5 Personnel costs 4 -14.9 -17.1 Other operating costs -0.1 - Total operating expenses -62.9 -56.6 Operating profit -57.8 -51.9 Financial income 181.2 115.5 Financial expense -154.1 -22.7 Financial income and expense - net 5 27.1 92.8 Profit before taxes -30.7 40.8 Income tax 6 6.9 -7.6 Net profit for the year -23.8 33.3 148148 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Statement of financial position of the parent company million NOK Note 31 Dec 2022 31 Dec 2021 ASSETS Non-current assets Financial assets Shares in subsidiaries 7 6 162.6 3091.2 Other financial assets 0.0 0.0 Receivables from group companies 11 1 658.6 1573.3 Total financial assets 7 821.1 4664.6 Total non-current assets 7 821.1 4664.6 Current assets Current receivables Receivables from group companies 11 558.1 160.4 Accounts receivables 0.2 - Prepaid expenses and accrued income 2.2 22.5 Total current receivables 560.4 182.8 Cash and cash equivalents 8 5.5 877.7 Total current assets 565.9 1060.5 TOTAL ASSETS 8 387.0 5725.1 149149 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Statement of financial position of the parent company million NOK Note 31 Dec 2022 31 Dec 2021 EQUITY AND LIABILITIES Equity Restricted equity Share capital (191 347 992 shares) 9,10 191.3 156.6 Total restricted equity 191.3 156.6 Non-restricted equity Additional paid-in capital 10 4 426.2 2969.5 Profit or loss brought forward 10 0.0 0.0 Net profit or loss for the year 10 -23.8 33.3 Total non-restricted equity 4 402.4 3002.7 Total equity 4 593.7 3159.3 Non-current liabilities Deferred tax liability 0.6 7.5 Non-current bond loan 2 595.7 2454.5 Liabilities to Group company 11 852.6 - Total non-current liabilities 3 448.9 2462.0 Current liabilities Liabilities to group companies 11 320.3 71.8 Account payables 3.7 10.3 Other short-term liabilities 1.0 2.5 Accrued expenses and deferred income 19.3 19.2 Total current liabilities 344.4 103.8 TOTAL EQUITY AND LIABILITIES 8 387.0 5725.1 Trondheim, Norway, 24 April 2023 The board of directors and CEO BEWI ASA Gunnar Syvertsen Chair of the Board Anne-Lise Aukner Director Rik Dobbelaere Director Andreas Akselsen Director Kristina Schauman Director Christian Bekken CEO 150150 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Cash flow statement for the parent company million NOK Note 2022 2021 Operating cash flow Income before financial items -57.8 -51.9 Adjustments for non-cash items, etc 0.0 0.4 Interest paid and financing costs -88.4 -16.2 Interest received 0.0 19.3 Dividend received 71.2 35.0 Operating cash flow before changes to working capital -75.0 -13.4 Cash flow from working capital changes Increase/decrease in current receivables 65.9 -1624.5 Increase/decrease in operating debt 230.9 43.7 Total change to working capital 296.8 -1580.8 Operating cash flow 221.7 -1594.2 Cash flow from investment activities Acquisitions of subsidiary -1 835.3 -184.5 Cash flow from investment activities -1 835.3 -184.5 million NOK Note 2022 2021 Cash flow from financing activities Borrowings, net of transaction costs 11 852.6 2453.0 New share issue, net of transaction costs 9.5 192.8 Group contribution 89.7 - Dividend 10 -210.5 -65.3 Cash flow from financing activities 741.3 2580.4 Cash flow for the period -872.2 801.8 Opening cash and cash equivalents 877.7 75.9 Closing cash and cash equivalents 5.5 877.7 151151 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Parent company Accounting principles and notes to the accounts Note 01 General information The parent company is a public limited company registered in Norway, with head office located in Trondheim, Norway, and address Dyre Halses gate 1A, 7042 Trondheim. Note 02 Summary of key accounting principles for the parent company The key accounting principles used in this annual report are stated below. The principles have consistently been used for all reported financial years, unless otherwise specified. The annual report for the parent company is prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway. The accounts are stated below, for which the parent company applies accounting principles differing from those of the group, as described in note 2 to the consolidated accounts. The annual report has been prepared in accordance with the cost value principle. The preparation of reports requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the parent company’s accounting principles. The areas involving a higher degree of judgement or complexity or areas for which assumptions and estimates are significant to the annual report, are stated in note 4 to the consolidated accounts. The parent company is through its activities exposed to several different financial risks: market risk (currency risk and interest rate risk), credit risk and liquidity risk. The parent company’s comprehensive financial risk manage- ment is focused on the unpredictability of the financial markets and strives to minimise any adverse effect on the consolidated profits. For more information regarding financial risks, see note 3 to the consolidated accounts. The parent company applies accounting principles differing from those of the group for the areas are stated below: Layout The income statement and statement of financial position is compliant with the layout stipulated in the Norwegian Accounting Act. The statement of changes to equity observes the layout of the consolidated accounts, but must contain the columns stated in the Norwegian Accounting Act. Furthermore, differences arise relating to designations, in comparison with the consolidated accounts, mainly concerning the financial income/expense and equity. Shares in subsidiaries Shares in subsidiaries are reported at acquisition cost less any impairment. The acquisition cost includes any cost related to the acquisition and any additional purchase price. A calculation of the recoverable amount is undertaken, in the event of an indicator of impairment of the shares in a subsidiary. Should the recoverable amount be below the carrying amount, impairment is made. Impairments are reported in Profit from participations in group companies. Financial instruments Financial instruments are reported at acquisition cost. Financial assets acquired for short-term holding will in subsequent periods be reported at the lower of acquisition cost or market value. 152152 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 03 Net sales The parent company’s revenue derive solely from one business area and is mainly related to intra-group administrative services. Note 04 Employee remuneration etc. million NOK 2022 2021 Salary and other remuneration -12.8 -11.9 Social security expenses -1.2 -4.5 Pension costs - defined contribution plans -0.5 -0.2 Total remuneration to employees -14.5 -16.7 The company is obliged to have an occupational pension scheme in accordance with the Act on Mandatory Occupational Pensions. The company pension schemes satisfy the requirement of this Act. Salary and other remunerations and pension costs for directors of the board, CEO´s and other senior executives million NOK 2022 2021 Salary and other remuneration -4.6 -2.4 Bonus -0.9 -0.6 Pension costs -0.1 0.0 Total remuneration -5.6 -3.0 153153 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Average number of employees 2021 Average number of employees Whereof men Norway 6 3 2022 Average number of employees Whereof men Norway 8 4 In November 2020, BEWI ASA implemented a share-based incentive programme, entitling the participants to subscribe for shares in BEWI ASA during a three-year period. The purpose of the programme is to further align the interests of the company and its shareholders by providing incentives in the form of awards to employees to motivate them to contribute materially to the success and profitability of the Company. The features of the programme are further described in note 23 to the group. The CEO of BEWI ASA was granted 250000 share options. Severence pay Subject to the CEO’s employment agreement, there is a notice period of 12 months if the agreement is terminated by the company and a notice period of 6 months if the agreement is terminated by the employee. The employee is entitled to receive unchanged salary and other fringe benefits during the period of notice, however the salary is deductable to other income. Note 05 Interest income and interest expense and similar items million NOK 2022 2021 Interest income, group companies 64.7 25.8 Exchange gains 0.0 - Group contribution 116.4 89.7 Total interest income and similar profit or loss items 181.2 115.5 Interest expense -92.2 -21.0 Interest expense, group companies -11.8 -0.5 Exchange loss -50.1 -1.2 Other financial expenses - - Total interest expense with similar profit or loss items -154.1 -22.7 Total financial income and expense - net 27.1 92.8 154154 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 06 Income tax on the profit for the year The income tax attributable to the income before taxes differs from the theoretical amount that would have arisen from the application of the tax rate in Norway for the income of the parent company as follows: million NOK 2022 2021 Income before taxes -30.7 40.8 Income tax calculated using the Norwegian tax rate (22%) 6.8 -9.0 Tax effects attributable to: Non-deductible costs 0.0 -0.2 Deductible expenses not recognised in income statement 0.2 1.6 Total tax reported 6.9 -7.6 Unutilised tax loss carry forwards for which no deferred tax assets has been reported amount to MNOK 6.3 (1.6). Note 07 Shares in subsidiaries and associates Subsidiaries million NOK 31 Dec 2022 31 Dec 2021 As of 1 January 3 091.2 2 910.6 Acquisition of subsidiaries 3 494.5 180.6 Dividend from subsidaries -423.1 - As of 31 December 6 162.6 3 091.2 BEWI ASA bought three new directly owned subsidiaries in 2022. For more information about the acqusitions find information in group Note 14 - Business acquisitions. Name Reg. no. Reg. office/ country Proportion of shares held by the parent (%) Carrying amount 31 Dec 2022 Carrying amount 31 Dec 2021 Directly owned BEWI Synbra Group AB 556972 -1128 Solna, Sweden 100 2 487.5 2 910.6 BEWI Poland Spotka zoo 0000722895 Poland 100 181.7 180.6 BEWI Circular Holding AS 928 989 682 Norway 100 283.9 - Jackon Holding AS 989 087 177 Norway 100 2 940.7 - UAB Baltijos Polistirenas 160 421 364 Lithuania 100 268.8 - Sum directly owned 6 162.6 3 091.2 155155 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Subsidary Reg. no. Reg. office / country Proportion of shares held by the parent (%) Indirectly owned BEWI Circular Belgium bvba BE 0465.783.904 Belgium 100 BEWI Circular Holding Belgium BE 00641.986.778 Belgium 100 BEWI Circular Trading Belgium bvba BE 0875.717.582 Belgium 100 Jackon Insulation N.V H.T.R.058089 Belgium 100 Kemisol NV BE 0464.536.859 Belgium 100 N.V. Internationaal Vervoer Brants Vallet BE 0400.670.970 Belgium 100 N.V. Kem-Products NV BE 0448.483.062 Belgium 100 Berga Recycling Inc. 7789815 Canada 100 Inoplast S.R.O 27877574 Czech Republic 100 BEWI Cellpack A/S 25 85 91 54 Denmark 100 BEWI Circular Denmark A/S 41 40 69 84 Denmark 100 BEWI Denmark A/S 31 86 7304 Denmark 100 Jackon DK A/S 20 04 79 41 Denmark 100 BEWi Cabee Oy 2083942-9 Finland 100 BEWi M-plast Oy 0506033-6 Finland 100 BEWi RAW Oy 10974747-6 Finland 100 Jackon Finland Oy 23525547 Finland 100 Jackon Insulation France S.a.r.l 501839-N France 100 Izoblok GmbH HRB 508966 Germany 64.28 Jackon Application GmbH DE318140659 Germany 100 Jackon GmbH DE19139400 4 Germany 100 Jackon Insulation GmbH DE126959786 Germany 100 BEWI Iceland ehf. 620818-0890 Iceland 85 Besto Verpakkingsindustrie BV 5034571 Netherlands 100 BEWI RAW BV 20033648 Netherlands 100 Ertecee BV 6010160 Netherlands 100 Genevad Netherlands BV 70824312 Netherlands 100 IsoBouw Systems BV 17046081 Netherlands 100 Moramplastics BV 9036097 Netherlands 100 Subsidary Reg. no. Reg. office / country Proportion of shares held by the parent (%) Poredo BV 71961577 Netherlands 75 Poredo Holding BV 18051893 Netherlands 75 Poredo Logistics BV 88096645 Netherlands 75 Stramit BV 17023362 Netherlands 100 Synbra BV 20080670 Netherlands 100 Synbra Holding BV 20095683 Netherlands 100 Synbra International BV 20095676 Netherlands 100 Synbra Propor BV 67056849 Netherlands 90 Synprodo BV 18115 693 Netherlands 100 Synprodo Produktie BV 10012456 Netherlands 100 BEWI Building & Industry AS 912 038 084 Norway 100 BEWI Circular AS 922 724 385 Norway 100 BEWI EPS Norway AS 928 878 090 Norway 100 BEWI Foil AS 977 051 371 Norway 100 BEWI Foods AS 979 574 193 Norway 100 BEWi Insulation Norway AS 986795 693 Norway 100 BEWI Norplasta AS 989 953 133 Norway 100 BEWI Norway AS 995 172 895 Norway 100 Jackon AS 913 019 334 Norway 100 Jackon Holding AS 989 087 177 Norway 100 Trondhjems Eskefabrikk AS 960 551 710 Norway 100 Izoblok S.A 00000388347 Poland 64.28 BEWI Circular Portugal, LDA 515767832 Portugal 66 Plastimar SA 508413770 Portugal 100 Aislamientos y Envases S.L B03173820 Spain 80 BEWI I&P Spain Holding S.L.U B72746423 Spain 100 Plasexpandido SL B36900157 Spain 100 BEWi Automotive AB 559102-5332 Sweden 100 BEWi Circular Sweden AB 556628-9178 Sweden 100 BEWi Dorotea AB 556669-9434 Sweden 100 156156 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Subsidary Reg. no. Reg. office / country Proportion of shares held by the parent (%) BEWi Insulation AB 556541-7788 Sweden 100 BEWi Packaging AB 556961-3309 Sweden 100 Genevad Holding AB 556707-1948 Sweden 100 Jackon AB 556383-5742 Sweden 100 Norplasta AB 556649-7821 Sweden 100 Jackon Insulation Switzerland AG CH 400.3.034.347-2 Switzerland 100 Jablite Ltd 12644570 United Kingdom 100 Jackon Holding UK Ltd 1033313 United Kingdom 100 Jackon UK Ltd 8235666 United Kingdom 100 Synbra Holding UK Ltd 9502640 United Kingdom 100 Volker Gruppe Ltd NI627429 United Kingdom 51 Jablite Group Ltd 124641113 United Kingdom 100 Styropack Ltd 12644682 United Kingdom 100 Berga Circular Holding US Inc 6770534 USA 100 Berga Properties LLC Delaware USA 100 Berga Recycling USA Inc Delaware USA 100 Gates Holding USA Inc Delaware USA 100 Associates Name Reg. no. Reg. office / country Proportion of shares held by the parent (%) Indirectly owned BEWI EPS ehf 580121-1600 Iceland 49 E&D AB 556935-9291 Sweden 49.8 HIRSCH France SAS 92044 France 34 HIRSCH Porozell GmbH FN 117 2 55i Germany 34 Remondis Technology SP Zoo 0.34 Poland 34 Other shares and participations Name Reg. no. Reg. office / country Proportion of shares held by the parent (%) Indirectly owned Polystyrene Loop Cooperatief U.A. 68399812 Netherlands 13.8 Polystyvert Inc. N/A Canada 3.71 Note 08 Cash and bank balances million NOK 31 Dec 2022 31 Dec 2021 Restricted cash 0.7 0.6 Other cash and bank balances 4.8 877.1 Total 5.5 877.7 Note 09 Share capital For information regarding the share capital, see note 22 to the consolidated accounts. 157157 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 10 Equity Restricted equity Non-restricted equity million NOK Share capital Additional paid-in capital Accumulated profit (incl net profit/loss for the year) Total Balance carried forward as of 31 December 2020 148.4 2 815.7 3.3 2 967.4 New share issue 8.2 215.7 - 223.9 Dividend - -62.0 -3.3 -65.3 Net profit for the year - - 33.3 33.3 Balance carried forward as of 31 December 2021 156.6 2 969.5 33.3 3 159.3 New share issue 34.7 1 633.9 - 1 668.7 Dividend - -177.2 -33.3 -210.5 Net loss for the year - - -23.8 -23.8 Balance carried forward as of 31 December 2022 191.3 4 402.4 -23.8 4 593.7 Note 11 Receivables and liabilities million NOK 31 Dec 2022 31 Dec 2021 Balance sheet assets Financial assets measured at amortised cost Non-current receivables from group companies 1 658.6 1573.3 Current receivables from group companies 558.1 160.4 Total 2 216.6 1733.7 Balance sheet liabilities Financial liabilities measured at amortised cost Bond loan 2 595.7 2454.5 Non-current liabilities to group companies 852.6 - Current liabilities to group companies 320.3 71.8 Total 3 768.6 2526.3 The company has no liabilities with maturity over five years. Bond loans Frame Amount outstanding Date of issuance Maturity/redemtion date EUR 250 million EUR 250 million 3 September 2021 3 September 2026 As of December 2022, BEWI ASA has one bond loan outstanding. The bond is unsecured and linked to a sustainablilty framwork, matures on 3 September 2026, with the possibility for BEWI ASA to unilaterally decide on early redemption after 3 March 2025 of 50 per cent of the bond outstandning at that date. The main term for the bond outstanding during the year is presented in the table below. Bond loan Interest terms Nominal interest 2022 Average interest 2022 EUR 250 million Euribor 3 m + 3.15% 2.58-5.12% 3.66% 158158 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 12 Related parties Christian Bekken, CEO of BEWI ASA, is together with other members of the Bekken family a majority shareholder of the company through BEWI Invest AS and Bekken Invest AS. More information on related party transactions is reported in note 31 to the consolidated accounts. Information on remuneration of management and the board of directors is found in note 6 in the consolidated accounts. Note 13 Remuneration to auditors million NOK 2022 2021 The audit assignment -1.3 -1.0 Audit activites other than the audit assignment -0.3 -0.6 Tax advice - - Other services -7.2 -0.8 Total remuneration to auditors -8.7 -2.4 For 2021 and 2022 audit activities other than the audit assignment from PwC and other services mainly includes costs related to the Jackon transaction. 159159 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 To the General Meeting of BEWI ASA Independent Auditor’s report Report on the Audit of the Financial Statements Opinion We have audited the financial statements of BEWI ASA, which comprise: • the financial statements of the parent company BEWI ASA (the Company), which comprise the statement of financial position as at 31 December 2022, the income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and • the consolidated financial statements of BEWI ASA and its subsidiaries (the Group), which comprise the statement of financial position as at 31 December 2022, the comprehensive income statement, statement of changes in equity and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion: • the financial statements comply with applicable statutory requirements, • the financial statements give a true and fair view of the financial position of the Company as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and • the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accord- ance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no pro- hibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of the Company for 3 years from the election by the general meeting of the shareholders on 29 July 2020 for the accounting year 2020. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The Group continues to acquire companies and has acquired seven companies during 2022. Consequently, Accounting for business combinations is just as important for this year’s audit, as it was in the previous year’s audit. The acquisitions regularly lead to recognition of assets such as trademarks and goodwill. Impairment testing of goodwill and intan- gible assets with an indefinite useful life therefore continue to represent an important area for our audit. 160160 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Key Audit Matters How our audit addressed the Key Audit Matter Impairment testing of goodwill and intangible assets with an indefinite useful life Goodwill and trademark are significant assets in the Group’s balance sheet. The carrying amount of goodwill and trademark amount to EUR 262.8 million and EUR 48.1 million respectively on December 31, 2022. No impairments was recognised in 2022. Impairment testing requires determination of recoverable amounts of goodwill and trademarks, which is depend- ent on, among other, estimated future income. We focused on this area due to the significance of the amounts involved and because the impairment test requires application of management judgement related to assumptions such as projected future revenues and costs and discount rate used. The Group’s principles and methods for valuation of goodwill and trademark are described in notes 2.4, 4.1 and note 12 to the consolidated financial statements. We obtained an understanding of management’s process related to valuation of goodwill and trademark. We reviewed management’s documentation for impairment testing and considered whether the valuation model applied by management contained the elements and methodology required by IFRS. We found the model to be reasonable and in accordance with the requirements. We also assessed the logical structure and tested mathematical accuracy of the model without finding material deviations. We examined how management identified cash-generating units and compared this to how BEWI follows up goodwill and trademark internally. Further we evaluated the reasonableness of the assumptions applied and management’s analysis related to changes in significant parameters, which could lead to a need for impairment. We challenged management’s use of assumptions related to projected future revenue and costs by comparing these against historic results and approved budgets. We found that the assumptions were aligned with historic results and approved budgets. We also found that the applied growth assumptions were reasonable. Additionally, we assessed management’s forecasting abilities by comparing prior year budgets and forecasts to actual results, and found no material deviations. The discount rate used was compared to empirical data and expectations about the future return, relevant risk premium and gearing ratio. We found that the used discount rate was reasonable. We also considered whether the information provided in notes 2.4, 4.1 and 12 to the consolidated financial statements met the IFRS requirements according to IAS1. 161161 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Key Audit Matters How our audit addressed the Key Audit Matter Accounting for business acquisitions The Group’s principles and methods for accounting for business acquisitions are described in notes 2.2, 2.4, and note 14 to the consolidated financial statements. During the past year, BEWI has made seven business acquisitions, of which the acquisition of the Norwegian fami- ly-owned company Jackon Holding, the Baltic company UAB Baltijos Polistirenas (“Balpol”) and the remaining 51% acquisition of Jablite Group Ltd, becoming 100% owner of the company, were the most significant ones. For each business acquisition, management prepared a purchase price allocation (PPA) analysis in which the dif- ference between the net assets in the acquired company and the purchase price was allocated to identified assets from the acquired company. Trademarks and property, plant and equipment were among the identified assets. The residual was allocated to goodwill. To determine the fair value of the identified intangible assets, management used judgement and performed calculations based on expectations about the acquired companies’ future development. The distribution of values in the PPA may have a significant impact on the financial statements. We obtained and reviewed the PPAs and obtained an understanding of how management identified assets to which the purchase price was allocated, including management’s calculation of the related goodwill. We obtained and examined the acquisition agreements, evaluated the terms of the agreements, and had extensive discussions with management. We tested the agreed cash considerations against bank receipts. To challenge management’s judgment, we examined the acquisition analyses with emphasis on methods and assump- tions used for identifying and valuing intangible assets such as trademark. We traced the information in the PPAs to the acquired entities’ financial statements. We tested the mathematical accuracy of the calculations and challenged man- agement’s allocations based on our expectations from the underlying business drivers in the acquired entities. Based on our audit procedures we found the methods and assumptions to be reasonable. We also considered if the relevant notes 2.2, 2.4 and note 14 gave proper relevant information and found the informa- tion and explanations provided to be sufficient. 162162 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements. In connection with our audit of the financial state- ments, our responsibility is to read the Board of Directors’ report and the other information accom- panying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other informa- tion accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the finan- cial statements otherwise appear to be materially misstated. We are required to report if there is a mate- rial misstatement in the Board of Directors’ report or the other information accompanying the financial statements. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report • is consistent with the financial statements and • contains the information required by applicable statutory requirements. Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate Social Responsibility. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and true and fair view of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclos- ing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting unless manage- ment either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exer- cise professional judgment and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material misstate- ment of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit pro- cedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and the Group’s internal control. • evaluate the appropriateness of accounting pol- icies used and the reasonableness of accounting estimates and related disclosures made by man- agement. • conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause 163163 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 the Company and the Group to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. • obtain sufficient appropriate audit evidence regarding the financial information of the enti- ties or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors regard- ing, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a state- ment that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements Report on Compliance with Requirement on European Single Electronic Format (ESEF) Opinion As part of the audit of the financial statements of BEWI ASA, we have performed an assurance engage- ment to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name BEWI-2022-12-31-en.zip, have been prepared, in all material respects, in com- pliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format, and iXBRL tagging of the consoli- dated financial statements. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF regulation. Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor’s Responsibilities For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/ revisjonsberetninger Trondheim, 24 April 2023 PricewaterhouseCoopers AS Kjetil Smørdal State Authorised Public Accountant (This document is signed electronically) 164164 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Reconciliation alternative performance measures Alternative performance measures not defined by IFRS million EUR 2022 2021 Operating income (EBIT) 68.0 67.8 Amortisations 9.7 7.6 EBITA 77.7 75.4 Items affecting comparability 18.3 3.4 Adjusted EBITA 96.1 78.8 EBITA 77.7 75.4 Depreciations 37.5 30.1 EBITDA 115.2 105.5 Items affecting comparability 18.3 3.4 Adjusted EBITDA 133.6 109.0 Adjusted EBITA Rolling 12 months 96.1 78.8 Average capital employed 629.1 409.6 Return on average capital employed (ROCE) 15.3% 19.2% Items affecting comparability million EUR 2022 2021 Severance, integration and restructuring costs -1.6 -0.9 Transaction costs -9.2 -4.4 Capital gains/losses from sale of fixed assets 2.3 0.0 Capital gain/losses from sale of subsidiary -3.3 1.0 Capital gain from sale of associated company 10.7 - Recognition of negative goodwill in associate - 0.9 Settlement agreement – European Commission -17.2 - Total -18.3 -3.4 165165 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Revenue bridge: Change in net sales from corresponding periods in 2021 million EUR RAW % Insulation % P&C % Circular % Unallocated % Intra-group revenue Total net sales % 2021 347.9 195.4 295.6 24.0 0.1 -114.9 748.2 Acquisitions 12.5 3.6% 108.3 55.4% 62.2 21.0% 28.3 118.0% - - -10.6 200.7 26.8% Of which Jackon 12.5 3.6% 38.6 19.7% 10.0 3.4% 0.0 0.0% 0.0 0.0% -7.1 53.9 7.2% Other 0.0 0.0% 69.8 35.7% 52.1 17.6% 28.3 118.0% 0.0 0.0% -3.5 146.7 19.6% Divestments - - -18.1 -9.2% - - - - - - - -18.1 -2.4% Currency - - -1.0 -0.5% -0.2 -0.1% -0.5 -2.1% 0.0 -10.3% -1.7 -3.5 -0.5% Organic growth 57.6 16.6% 49.2 25.2% 34.4 11.6% 11.3 46.9% 0.2 208.2% -29.6 123.1 16.5% Total increase/ decrease 70.1 20.1% 138.5 70.8% 96.3 32.6% 39.1 162.7% 0.2 197.9% -41.9 302.2 40.4% 2022 418.0 333.9 391.9 63.1 0.3 -156.8 1 050.4 EBITDA bridge: Change in adjusted EBITDA from corresponding periods in 2021 million EUR RAW % Insulation % P&C % Circular % Unallocated % Total adjusted EBITDA % 2021 54.1 21.6 40.3 0.6 -7.6 109.0 Acquisitions 1.2 2.2% 4.4 20.3% 4.9 12.1% 3.6 610.9% -0.1 1.8% 13.9 12.8% Of which Jackon 1.2 2.2% -0.9 -4.1% 1.4 3.4% 0.0 0.0% -0.1 1.8% 1.5 1.4% Other 0.0 0.0% 5.3 24.4% 3.5 8.7% 3.6 610.9% 0.0 0.0% 12.4 11.4% Divestments - - -1.4 -6.5% - - - - - - -1.4 -1.3% Currency - - 0.2 0.9% 0.1 0.3% 0.1 11.1% 0.0 0.0% 0.4 0.4% Organic growth 1.8 3.3% 6.4 29.5% 3.1 7.6% -1.8 -304.5% 2.3 -30.1% 11.7 10.7% Total increase/ decrease 3.0 5.5% 9.5 44.3% 8.1 20.0% 1.9 317.4% 2.1 -28.3% 24.6 22.6% 2022 57.0 31.1 48.3 2.5 -5.4 133.6 166166 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Definitions of alternative performance measures not defined by IFRS Organic growth Organic growth is defined as growth in net sales for the reporting period compared to the same period last year, excluding the impact of currency and acquisitions. It is a key ratio as it shows the underlying sales growth. EBITDA Earnings before interest, tax, depreciation, and amortisation. EBITDA is a key performance indicator that the group considers relevant for understanding the generation of profit before investments in fixed assets. EBITDA margin EBITDA as a percentage of net sales. The EBITDA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making comparisons with other companies. EBITA Earnings before interest, tax, and amortisations. EBITA is a key performance indicator that the group considers relevant, as it facilitates comparisons of profitability over time independent of corporate tax rates and financing structures but including depreciations of fixed assets used in production to generate the profits of the group. EBITA margin EBITA as a percentage of sales. The EBITA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making comparisons with other companies. EBIT Earnings before interest and tax. EBIT is a key performance indicator that the group considers relevant, as it facilitates comparisons of profitability over time independent of corporate tax rates and financing structures. Depreciations are included, however, which is a measure of resource consumption necessary for generating the result. Items affecting comparability Items affecting comparability include costs related to the planned IPO, transaction costs related to acquired entities, including the release of negative goodwill from acquisitions, severance costs and other normalisations such as divestment of real estate, closing of facilities, unscheduled raw material production stops and other. Adjusted (adj.) EBITDA Normalised earnings before interest, tax, depreciation, and amortisation (i.e., items affecting com- parability and deviations are added back). Adjusted EBITDA is a key performance indicator that the group considers relevant for understanding earnings adjusted for items that affect comparability. Adjusted (adj.) EBITDA margin EBITDA before items affecting comparability as a percentage of net sales. The adjusted EBITDA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making comparisons with other companies. Adjusted (adj.) EBITA Normalised earnings before interest, tax and amortisations (i.e., items affecting comparability and deviations are added back). EBITA is a key performance indicator that the group considers relevant, as it facilitates comparisons of profitability over time independent of corporate tax rates and financing structures but including depreciations of fixed assets used in production to generate the profits of the group. Adjusted (adj.) EBITA margin EBITA before items affecting comparability as a percentage of sales. The EBITA margin is a key performance indicator that the group considers relevant for understanding the profitability of the business and for making comparisons with other companies. ROCE Return on average capital employed. ROCE is a key performance indicator that the group considers relevant for measuring how well the group is generating profits from its capital in use. ROCE is calculated as rolling 12 months adjusted EBITA as a percentage of average capital employed during the same period. Capital employed is defined as total equity plus net debt, and the average is calculated with each quarter during the measurement period as a measuring point. Net debt Interest-bearing liabilities excluding obligations relating to employee benefits, minus cash and cash equivalents. Net debt is a key performance indicator that is relevant both for the group’s calculation of covenants based on this indicator and because it indicates the group’s financing needs. 167167 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 168168 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 1 GRI index Statement of use BEWI ASA has reported the information cited in this GRI content index in referamce to the GRI Standards for the period 01.01.2022 to 31.12.2022. GRI 1 used GRI 1: Foundation 2021 GRI standard Disclosure Page GRI 2: General Disclosures 2021 2-1 Organizational details 17, 72, 83, 102 2-2 Entities included in the organization’s sustainability reporting 30, 102 2-3 Reporting period, frequency and contact point 30, 102, 192 2-4 Restatements of information 191 2-5 External assurance 79, 160 2-6 Activities, value chain and other business relationships 14-29, 74, 83 2-7 Employees 3, 91, 185-186 2-8 Workers who are not employees 186 2-9 Governance structure and composition 35-36, 73 2-10 Nomination and selection of the highest governance body 73, 76-78 2-11 Chair of the highest governance body 69, 76-77 2-12 Role of the highest governance body in overseeing the management of impacts 35-36 2-13 Delegation of responsibility for managing impacts 35-36 2-14 Role of the highest governance body in sustainability reporting 35-36 2-15 Conflicts of interest 75-77 2-16 Communication of critical concerns 35-36, 61-62 2-17 Collective knowledge of the highest governance body - 2-18 Evaluation of the performance of the highest governance body 76-77 2-19 Remuneration policies 78, 80-81 169169 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 GRI standard Disclosure Page GRI 2: General Disclosures 2021 2-20 Process to determine remuneration 76-80 2-21 Annual total compensation ratio 186 2-22 Statement on sustainable development strategy 7- 8, 11-13, 17 2-23 Policy commitments 35-36, 55, 61 2-24 Embedding policy commitments 35-36 2-25 Processes to remediate negative impacts 35-36, 55-56, 61-62 2-26 Mechanisms for seeking advice and raising concerns 35-36, 55, 61, 68 2-27 Compliance with laws and regulations 35-36, 72,74 2-28 Membership associations 29 2-29 Approach to stakeholder engagement 33-34 2-30 Collective bargaining agreements 187 Material topics GRI 3: Material Topics 2021 3-1 Process to determine material topics 32-34 3-2 List of material topics 32 Anti-corruption GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 205: Anti-corruption 2016 205-1 Operations assessed for risks related to corruption 55-56, 68 205-2 Communication and training about anti-corruption policies and procedures 61- 62, 188 205-3 Confirmed incidents of corruption and actions taken 61- 62, 188 170170 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 GRI standard Disclosure Page Anti-competitive behavior GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 206: Anti-competitive Behavior 2016 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices 61-62 Materials GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 301: Materials 2016 301-1 Materials used by weight or volume 44-46, 183-184 301-2 Recycled input materials used 44-46, 183 301-3 Reclaimed products and their packaging materials 44-46, 184 Energy GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 302: Energy 2016 302-1 Energy consumption within the organization 39-40, 182 302-2 Energy consumption outside of the organization 39-40, 182 302-3 Energy intensity 183 302-4 Reduction of energy consumption 182-183 302-5 Reductions in energy requirements of products and services - 171171 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 GRI standard Disclosure Page Biodiversity GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 304: Biodiversity 2016 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 47-48 304-2 Significant impacts of activities, products and services on biodiversity 47-48 304-3 Habitats protected or restored - 304-4 IUCN Red List species and national conservation list species with habitats in areas affected by operations - Emissions GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 38-39, 182-183 305-2 Energy indirect (Scope 2) GHG emissions 38-39, 182-183 305-3 Other indirect (Scope 3) GHG emissions 38-39, 182-183 305-4 GHG emissions intensity 183 305-5 Reduction of GHG emissions 39, 182-183 305-6 Emissions of ozone-depleting substances (ODS) - 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions - Waste GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 306: Waste 2020 306-1 Waste generation and significant waste-related impacts 45-46, 183 306-2 Management of significant waste-related impacts 45 306-3 Waste generated 46, 183 306-4 Waste diverted from disposal 46, 183 306-5 Waste directed to disposal 46, 183 172172 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 GRI standard Disclosure Page Supplier environmental assessment GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 308: Supplier Environmental Assessment 2016 308-1 New suppliers that were screened using environmental criteria 54-56, 187 308-2 Negative environmental impacts in the supply chain and actions taken 54-56, 187 Employment GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 401: Employment 2016 401-1 New employee hires and employee turnover 185 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees - 401-3 Parental leave 183 Occupational health and safety GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 403: Occupational Health and Safety 2018 403-1 Occupational health and safety management system 50-51 403-2 Hazard identification, risk assessment, and incident investigation 50-51 403-3 Occupational health services 50-51 403-4 Worker participation, consultation, and communication on occupational health and safety 50-51 403-5 Worker training on occupational health and safety 50-51 403-6 Promotion of worker health 50-51 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 50-51 403-8 Workers covered by an occupational health and safety management system 50-51 403-9 Work-related injuries 50-51, 185 403-10 Work-related ill health 50-52 173173 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 GRI standard Disclosure Page 24-25 GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 404: Training and Education 2016 404-1 Average hours of training per year per employee 52-53 404-2 Programs for upgrading employee skills and transition assistance programs 52-53 404-3 Percentage of employees receiving regular performance and career development reviews 52-53 Diversity and equal opportunity GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees 52-53, 91, 185 405-2 Ratio of basic salary and remuneration of women to men 80-81 Freedom of association and collective bargaining GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 407: Freedom of Association and Collective Bargaining 2016 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk 54-56 Child labor GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 408: Child Labor 2016 408-1 Operations and suppliers at significant risk for incidents of child labor 54-56 174174 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 GRI standard Disclosure Page Forced or compulsory labor GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 409: Forced or Compulsory Labor 2016 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor 54-56 Local communities GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 413: Local communities 2016 413-1 The reporting organization shall report how it manages local communities using disclosure 3-3 in GRI 3: Material Topics 2021 57-59 413-2 Operations with significant actual and potential negative impacts on local communities 48, 184 Supplier social assessment GRI 3: Material Topics 2021 3-3 Management of material topics 35-36 GRI 414: Supplier Social Assessment 2016 414-1 New suppliers that were screened using social criteria 54-56, 187 414-2 Negative social impacts in the supply chain and actions taken 54-56, 187 175175 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 2 Transparency act index The Act shall promote enterprises’ respect for fundamental human rights and decent working conditions in connection with the production of goods and the provision of services and ensure the general public access to information regarding how enterprises address adverse impacts on fundamental human rights and decent working conditions. Disclosure description Page a) General description of the company's organization, operating area, guidelines and routines for handling actual and potential negative consequences for basic human rights and decent working conditions. p. 14-28, 32-36, 54-56, 68, 83-84 b) Information about actual negative consequences and significant risk of negative consequences that the business has uncovered through its due diligence assessments p. 54-56 c) Information about measures that the business has implemented or plans to implement to stop actual negative consequences or limit significant risk of negative consequences, and the result or expected results of these measures. p. 54-56 Public account of due diligence assessment according to the Norwegian Transparency Act will be found on BEWIs webpage. 176176 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 3 TCFD summary and index Theme Recommended disclosures BEWI summary Page Governance a) Describe the board’s oversight of climate-related risks and opportunities. The board of directors is the hightest authority to oversee the integrity of the work with climate risks and opportunities. The board of directors is responsible for ensuring that BEWI has internal control and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. The board shall annually review the company’s most important areas of risk exposure and the internal control of risks identified. p. 35-36, 77-78 b) Describe management’s role in assessing and managing climate related risks and opportunities. The executive management team is responsible for ensuring the integration of managing climate-related risks and opportunities in the organisation. Their responsibilities include taking a proactive role in understanding climate related risks and opportunities, reviewing and monitoring the assessment of the work done from the operational management team (CFO, CTO. CSO, CPO, CRO, RA). p. 35-36 Strategy a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term. BEWI will finalise the assessment of risks and opportunities over the short, medium and long term in 2023. p. 38, 42, 44, 47 b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning. The final assessment of risks and opportunities together with the financial disclosure of the scenario assessment will inform the strategy and financial planning going forward. p. 42-43 c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. In 2022, BEWI conducted a scenario assessment in line with the TCFD recommendations. The company will finalise the work with financial disclosures for the risks and opportunities identified in 2023, that will inform the organisations strategy and financial planning going forward. p. 42-43 Risk management a) Describe the organization’s processes for identifying and assessing climate related risks. BEWI is in the process of integrating climate risk into the company’s risk management system. The work will be finalized in 2023. p. 35-36, 42-43, 77-78, 90 b) Describe the organization’s processes for managing climate related risks. c) Describe how processes for identifying, assessing, and managing climate related risks are integrated into the organization’s overall risk management. The outcome of identified climate-related risks and opportunities will be a risk matrix showing all key risks defining potential impacts. The matrix will be presented to the executive management team by the Chief Risk Officer (CRO) and to the board of directors annualy where new risks, detoriation or existing risks are presented. p. 77-78 Metrics and targets a) Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk management process. Metrics used by BEWI to assess climate related risk and opportunities are GHG emissions for scope 1, scope 2 and scope 3 and GHG intensity (revenue and raw material consumption). The company is in the process to implement metrics regarding financial impact (amount and per centage) of identified transition and physical risks and climate related opportunities, amount and share of CAPEX deployed towards climate related risks and opportunities. p. 38-40 b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. BEWI reports its Greenhouse gas emissions in accordance with the Greenhouse Gas (GHG) protocol including scope 1, scope 2 and relevant scope 3 greenhouse gas emissions. p. 38-40 c) Describe the targets used by the organization to manage climaterelated risks and opportunities and performance against targets. BEWI is in the process of developing a climate reduction plan in line with the SBTi standard including scope 1, scope 2 and scope 3. p. 40, 43, 46, 48 177177 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 4 Taxonomy revenue Economic activities Codes Absolute turnover Proportion of turnover A. Taxonomy-eligible activities Manufacture of energy efficiency equipment for buildings (RAW) 3.5. 177 275 19% Manufacture of energy efficiency equipment for buildings 3.5. 230 397 25% Collection and transport of non-hazardous waste in source segregated fractions 5.5. 31 883 3% Material recovery from non-hazardous waste 5.9. 16 833 2% Turnover of Taxonomy-eligible activities 456 388 49% B. Non-eligible activities Turnover of non-eligible activities 472 907 51% Total (A+B) 929 295 100% 178178 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 5 Taxonomy CAPEX Economic activities Codes Absolute CAPEX Proportion of CAPEX A. Taxonomy-eligible activities Manufacture of energy efficiency equipment for buildings (RAW) 3.5. 4 574 12% Manufacture of energy efficiency equipment for buildings 3.5. 4 658 12% Collection and transport of non-hazardous waste in source segregated fractions 5.5. 2 000 5% Material recovery from non-hazardous waste 5.9. 75 0% CAPEX of Taxonomy-eligible activities 11 307 29% B. Non-eligible activities CAPEX of non-eligible activities 28 032 71% Total (A+B) 39 339 100% 179179 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 6 Taxonomy accounting policies BEWI’s taxonomy-eligible share of revenue in 2022 was 49%, which is similar to what was reported in 2021. BEWI’s taxonomy eligible share of CAPEX was 29% and is related to the company’s investment towards the production of energy efficiency equip- ment for buildings (20%) and BEWI circular (5.3%). Accounting policies BEWI has applied the climate change mitigation technical screening criteria when assessing its economic activities. Taxonomy- eligible activities identified were: • 3.5 Manufacture of energy efficiency equipment for buildings. • 5.5 Collection and transport of non-hazardous waste in source segregated fractions. • 5.9 Material recovery from non-hazardous waste. BEWI’s process for determining taxonomy-eligible activities has followed a three-step approach: • Assessing whether identified activities are covered by the economic activity descriptions included in the EU Taxonomy Climate Delegated Act. • Ensuring that identified activities comply with technical screening criteria for the identified activity. • Allocating revenue, and CAPEX according to the company’s overall assessment. The taxonomy-eligible activities have been calcu- lated as: • Taxonomy-eligible revenue activities = eligible revenue/total revenue • Taxonomy-eligible Capex = eligible Capex/total Capex 180180 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 7 Sustainability strategy progress Strategic pillars Strategic goal Our Key Performance Indicatiors Baseline 2020 Status 2021 Status 2022 Target 2030 Becoming circular To be lean % - renewable raw materials 4% 11% 12% 50% % - renewable energy sources 17% 19% 21% 50% % - renewable transportation 3% 6% 6% 50% % - production facilities ISO 14001 certified 47% 50% 60% 100% To keep % - recycable products 95% 99% 99% 100% % - rawmaterial consumption going to products for reuse 1% 1% 2% 10% To close % - cut-off waste from production 2% 2% 2% 0% % - waste sorted out for material recycling 35% 61% 68% 80% % - collected materials 18% 33% 54% 100% Actively engage in partnership Enhance policies and industry standards for circular solutions % - membership in industry association 100% 100% 100% 100% Team up to create joint value % - suppliers meeting environmental requirements* - - 65% 100% Increase knowledge and innovation to enable circularity and an inclusive society No. - project supported 0 1 1 1 Contribute to inclusive societies Be a responsible employer % - employees with a development plan 40% 44% 61% 100% No. - accidents 40 26 54 0 Be a responsible partner % - suppliers meeting human and labour rights requirements 1 - - 65% 100% No. - concerns of corruption or misconduct rised 0 0 2 0 Be a responsible neighbour % - production facilities with community engagement 45% 61% 74% 100% No. - deviation to environmental management systems 6 19 31 0 1 Per centage of procurement spend from suppliers above 50 000 EUR 181181 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 8 ESG progress Environmental progress Unit 2020 2020 M&A 2020 total 2021 2021 M&A 2021 total 2022 Change 2021-2022 Energy consumption Renewable (direct) fuel consumption 1,000 kWh 1 056 0 1 056 1 248 0 1 248 1 366 +9% Non-renewable (direct) fuel consumption 1,000 kWh 264 108 112 815 376 924 292 109 107 562 399 671 379 741 -5% Electricity consumption 1,000 kWh 82 305 15 385 97 689 96 069 15 478 111 546 109 091 -2% Heating consumption 1,000 kWh 18 279 0 18 279 18 635 0 18 635 18 890 +1% Steam consumption 1,000 kWh 31 042 0 31 042 33 360 0 33 360 30 334 -9% Renewable energy consumption (direct+indirect) 1,000 kWh 86 126 5 262 91 388 105 431 4 252 109 683 111 490 +2% Share of renewable energy consumption (direct+indirect) % 22% 4% 17% 24% 3% 19% 21% +6% Total energy consumption 1,000 kWh 396 790 128 200 524 990 441 891 123 039 564 931 539 422 -5% Total energy consumption TJ 1 428 462 1 890 1 591 443 2 034 1 942 -5% Greenhouse Gas Emissions Scope 1 Tonnes CO 2 eq. 27 238 10 474 37 712 30 848 8 603 39 452 43 995 +12% Scope 2 - Location-based Tonnes CO 2 eq. 42 251 8 859 51 109 49 026 9 445 58 470 45 774 -22% Scope 2 - Market-based Tonnes CO 2 eq. 18 540 8 859 27 398 20 563 9 445 30 007 23 652 -21% Scope 3 - total Tonnes CO 2 eq. 596 603 9 452 606 055 620 681 15 920 636 600 642 463 +1% Category 1 - Purchased goods and services Tonnes CO 2 eq. 595 802 9 466 605 268 589 615 9 008 598 623 608 799 +2% Category 2 - Capital Goods Tonnes CO 2 eq. - - - - - - - - Category 3 - Fuel- and energy-related activities Tonnes CO 2 eq. 0 0 0 0 0 0 0 0 Category 4 and 9 - Upstream- and Downstream transportation and distribution Tonnes CO 2 eq. - - - 25 466 6 567 32 033 32 041 +0% – Category 5 - Waste generated in operations Tonnes CO 2 eq. - - - 4 631 325 4 955 341 -93% Category 6 - Business travel Tonnes CO 2 eq. 37 12 49 97 20 117 324 +178% Category 7 - Employee commuting Tonnes CO 2 eq. - - 763 - - 872 959 +10% Category 8 - Upstream leased assets Tonnes CO 2 eq. 0 0 0 0 0 0 0 0 Category 10 - Processing of sold products Tonnes CO 2 eq. - - - - - - - - Category 11 - Use of sold products Tonnes CO 2 eq. 0 0 0 0 0 0 0 0 182182 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Unit 2020 2020 M&A 2020 total 2021 2021 M&A 2021 total 2022 Change 2021-2022 Category 12 - End-of-life treatment of sold products Tonnes CO 2 eq. - - - - - - - - Category 13 - Downstream leased assets Tonnes CO 2 eq. 0 0 0 0 0 0 0 0 Category 14 - Franchises Tonnes CO 2 eq. 0 0 0 0 0 0 0 0 Category 15 - Investments Tonnes CO 2 eq. 0 0 0 0 0 0 0 0 Total GHG emissions (scope 1, 2, and 3) Location-based Tonnes CO 2 eq. 667 958 28 811 696 768 702 756 33 968 736 723 732 233 -1% Total GHG emissions (scope 1, 2, and 3) Market-based Tonnes CO 2 eq. 644 246 28 811 673 057 674 293 33 968 708 260 710 111 +0% Climate accounting KPIs Energy intensity ratio MJ/kg raw material 4.59 109.13 6.01 4.75 111.81 6.03 6.96 +16% GHG emissions intensity ratio kg CO 2 /kg raw material 2.08 6.82 2.16 2.04 8.84 2.13 2.60 +23% Materials Renewable materials Tonnes material 39 784 316 40 100 30 809 331 31 140 34 484 +11% Non-renewable materials Tonnes material 313 982 4 248 318 230 332 442 3 992 336 434 274 229 -18% Share renewable materials % 11% 7% 11% 8% 8% 7% 11% +55% Recycled materials Tonnes material 32 452 12 32 464 5 588 26 5 613 3 851 -31% Non-recycled materials Tonnes material 274 978 4 214 279 193 317 521 3 933 321 454 269 337 -16% Share recycled materials % 11% 0% 10% 2% 1% 2% 4% +109% Water consumption 1,000 Liter 765 350 77 556 842 907 672 266 101 026 773 293 890 502 +15% Waste Waste sorted for recycling Tonnes waste - - - 12 065 - 12 065 11 556 -4% Waste sorted for reuse Tonnes waste - - - 0 - 0 102 Waste sorted for incineration Tonnes waste - - - 6 051 - 6 051 5 054 -16% Waste sorted for landfill Tonnes waste - - - 1 266 - 1 266 279 -78% Production cut-off waste recycled Tonnes waste - - - 8 625 4 8 629 8 044 -7% Production cut-off waste sent for incineration Tonnes waste - - - 1 530 199 1 729 1 088 -37% Share internal recycling production cut-offs % - - - 85% 2% 83% 88% +6% Total waste generated Tonnes waste - - - 19 382 527 19 909 16 990 -15% 183183 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Unit 2020 2020 M&A 2020 total 2021 2021 M&A 2021 total 2022 Change 2021-2022 Collected materials Expanded PolyPropylene (EPP) Tonnes material - - - 5 111 116 247 +113% Expanded PolyStyrene (EPS) Tonnes material - - - 18 868 18 904 37 772 32 629 -14% PolyPropylene (PP) Tonnes material - - - 0 1 935 1 935 4 518 +133% PolyEthylene (PE) Tonnes material - - - 106 0 106 12 995 +12206% Plastics (other) Tonnes material - - - 1 054 14 755 15 808 16 914 +7% Cardboard/paper Tonnes material - - - 2 692 52 032 54 725 51 032 -7% Total collected materials Tonnes material 10 975 75 150 86 125 19 729 96 026 115 755 117 857 +2% Biodiversity and Ecosystems Environmental deviations Number of environmental deviations 6 - 6 19 - 19 31 +63% ISO 14001 Certification Number of sites ISO 140001 certified 19 19 19 2 21 27 +158% Operation Clean Sweep (OCS) - implemented Number of sites with fully implemented OCS 0 0 0 0 0 0 7 Operation Clean Sweep (OCS) - in progress Number of sites started implementation of OCS 0 0 0 9 9 21 +133% Production facilities with very high local climate risk <1 km from protected nature area - - - - - - 10 Production facilities with high local climate risk >1 km & <2.5 km from protected nature area - - - - - - 6 Production facilities with medium local climate risk > 2.5km & <5 km from protected nature area - - - - - - 12 Production facilities with low local climate risk > 5km from protected nature area - - - - - - 20 184184 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Social progress Unit 2020 2021 2022 Health and Safety Total no of accidents Number 41 26 54 Frequency rate Number 0.0001 0.0001 0.0001 Severity rate Number 0.0011 0.0006 0.001 No of working days lost Number 359 311 536 Employees - - - Headcount women Number - 510 542 Headcount men Number - 1296 1526 FTE women Number 346 433 461.4 FTE men Number 1086 1152 1445.1 Diversity of governance bodies and employees (headcount) Female under 30 years Number - - 84 Female 30 to 50 years Number - - 264 Female over 50 years Number - - 195 Male under 30 years Number - - 236 Male 30 to 50 years Number - - 680 Male over 50 years Number - - 605 New employee hires in the reporting period (headcount) Female under 30 years Number - - 40 Female 30 to 50 years Number - - 35 Female over 50 years Number - - 14 Male under 30 years Number - - 127 Male 30 to 50 years Number - - 112 Male over 50 years Number - - 64 185185 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Unit 2020 2021 2022 Employees that left their employment in the reporting period (headcount) Female under 30 years Number - - 25 Female 30 to 50 years Number - - 46 Female over 50 years Number - - 17 Male under 30 years Number - - 98 Male 30 to 50 years Number - - 112 Male over 50 years Number - - 80 Parental leave (headcount) Total number of employees that took parental leave Number - - - Female Number - - 40 Male Number - - 39 Total number of employees that returned to work in the reporting period after parental leave ended Number - - - Female Number - - 20 Male Number - - 35 Total number of employees that returned to work after parental leave ended that were still employed 12 months after their return to work Number - - - Female Number - - 8 Male Number - - 45 Total number of employees due to return to work after taking parental leave Number - - - Female Number - - 12 Male Number - - 23 Total number of employees returning from parental leave in the prior reporting period(s) Number - - - Female Number - - 4 Male Number - - 26 Workers who are not employees Total number of workers who are not employees and whose work is controlled by the organisation (heads.) Number - 224 243 Annual total compensation ratio The ratio of the annual total compensation of the organisations higest-paid individual to the median annual total compensation of all employees. Highest compensation divided by median compensation. Percentage (%) - 789% - 186186 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Unit 2020 2021 2022 Collective bargaining agreements The percentage of total employees covered by collective bargaining agreements. Percentage (%) - 83% - For employees not covered by collective bargaining agreements, report whether the organisation determines their working comditions and terms of emplyment based on collective bargaining agreements that cover its other employees or based on collective bargining agreements for other organisations. Percentage (%) - 17% - Human rights Number of suppliers Number of suppliers - 2500 7500 Number of new suppliers Number of suppliers - - 191 New suppliers that were screened using social criteria Number of suppliers - - 12 New suppliers that were screened using social criteria Percentage - - 6.28% Supplier social assessment Suppliers assessed for social impacts Number of suppliers - 0 220 Suppliers assessed for social impacts Percentage - 0% 2.93% Suppliers with negative social impacts Number of suppliers - 0 6 Suppliers with negative social impacts Percentage - 0% 2.73% Suppliers with negative social impacts with improvements implemented Number of suppliers - 0 0 Suppliers relationships terminated as a result of assessment Number of suppliers - 0 0 Supplier environment assessment Suppliers assessed for environmental impacts Number of suppliers - 0 220 Suppliers assessed for environmental impacts Percentage - 0% 2.93% Suppliers with negative environmental impacts Number of suppliers - 0 29 Suppliers with negative environmental impacts Percentage - 0% 13.18% Suppliers with negative environmental impacts with improvements implemented Number of suppliers - 0 0 Suppliers relationships terminated as a result of assessment Number of suppliers - 0 0 Suppliers assessed for social and environmental impacts Percentage of procurement spend from suppliers above 50 000€ - - 65% 187187 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Unit 2020 2021 2022 Local communities Total number of sites Number of sites - 38 43 Sites with local initiatives and community engagements Number of sites - 19 32 Sites with local initiatives and community engagements Percentage - 50% 74.42% Environmental deviations Number of environmental deviations 6 19 31 Governance progress Unit 2020 2021 2022 Corruption and business ethics Operation assessed for risk related to corruption Number - - - Risk related to corruption identified Number 0 0 0 Communication and training of anticorruption policies and procedures to governance body members Number - - - Communication and training of anticorruption policies and procedures to relevant employees Number - 216 255 Communication of anticorruption policies and procedures to buisness partners Number - - - Anti-competitive behaviour Number of legal actions pending or completed Number 0 0 2 188188 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 9 ESG accounting policies Accounting comments Greenhouse Gas Emissions Scope 1 Direct GHG emissions from BEWI’s production facilities, offices, and warehouses including fuels used for energy production and fuels used for BEWI-owned vehicles. Emissions are calculated using fuel-specific CO 2 -emission metrics that convert the reported unit (kWh) into kg CO 2 - equivalents. When reporting was done using other metrics than kWh, conversions factors from kg, liter, or m 3 , into kWh were also used. Scope 2 Location-based Energy-related indirect GHG emissions (e.g., electricity, district heating) for BEWI’s production facilities, offices, and warehouses based on location-specific GHG emission factors. Emissions for electricity-use from the national grid were calculated using country-specific CO 2 - emission factors converting the kWh used into kg CO 2 -equivalents. Scope 2 Market-based Energy-related indirect GHG emissions (e.g., electricity, district heating) for BEWI’s production facilities, offices, and warehouses based on market-based GHG emission factors. Emissions for electricity from green contracts were based on operational energy production emissions, i.e., zero-emission for wind energy and hydropower. Scope 3 (total) Sum of other indirect GHG emission categories within scope 3 linked to BEWIs activities. Category 1 - Purchased goods and services Indirect GHG emissions related to purchased goods and services used for trading and the production or packaging of BEWI’s products. Emissions were calculated using CO 2 -emission metrics based on the type of goods or services that were purchased and converted reported kg of goods/services into kg CO 2 -equivalents. Category 2 - Capital Goods Indirect GHG emissions from the production of capital goods that BEWI acquired during 2022. For 2022, BEWI has not yet included the emissions related to this category in its climate account. Accounting comments Category 3 - Fuel- and energy-related activities Indirect emissions related to the production of fuels and energy purchased and consumed not included in scope 1 & 2. BEWI had no emissions in this reporting category during 2022. Category 4 & 9 - Upstream- and Downstream transportation and distribution Indirect GHG emissions related to purchased transportation for upstream and downstream. Calculation is based on expenditure on transportation in euros coupled with a unit CO 2 per unit spent on transportation (based on train, boat, truck (fossil and non-fossil)). Category 5 - Waste generated in operations Indirect GHG emissions related to the handling of waste that was generated in BEWI’s operations. Emissions were calculated using location-specific metrics per waste handling method that converted kg of waste into kg CO 2 -equivalents. Reported numbers were based on data received from the waste-handling companies. Category 6 - Business travel Indirect GHG emissions related to all business travel by plane. Emissions were based on full GHG emission reports from travel agencies when available and were otherwise based on average emission factors per flight type (national, European, intercontinental). Category 7 - Employee commuting Indirect GHG emissions related to all employee commuting for all of BEWI’s employees. To ensure that private employee information was not used, the emissions from employee commuting were calculated using average commuting distances coupled with employee numbers and emission factors per transport type (car, bus, train, walking, cycling). The average commuting distances were based on country- specific statistical sources found in online literature research. Category 8 - Upstream leased assets Indirect emissions from the operations from leased assets that are not already included scope 1 and/or scope 2. BEWI had no additional emissions in this reporting category during 2022. 189189 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Accounting comments Category 10 - Processing of sold products Indirect GHG emissions related to the further processing of products sold by BEWI. For the raw materials that BEWI produced and used internally, this was accounted for in the internal climate accounting for the downstream production facilities in BEWI. Emissions for further processing by external parties were not yet included in BEWI’s climate account for 2022. Category 11 - Use of sold products Indirect emissions coming from the use of sold goods and services. BEWI had no emissions in this reporting category during 2022. Category 12 - End-of-life treatment of sold products Indirect GHG emissions from the disposal and final treatment of products produced by BEWI in 2022. For 2022, BEWI has not yet included this category in its climate account. Category 13 - Downstream leased assets Indirect emissions from the operation of assets owned and leased by BEWI that are not included in scope 1 and 2. BEWI had no emissions in this reporting category during 2022. Category 14 - Franchises Indirect emissions from the operation of franchises not included in scope 1 and 2. BEWI had no emissions in this reporting category during 2022. Category 15 - Investments Indirect scope 3 emissions associated with BEWI’s investments. BEWI had no emissions in this reporting category during 2022. Total GHG emissions (scope 1, 2, and 3) Location- based Sum of the total scope 1, scope 2 location-based, and scope 3 emissions. Total GHG emissions (scope 1, 2, and 3) market- based Sum of the total scope 1, scope 2 market-based, and scope 3 emissions. Category 11 - Use of sold products Indirect emissions coming from the use of sold goods and services. BEWI had no emissions in this reporting category during 2022. Category 12 - End-of-life treatment of sold products Indirect GHG emissions from the disposal and final treatment of products produced by BEWI in 2022. For 2022, BEWI has not yet included this category in its climate account. Category 13 - Downstream leased assets Indirect emissions from the operation of assets owned and leased by BEWI that are not included in scope 1 and 2. BEWI had no emissions in this reporting category during 2022. Accounting comments Category 14 - Franchises Indirect emissions from the operation of franchises not included in scope 1 and 2. BEWI had no emissions in this reporting category during 2022. Category 15 - Investments Indirect scope 3 emissions associated with BEWIs investments. BEWI had no emissions in this reporting category during 2022. Total GHG emissions (scope 1, 2, and 3) Location-based Sum of the total scope 1, scope 2 location-based, and scope 3 emissions. Total GHG emissions (scope 1, 2, and 3) market-based Sum of the total scope 1, scope 2 market-based, and scope 3 emissions. Climate accounting KPIs Energy intensity ratio Energy use per unit of raw material used in the production of BEWI’s products excluding purchased packaging. Calculations were done using the total energy consumption within BEWI. GHG emissions intensity ratio GHG emissions per unit of raw material used in the production of BEWI’s products excluding purchased packaging. Calculations were done using emissions from all three scopes. 190190 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Appendix 10 Restatements of information Topic Reason for restatements The effect of the recalculation Waste fraction reycled Calculations for the fraction of recycled waste as part of the total waste production were changed in 2022 to include the production waste/cut-offs being recycled. To allow for the right comparison of numbers, the same calculation method was used to recalculate the numbers for 2020 and 2021. For 2021, the effect of the recalculation resulted in an increase to 61% from 37% in the overall progress towards 80% waste sorted out for recycling. Scope 2 market-based The calculation of the market-based emissions for scope 2 for 2022 were done using the emission factors provided in the green contracts for the relevant sites. For 2020, and 2021, an average emissions factor based on the type of green electricity was used. To allow for good comparibility, the numbers for 2020 and 2021 were recalculated using the same method used for the 2022 numbers. The recalculations resulted in an approximate decrease of 1-2% for the market-based emissions. Scope 2 For the scope 2 emissions for 2021, an error was discovered in the calculations where the indirect energy source categories other than electricity where not included in the final emissions number. This was corrected for in the 2022 report. The recalculations resulted in an approximate increase of 20% for market-based emissions and approximately 7% for loca- tion-based emissions. Scope 3 purchased goods and services - Chipboard For the scope 3 emissions for 2021, an error was discovered where chipboard was not included in the calculation of the scope 3 - purchased goods and services emissions. This was corrected in the 2022 report. The added emissions from chipboard resulted in an increase of 1% for the scope 3 - purchased goods and services emissions for 2021. Scope 3 purchased goods and services The 2022 climate account has higher data quality on scope 3 - purchased goods and services where more types of materials were included than in previous years. This resulted in higher scope 3 emissions mainly from the inclusion of PS, ATH adhesives, and cardboard. In total, the larger scope for the scope 3 - purchased goods and services, resulted in a 26 kton (4% of total emissions) increase in emissions for 2022 that are explained only by the increased data quality. Category 2 - Capital Goods Indirect GHG emissions from the production of capital goods that BEWI acquired during 2022. For 2022, BEWI has not yet included the emissions related to this category in its climate account. 191191 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 artbox.no BEWI ASA Dyre Halses gate 1A 7042 Trondheim, Norway BEWI.com Chief Communications Officer and Investor Relations Charlotte Knudsen Tel: +47 975 61 959 Director of Sustainability Camilla Louise Bjerkli Tel: +47 984 487 56 Publication 25 th April 2023 192192
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