Befesa S.A.

Annual Report (ESEF) • Apr 30, 2025

222100VXGA8L6J4ZWG612024-01-012024-12-31222100VXGA8L6J4ZWG612024-12-31iso4217:EUR222100VXGA8L6J4ZWG612023-12-31222100VXGA8L6J4ZWG612023-01-012023-12-31iso4217:EURxbrli:shares222100VXGA8L6J4ZWG612022-12-31ifrs-full:IssuedCapitalMember222100VXGA8L6J4ZWG612022-12-31ifrs-full:SharePremiumMember222100VXGA8L6J4ZWG612022-12-31ifrs-full:ReserveOfCashFlowHedgesMember222100VXGA8L6J4ZWG612022-12-31befesasa:InterimDividendDeliveredInTheYearMember222100VXGA8L6J4ZWG612022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember222100VXGA8L6J4ZWG612022-12-31befesasa:NetProfitForTheYearMember222100VXGA8L6J4ZWG612022-12-31ifrs-full:NoncontrollingInterestsMember222100VXGA8L6J4ZWG612022-12-31222100VXGA8L6J4ZWG612023-01-012023-12-31ifrs-full:IssuedCapitalMember222100VXGA8L6J4ZWG612023-01-012023-12-31ifrs-full:SharePremiumMember222100VXGA8L6J4ZWG612023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember222100VXGA8L6J4ZWG612023-01-012023-12-31befesasa:InterimDividendDeliveredInTheYearMember222100VXGA8L6J4ZWG612023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember222100VXGA8L6J4ZWG612023-01-012023-12-31befesasa:NetProfitForTheYearMember222100VXGA8L6J4ZWG612023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember222100VXGA8L6J4ZWG612023-12-31ifrs-full:IssuedCapitalMember222100VXGA8L6J4ZWG612023-12-31ifrs-full:SharePremiumMember222100VXGA8L6J4ZWG612023-12-31ifrs-full:ReserveOfCashFlowHedgesMember222100VXGA8L6J4ZWG612023-12-31befesasa:InterimDividendDeliveredInTheYearMember222100VXGA8L6J4ZWG612023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember222100VXGA8L6J4ZWG612023-12-31befesasa:NetProfitForTheYearMember222100VXGA8L6J4ZWG612023-12-31ifrs-full:NoncontrollingInterestsMember222100VXGA8L6J4ZWG612024-01-012024-12-31ifrs-full:IssuedCapitalMember222100VXGA8L6J4ZWG612024-01-012024-12-31ifrs-full:SharePremiumMember222100VXGA8L6J4ZWG612024-01-012024-12-31ifrs-full:ReserveOfCashFlowHedgesMember222100VXGA8L6J4ZWG612024-01-012024-12-31befesasa:InterimDividendDeliveredInTheYearMember222100VXGA8L6J4ZWG612024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember222100VXGA8L6J4ZWG612024-01-012024-12-31befesasa:NetProfitForTheYearMember222100VXGA8L6J4ZWG612024-01-012024-12-31ifrs-full:NoncontrollingInterestsMember222100VXGA8L6J4ZWG612024-01-012024-12-31ifrs-full:OtherReservesMember222100VXGA8L6J4ZWG612024-12-31ifrs-full:IssuedCapitalMember222100VXGA8L6J4ZWG612024-12-31ifrs-full:SharePremiumMember222100VXGA8L6J4ZWG612024-12-31ifrs-full:ReserveOfCashFlowHedgesMember222100VXGA8L6J4ZWG612024-12-31befesasa:InterimDividendDeliveredInTheYearMember222100VXGA8L6J4ZWG612024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember222100VXGA8L6J4ZWG612024-12-31befesasa:NetProfitForTheYearMember222100VXGA8L6J4ZWG612024-12-31ifrs-full:NoncontrollingInterestsMember Annual Report 2024 Befesa has been a vital player in the circular economy for more than three decades through its role in reducing the environmental impact of industrial waste, recovering valuable materials and reintroducing them into the production process, andreducing thecost of primary production. 1Befesa Annual Report 2024 01 Befesa at a glance 2 02 To Befesa’s shareholders 5 Letter from the Executive Chair and the CEO 6 Befesa in the capital markets 10 03 Management report 16 About the Company 18 Business model 20 Markets and sites 24 Market environment 26 Strategy 32 Results of operations 36 Financial position & liquidity 38 Segment information 40 R&D and innovation 42 Risks & opportunities 46 Outlook and subsequent events 54 Corporate governance 56 Shareholders 64 Other corporate governance practices 66 Local communities 70 04 Sustainability statement 70 General disclosures 76 Environmental 112 EU Taxonomy 112 Social 154 Governance 178 Independent auditor’s report 192 05 Consolidated financial statements 198 fi  Consolidated income statement 202 Consolidated statement of comprehensive income 203 Consolidated statement of changes in equity 204 fl  fi  Responsibility statement 272 Independent auditor’s report 273 06 Statutory financial statements 278 Balance sheet 280 fi  Notes to the statutory fi  Responsibility statement 294 Independent auditor’s report 295 07 Additional information 300 Glossary 302 Financial calendar 303 Disclaimer 304 Steel Dust Aluminium Salt Slags Both Befesa at a glance For more than three decades, Befesa has  has continuously demonstrated a strong commitment to recycling. 24 RECYCLING PLANTS 6 €1,239m REVENUE €419M €213m ADJUSTED EBITDA €43M €51m NET PROFIT 2.2m TONNES OF RESIDUES RECYCLED 1.7m TONNES OF RECOVERED NEW MATERIALS REINTRODUCED INTOTHE MARKET €192m OPERATING CASH FLOW 1,784 EMPLOYEES 207 Men Women Befesa is a global leader in providing regulated critical environmental recycling services to the steel and aluminium industries in key European, Asian and North American markets. Befesa is a vital part of the circular economy, providing sustainable solutions to its customers. 1,577 €170M 18 €826M 2 Befesa Annual Report 2024 Befesa’s recycling plants are positioned in attractive markets that are strategically  Close proximity to major customers USA Spain France Germany Sweden Turkey China South Korea Countries we operate in 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 3Befesa Annual Report 2024 02 To Befesa’s shareholders 6 Letter from the Executive Chair and the CEO 10 Befesa in the capital markets Befesa Annual Report 20244 5Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information €1,239m REVENUE IN 2024 (€1,181M IN 2023) €213m ADJUSTED EBITDA IN 2024 (€182M IN 2023) Letter from the Executive Chair and the CEO Javier Molina Executive Chair Dear Shareholders, As we close the books on 2024, We would like to take a moment to reflect on our achievements, challenges and strategic direction. This past year has been a period of resilience, growth and transformation for Befesa. Despite a dynamic and often uncertain economic environment, we remained focussed in our commitment to operational excellence, financial discipline and sustainable growth. Befesa has continued to reinforce its position as a global leader in the recycling industry, particularly in the steel dust and aluminium salt slags markets. With macroeconomic conditions stabilising and our strategic initiatives gaining momentum, we not only delivered on our targets but exceeded expectations, demonstrating the strength of our business model and our ability to adapt to changing market dynamics. We are pleased to report that 2024 was a year of strong financial performance, underpinned by operational improvements and a disciplined execution of our strategy. Our adjusted EBITDA reached €213.4 million, marking a 17% increase from 2023. This was driven by a combination of higher commodity prices, improved efficiencies and increased capacity utilisation across our plants. Our revenue grew 5% to €1,239 million, reflecting the strength of our core recycling businesses and our ability to capture value in an evolving market. Asier Zarraonandia Chief Executive Officer Befesa Annual Report 20246 fl fl fi     successfully reduced our net leverage to x2.9, surpassing our initial target of   fi Our Steel Dust Recycling Services segment delivered an outstanding performance in 2024. Our plants in Europe operated at 92% capacity,  solid utilisation levels, supporting  more challenging macroeconomic  break-even in our operations there, demonstrating our resilience and ability to adapt to local market conditions. We remain committed to securing long-term steel dust supply agreements in China, ensuring  In the Aluminium Salt Slags Recycling   market leadership. Our investments in expanding our aluminium recycling capabilities have yielded positive ffi increasing our ability to meet  The Palmerton expansion project in the US has progressed to its hot- commissioning phase, marking a fi  North America and enhance our ability   Bernburg project in Germany remains a key strategic priority, supporting   in expanding our global footprint,  expansion plans in China, given the current market conditions. This  executing our most impactful projects fifl for future opportunities. Sustainability remains at the core of   our environmental and social goals. Our commitment to the circular economy continues to drive long- term value creation, ensuring that  ffi fi  reducing the intensity of greenhouse gas (GHG) emissions by 20% by 2030. ffi processes and the increased use of  reductions in our carbon footprint.  ff ffi fi Safety remains a top priority, and  safety systems, enhanced training programmes and proactive risk management, reinforcing our commitment to a zero-incident  employees and contractors is  prioritise initiatives that enhance  employee engagement. We remain committed to delivering   pleased to announce a dividend of €0.64 per share, representing a payout of 50% of our net income for 2024. flfi fl   We remain committed to delivering value to our shareholders.  optimistic about the opportunities ahead. The global decarbonisation and circular economy trends continue to accelerate, creating a favourable long-term market environment for Befesa’s recycling solutions. Our ability to recover valuable materials from  enabler of sustainable steel and   ffi Befesa has a strong presence in Europe, North America and   01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 7Befesa Annual Report 2024 fi year of strong, double-digit EBITDA  positive impacts: y    y Favourable zinc hedges secured into 2025, expected to contribute an additional €20–25 million in EBITDA  y Ongoing operational improvements ffi plants and in particular in our fi   further strengthening our business. Our approach remains disciplined and fl ffi fi fi   to changing market conditions.  progress for Befesa. We delivered fi continued to expand our global presence and made meaningful strides in our sustainability commitments. Our resilience, operational excellence and strategic  continued success in 2025 and beyond.  gratitude to our dedicated employees,  have been instrumental in driving our success. We also thank our shareholders for their continued trust  to building a more sustainable and prosperous future for all stakeholders. Thank you for being part of our journey. Cash flow generation remained strong, with operating cash flow increasing 30% to €191.8 million. This financial strength allowed us to continue investing in strategic growth projects while maintaining a prudent approach to capital allocation. In addition, we successfully reduced our net leverage to x2.9, surpassing our initial target of x3.0. This reduction positions us well for future expansion while maintaining financial discipline. Asier Zarraonandia Chief Executive Officer Javier Molina Executive Chair 8 Letter from the Executive Chair and the CEO continued Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 9Befesa Annual Report 2024 Share data Ticker symbol BFSA ISIN LU1704650164 German securities code (WKN) A2H5Z1 Bloomberg code BFSA:GR Reuters code BFSA.DE Stock exchange Frankfurt Stock Exchange, XETRA Market segment Prime Standard Index SDAX Number of shares 39,999,998 In € 2024 2023 2022 fl 100.00% 100.00% 100.00% Closing price 20.76 35.20 45.06 Highest price 36.84 55.05 72.60  17. 80 25.76 30.18 Dividends 0.64 0.73 1.25 Dividend yield (based on closing price) 3.1% 2.1% 2.8% Market capitalisation (end of year) 830,399,958 1,407,999,930 1,802,399,910 Source: XETRA * Proposal – subject to AGM resolution Befesa in the capital markets Befesa share development vs DAX, MDAX and SDAX in 2024 DAX MDAX Befesa DEC 2023 DEC 2024 SDAX 140 120 100 80 60 40 20 0 10 Befesa Annual Report 2024 Share performance in 2024 Befesa DAX MDAX SDAX 29 December 2023 35.20 16,751.64 27,137.30 13,960.36 30 December 2024 20.76 19,909.14 25,589.06 13 ,711.33 Change -41.0% 18.8% -5.7% -1.8%  characterised by a complex mix of  fl monetary policies and geopolitical  global economic outlook, leading to cautious sentiment among investors. fl energy prices, particularly as a result of ongoing geopolitical tensions, contributed to increased uncertainty,  disruptions persisted in many regions. fl a general preference among investors  ongoing global uncertainty, particularly in Europe. The trend of reallocating capital from mid- and small-cap stocks to larger, more established companies,  2021, appeared to persist throughout the year. fl fi  on Befesa’s share price. As of year-end  By the last trading day of 2024, it had fl decline of 41.0% in 2024. The Company’s market capitalisation at  In comparison, the performance of the   represents the 40 largest German  18.8%, rising from 16,751.64 points to  tracking mid-sized companies, experienced a decline of 5.7%, falling from 27,137.30 points to 25,589.06   slight drop of 1.8%, moving from 13,960.36 points to 13,711.33 points. Despite the market pressures,  and sustainability remained central to its strategy. Its focus on sustainability and the circular economy continued  investment trends. Shareholder structure Befesa regularly conducts a shareholder analysis to better understand its shareholder base and to continually enhance the ff activities. The results of the analysis  more than 92% of Befesa’s shares   established institutional shareholder base provides a solid foundation for the Company’s capital structure and long-term stability. Retail investors held a relatively small proportion of the Company’s fl a more limited participation in the stock by individual investors. Geographically, as of 31 December 2024 ,  institutional investors from Europe. Spain, Germany and France represented the largest shareholder base, collectively holding 55.4%. Other European investors accounted for 11.1%, and investors from the UK and   Based on the various major holding fi as of 31 December 2024, shareholders  fi voting rights attached to Befesa S.A. shares can be found in the Corporate Governance section. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 11Befesa Annual Report 2024 Dividend proposal Befesa has maintained a consistent dividend policy since its IPO in 2017, targeting a payout ratio of 40–50% fi At the upcoming Annual General Meeting (AGM), the Board of  distribution of €25.4 million to shareholders, equating to €0.64 per  represent a payout ratio of 50% of the fi in 2023) and a dividend yield of 3.1% (compared to 2.1% in 2023). The fi determined by Befesa’s shareholders at the AGM on 19 June 2025. Indices Befesa, listed in the Prime Standard of the Frankfurt Stock Exchange, has been part of several Deutsche Börse indices. After being listed in the SDAX in September 2018, Befesa joined the  fl  to the SDAX as of 18 December 2023. On 22 January 2024, Deutsche Börse announced an unscheduled change to the MDAX, causing Befesa to rejoin the index on 25 January 2024. The SDAX includes 70 small-cap companies,     fi Befesa has been a member of the Global Challenges Index (GCX) since September 2020. The GCX includes shares from 50 international companies, selected based on rigorous criteria from a pool of approximately 6,000 corporations. Befesa’s inclusion ffi The GCX, launched by Börsen AG (the parent company of the Hamburg and Hanover stock exchanges) in 2007,  fi contributions to addressing seven global challenges: climate change,   poverty and global governance.  As of 31 December 2024, Befesa’s shares were primarily held by institutional investors from Europe, mainly Spain, Germany and France. Spain, Germany, France Other European countries UK & Ireland North America Rest of world Unidentified 50.4% TOTAL 92.3% 11.1% 15.2% 10.3% 7.7% 0.3% Geographical distribution of institutional shareholders Befesa in the capital markets continued 12 Befesa Annual Report 2024 Institution Analyst Recommendation Target price (€) Berenberg Lasse Stueben Buy 31.00 Citi Shashi Shekhar Neutral 24.00 Deutsche Bank ff Neutral 26.00 Exane (BNP Paribas Exane) ff Buy 26.00 Hauck & Aufhäuser Jorge Gonzalez Sadornil Buy 35.00 ff Martin Comtesse Buy 44.00 Kepler Cheuvreux Juan Rodriguez Buy 30.00 Morgan Stanley Ioannis Masvoulas Neutral 26.00 Oddo Anis Zgaya Buy 38.00 Santander Jaime Escribano Buy 45.00 Stifel Brian Butler Buy 31.00 Mean €32.36 Median €31.00 Min. €24.00 Max. €45.00 As of 31 December 2024 its strong performance in the ISS ESG rating (Prime Status) and its contribution to the Sustainable Development Goals (SDGs) through ff ffi and developing recycling solutions that support a more sustainable circular economy. Analysts’ coverage and recommendations   regularly publish research reports, providing their assessments and recommendations regarding the Company’s stock. Eight of these analysts have issued a Buy recommendation, highlighting the Company’s solid fundamentals, fi and favourable outlook for its  analysts have maintained a Hold fl more cautious perspective on the Company’s near-term prospects. Credit relations fi fi for its ongoing success. In July 2024, the Company successfully completed fi consisting of a €650 million senior  extension due July 2029, a €100 million revolving credit facility due July 2028, and a €35 million guarantee facility due July 2028. Rating Agency Year-end 2024 Year-end 2023 Rating Outlook Rating Outlook Moody’s Ba2 stable Ba2 Stable Standard & Poor’s BB stable BB+ Negative 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 13Befesa Annual Report 2024   B (Prime status) Top 8% of 79 Metals processing & production  Top 3 of 73 Commercial services BBB Environmental & facilities services 92 percentile of 185 Commercial services & supplies fi fi an impact on its current leverage fi covenant-lite terms as the previous  margin of Euribor +275 bps and  for up to a further 50 bps margin reduction if the leverage ratio drops  In May 2024, S&P Global changed the  stable outlook from the previous BB+   a stable outlook on Befesa. ESG ratings Environmental, social and governance (ESG) is a critical and increasingly important focus in capital markets. Befesa is regularly assessed by leading ESG rating agencies. As part of the circular economy, Befesa meets the criteria of investors focused fi investing. Although ESG ratings are essential, their methodologies can fffi interpretation of the data. Befesa actively  provide comprehensive and accurate  improving its rating results. ff are provided on the Sustainability Statement. Investor relations activities  the capital markets through a comprehensive series of meetings and events. In 2024, the Company participated in 19 conferences and fi 366 institutional investors from Europe and the US through 100 one-on-one and 73 group meetings. This broad engagement highlights Befesa’s commitment to maintaining strong investor relations and providing transparency to its stakeholders.  dates, investor conferences and current presentations is available on  Befesa in the capital markets continued ff  14 Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 15Befesa Annual Report 2024 03 Management report 18 About the Company 20 Business model 24 Markets and sites 26 Market environment 32 Strategy 36 Results of operations 38 Financial position & liquidity 40 Segment information 42 R&D and innovation 46 Risks and opportunities 54 Outlook and subsequent events 56 Corporate governance 64 Shareholders 66 Other corporate governance practices 70 Local communities 16 Befesa Annual Report 2024 17Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information About the company General information Befesa, S.A. is a public limited company (société anonyme) incorporated in Luxembourg and  ffi Boulevard de la Pétrusse, L-2320, Luxembourg, Grand Duchy of Luxembourg. Befesa, S.A. is the Parent Company of the Befesa Group. fi 1 January and ends on 31 December. Organisation of Befesa Befesa organises its activities into  Recycling Services and Aluminium Salt Slags Recycling Services.    promoting a common management philosophy and mission. In 2024, the Steel Dust Recycling Services segment represented 80% of Befesa’s total Adjusted EBITDA.  by the Aluminium Salt Slags Recycling Services segment. Befesa’s vision Befesa aims to be the global leader  hazardous residues for the steel    circular economy. Befesa’s strategy Befesa focuses on serving its customers and achieving its goals by developing improvements in existing technologies, optimising operations and product quality, and increasing ffi   and emerging markets. Corporate functions Steel Dust Recycling Services Aluminium SaltSlags Recycling Services Befesa’s business Befesa Befesa’s business is to provide sustainable solutions to the steel and aluminium industries through servicing and recycling hazardous residues generated in the value chains of secondary steel and aluminium producers. Befesa focuses its core ff residues: crude steel dust, salt slags and spent pot linings (SPL). Befesa has been a vital part of the circular economy for more than three decades. Befesa’s principles Befesa places a strong emphasis on its social responsibility and helps to  18 Befesa Annual Report 2024 Befesa focuses on the following principles: Health & safety Operational excellence Environmental protection Customer focus Compliance Integrity & transparency Highly qualified employees 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 19Befesa Annual Report 2024 Business model The services cover the timely and ffi hazardous residues – mainly steel dust and salt slags – from customers’ facilities. This enables the management of the environmental and regulatory obligations that Befesa’s customers have: to recycle the hazardous residues generated in their operations. The introduction of more stringent environmental regulations,  sustainability and circularity, have  Befesa since 1987. Befesa has been able to capture   business model that has proven fi environment, at the same time fi    environmental regulations and Befesa’s services become ever-more critical to operators in the steel and aluminium industries. In the Steel Dust Recycling Services segment, Befesa collects and recycles steel dust and other steel residues generated in the production of crude, stainless and galvanised steel in electric arc furnaces (EAF) . The majority of the revenue generated in the Steel Dust Recycling Services segment comes from selling Waelz oxide (WOX) to zinc smelters. Furthermore, a portion of the revenue generated comes from the service fees charged for the collection and especially the treatment of crude  Befesa’s business model is based on a full-service approach to offering residue management solutions to its customers in the steel and aluminium industries. In the US, Befesa operates its zinc fi vertically zinc operation for the Company in this market, helping to address the shortage of zinc smelting capacity in the North American fi  producing green zinc - special high-grade (SHG) zinc - from 100%  generates revenues from the sale of SHG zinc produced from the recycling of WOX sourced from Befesa’s EAF steel dust recycling plants in the US. Befesa’s zinc refining plant is the only one of its kind in the world producing green zinc - special high-grade (SHG) zinc - from 100% recycled raw materials (WOX). In addition, a small portion of revenue is generated by tolling fees. These fees consist of a service fee charged for collecting and treating stainless steel residues and a fee for returning the metals – mainly nickel, chromium and molybdenum recovered in the recycling process – to stainless-steel dust customers. In the Salt Slags operations of the Aluminium Salt Slags Recycling Services segment, Befesa recycles salt slags that are collected from customers for a service fee. Further salt slags are generated during the production of secondary aluminium at Befesa’s plants. In addition, Befesa recycles SPL, a hazardous residue generated by primary aluminium producers. During the recycling process, melting salt, aluminium concentrates and aluminium oxides are recovered. Revenues from the Salt Slags operations are mainly derived from the sale of aluminium concentrates and melting salt obtained from recycling salt slags and SPL, in addition to fees charged for recycling these materials. A large amount of the recovered aluminium concentrates is sold and  aluminium alloys. In the Secondary Aluminium operations of the Aluminium Salt Slags Recycling Services segment, Befesa collects and recycles aluminium scrap and other aluminium residues such as aluminium drosses, shavings and cuttings, and aluminium concentrates from, among others, aluminium foundries, scrap dealers and collectors, and primary aluminium producers. Befesa also generates aluminium concentrates itself during the salt slags recycling operations, producing secondary aluminium alloys from these aluminium residues. These are mainly sold to customers in the automotive and construction industries. Revenues from the Secondary Aluminium operations are mainly derived from the sale of secondary aluminium alloys. 20 Befesa Annual Report 2024 Inputs Financial rigour: Befesa’s focus is on securing volumes in its plants and maintaining resilient and fl generation. This is achieved by managing capital   distribute dividends to its shareholders. Leading technology & innovation: Befesa’s R&D strategy is designed to create value by developing sustainable improvements in the existing technologies, optimising operations and product  ffi and an improved environmental footprint. Macro trends: Befesa continues to execute its   fi  transition to electric vehicles (EVs). Highly qualified employees: In striving to be  fi  Outputs Shareholder value: Befesa aims to create value for  fl  gains for shareholders. Customer satisfaction: Improvements   development and enhanced customer service. Benefits to the environment: Befesa is continuously  customers to make their businesses more fi 1.9 million tonnes of residue each year, reducing the extraction of natural resources from the earth. Employee satisfaction: Although the Company  ff Activities Befesa has been a part of the circular economy for more than three decades and contributes by reintroducing valuable materials back into the production process. Clients: steel industry Clients: aluminium industry Steel Dust Recycling Services Aluminium Salt Slags Recycling Services Collection of steel dust Collection of salt slags and SPL Steel dust recycling services Salt slags and SPL recycling services WOX sold to zinc smelters Use of aluminium concentrates and payment for salt Clients: consumers ofzinc concentrates (smelters) Clients: secondary aluminium producers 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 21Befesa Annual Report 2024 Reduce Recycle EAF steelmakers (mini-mills, scrap recyclers) Aluminium recyclers Aluminium recyclers e.g auto parts Service fee to Befesa Service fee to Befesa Mill Storage Steel Dust Zinc smelters Galvanisation of steel Sale of zinc contained in WOX Sale of aluminium concentrate & melting salt WOX Spent absorbants Stack WOX Dissolution process Water Catalytic process Filter Salt Evaporation Aluminium concentrate Melting salt Aluminium oxide Condensates Hazardous components Slag Silos Material delivery and preparation LimeDust Cooler Filter Coke Mixer Waelz kiln Pyrometallurgical treatment in the Waelz kiln Salts Create environmental liabilitywithlegal obligation to recycle hazardous residue Salt slags Critical services for steel andaluminium producers 22 Befesa Annual Report 2024 Recover Reintroduce EAF steelmakers (mini-mills, scrap recyclers) Aluminium recyclers Aluminium recyclers e.g auto parts Service fee to Befesa Service fee to Befesa Mill Storage Steel Dust Zinc smelters Galvanisation of steel Sale of zinc contained in WOX Sale of aluminium concentrate & melting salt WOX Spent absorbants Stack WOX Dissolution process Water Catalytic process Filter Salt Evaporation Aluminium concentrate Melting salt Aluminium oxide Condensates Hazardous components Slag Silos Material delivery and preparation LimeDust Cooler Filter Coke Mixer Waelz kiln Pyrometallurgical treatment in the Waelz kiln Salts Create environmental liabilitywithlegal obligation to recycle hazardous residue Salt slags 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 23Befesa Annual Report 2024 Markets and sites 3 12 10 2 9 1 11 13 14 20 19 15 16 18 23 24 21 22 Crude steel dust recycling Stainless-steel dust recycling Oxide  Steel dust recycling services Installed capacity by plant 1 Duisburg Germany Crude steel dust 87 kt 2 Freiberg Germany Crude steel dust 194 kt 3 Asúa – Erandio Spain Crude steel dust 160 kt 4 Fouquières-lès-Lens France Crude steel dust 110 k t 5  Turkey Crude steel dust 110 kt 6 Gyeongju South Korea Crude steel dust 220 kt 7 Changzhou China Crude steel dust 110 k t 8 Xuchang China Crude steel dust 110 k t 9  US Crude steel dust 163 kt 10  US Crude steel dust 145 kt 11 Calumet, IL US Crude steel dust 135 kt 12 Palmerton, PA US Crude steel dust 200 kt 13 Gravelines France Stainless steel dust 110 kt 14 Landskrona  Stainless steel dust 64 kt 15  Spain Oxide 16 kt 16 Gravelines France  100 kt 17 Pohang South Korea  60 kt 18 Rutherford County, NC US fi 141 kt 1  fi 4 1,917 k t ANNUALLY INSTALLED CAPACITY TORECYCLE STEEL DUST (CRUDEAND STAINLESS) 1 24 Befesa Annual Report 2024 617 5 7 8 Aluminium salt slags recycling services Salt slags & SPL recycling Secondary aluminium production Installed capacity by plant 19 Lünen Germany Salt slags & SPL 170 kt 20 Hanover Germany Salt slags & SPL 130 kt 21 Valladolid Spain Salt slags & SPL 170 kt 22 Bernburg Germany Secondary aluminium 75 kt 23 Les Franqueses del Vallès Spain Secondary aluminium 66 kt 24 Erandio Spain Secondary aluminium 64 kt 470 kt ANNUALLY INSTALLED CAPACITY TORECYCLE SALT SLAGS AND SPL 205 kt ANNUALLY INSTALLED CAPACITY TOPRODUCE SECONDARY ALUMINIUM 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 25Befesa Annual Report 2024 Market environment reintroducing the strict production cuts seen in 2021 and 2022, instead  high level to support economic stability. As demand from real estate  consumption in China increasingly   projects, marking a structural transformation in the sector. In contrast to China’s contraction, Europe’s crude steel production  approximately 130 million metric tonnes in 2024. The recovery  infrastructure investments and a resurgence in the automotive sector,   despite this increase, European steelmakers continued to face fi from rising imports of cheaper steel from China.  uncertainty surrounding EU policy measures, particularly the Carbon Border Adjustment Mechanism),  on imported steel based on carbon emissions. Although designed to encourage sustainable steel production, the policy also complicated trade relations and added compliance costs for European producers. Companies such as  green steel investments, citing policy uncertainty and competitive pressures from outside the EU. The evolving steel market conditions in 2024 presented both challenges and opportunities. In the US, crude steel production fell by 2.4%, totalling 81.4 million metric  primarily attributed to higher energy  demand from the manufacturing  broader economic uncertainties. Rising competition from imported  producers, prompting a strong policy response from the US Government. For Befesa, the evolving steel market conditions in 2024 presented both challenges and opportunities. Although overall steel production   Crude steel production and demand In 2024, global crude steel production experienced a slight decline, totalling approximately 1.88 billion metric tonnes, a 0.9% decrease from 2023. Although the industry maintained some momentum from the previous year, challenges such as economic  and rising trade tensions contributed to this contraction. Infrastructure investments, particularly in emerging markets, helped to mitigate a steeper decline, but structural issues in key   China’s crude steel output fell by 1.7% in 2024, reaching around 1.005 billion fi   had historically been a major driver of steel consumption. Despite this, the Chinese Government refrained from 26 Befesa Annual Report 2024 created uncertainty, the long-term trajectory of steel production remains   increasing emphasis on recycling. For Befesa, this evolving landscape reinforces the strategic importance of steel dust recycling, zinc recovery and sustainability-driven business models. By adapting to shifting trade policies, leveraging technological advancements in recycling and  ff positioned to capitalise on the steel industry’s long-term transformation. Secondary aluminium production and demand The European automotive industry fi ff aluminium sector. Germany, as the   nearly 250,000 manufacturing jobs lost since the onset of the COVID-19  consumer demand and increasing competition from China all contributed  disruptions further aggravated the crisis, as events like the mid-2024 fl aluminium suppliers to halt operations. This led to production delays for manufacturers, exposing the industry’s vulnerability to disruptions in the supply of key materials. As the automotive industry struggled, the demand for secondary aluminium ff suppliers of recycled aluminium components. The European Aluminium Association reported a 2% drop in secondary aluminium production in fi  orders from automakers. This decline resulted in market oversupply, pushing fi recyclers. At the same time, the availability of aluminium scrap became  Asia tightened supply in Europe,  secondary producers. Despite these short-term setbacks, the long-term outlook for secondary aluminium remains strong, particularly   Automakers are increasingly turning  ffi the performance of electric vehicles  essential for extending battery range. European sustainability regulations are also accelerating this shift, as stricter carbon emissions targets and circular economy policies encourage greater use of recycled materials in car manufacturing. Advancements in high-strength aluminium alloys and closed-loop recycling systems further reinforce the role of secondary aluminium in the future of automotive production. While the industry currently navigates economic uncertainty and supply chain disruptions, the broader trends  emerge as a key material in next- fi   (EAF) steelmaking – driven by ff ff  steel dust recycling services. The increasing adoption of EAF technology, particularly in Europe and North America, led to a greater generation of EAF steel dust, directly fi The demand for zinc recovery from recycled steel dust also remained strong, as the galvanisation of steel to improve durability and corrosion resistance continued to rise. With higher zinc content in scrap  to capitalise on this trend by enhancing ffi and expanding its role in the circular economy.  protectionist policies, particularly in the US, introduced potential challenges for international supply chains, making it increasingly important for Befesa to leverage its presence in multiple markets to mitigate risks. In Europe, the regulatory landscape surrounding carbon emissions and sustainability continued to evolve, shaping the competitive environment for steel recyclers. Despite a slight global production decline, 2024 marked an important transition year for the steel industry: China’s shifting demand structure, Europe’s push for sustainability and the US’s return to protectionist trade policies all played crucial roles in shaping market dynamics. Although short-term pressures, including trade  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 27Befesa Annual Report 2024 Development of zinc treatment charges The benchmark zinc treatment charge (TC) is negotiated annually   agreed benchmark TC usually  Befesa’s customers, the zinc smelters, deduct the TC from the amount of zinc contained in Waelz oxide (WOX) (typically 85% of the zinc London  is payable to Befesa. For 2024, the benchmark TC    Development of metal prices fi recycling and aluminium salt slags recycling operations are partially fl supply and demand dynamics of certain base metals.  fl supply constraints, macroeconomic pressures and shifting market dynamics. At the beginning of the   the year, prices steadily increased,  fl gain of about 13%. The average monthly price for December 2024  fi previous year. The supply side played a crucial role in shaping zinc’s price trajectory. Mining output struggled due to operational challenges and declining ore grades, tightening the supply of zinc concentrates. In addition, Chinese     disruptions led to concerns over fi  On the demand side, global economic conditions created a mixed environment for zinc consumption. fl rates in major economies dampened demand in key industries such as construction and manufacturing. Despite these challenges, zinc fi strategic stockpiling and continued  analysts predict that 2025 could bring a shift in market dynamics. As mine production recovers and fi market is expected to transition into        price performance for zinc, shaped by supply-side constraints, economic uncertainties and investor speculation. Although the market remains dynamic, expectations of increased supply in 2025 could alter the trajectory, potentially leading to a moderation in prices. Zinc price hedging Befesa’s hedging strategy has proven to be a key element of its business model in managing zinc price volatility and increasing the visibility of its earnings and the stability of cash fl been a part of Befesa’s business model for the last 20 years. The main goal of hedging is not to  them over time versus zinc price fl fl enabling the Company to fund its  Befesa’s strategy is to hedge 60% to 75% of the expected volume of zinc contained in the WOX and paid for by zinc smelters for a period of one to  Most of the zinc hedges are  also provides a hedging on the FX fl LME is quoted in US dollars. Befesa has taken the opportunity of the volatility in the zinc price seen over the last months to extend its hedging book until December 2026. This level of hedging represents an all-time high level of hedging for  20 million euros of incremental   Befesa’s hedging strategy remains unchanged and continues to be a key element of Befesa’s business model, providing earnings visibility and  from zinc price volatility. Market environment continued 28 Befesa Annual Report 2024 Aluminium prices The aluminium alloy prices referenced by the Free Metal Bulletin (FMB) – an average independent quotation based on prices provided by the major secondary aluminium players in the European market – traded  The aluminium alloy FMB prices increased in 2024 by 5% or   Development of energy prices In 2024, European energy prices continued their stabilisation trend, bringing both challenges and opportunities for Befesa. Coke prices  normalisation in the fourth quarter of the year. On average, coke prices  in 2023, although they remained about 40% above the levels recorded  correction helped to alleviate some cost pressures on Befesa’s Steel Dust operations, although coke fi than pre-crisis levels.   around 20% compared to 2023. By 2024, electricity costs had returned to levels similar to those seen in 2019, providing much-needed relief for energy-intensive businesses. This decline had a particularly positive impact on Befesa’s Aluminium Salt  expenses contributed to improved ffi   experienced a 10% year-on-year decline. By 2024, they had stabilised to around the average levels of 2021. ff relief to Befesa’s operations, fi  fl Overall, 2024 marked a year of relative stability in energy markets for Befesa. The decline in coke prices reduced cost pressures on the Steel Dust  prices improved the cost structure of the Aluminium Salt Slags operations. Although energy costs remained above pre-crisis levels in some areas,  supported more predictable operating conditions for the Company. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 29Befesa Annual Report 2024 Zinc LME price  1 ) Zinc LME stock (thousand tonnes 2 ) Alu FMB price (€ per tonne 1 ) Aluminium FMB prices Zinc LME prices Alu LME stock (thousand tonnes 2 ) 1 LME zinc daily cash settlement prices per lme.com 2 LME zinc daily stock volumes per lme.com 1  players in the European market 2 Primary aluminium LME stock volumes Average 2018 2019 2020 2021 2022 2023 2024          €2,470 €2,276 €1,979 €2,544 €3,302 €2,450 €2,569 Stock kt 196 77 144 229 92 87 249 Average 2018 2019 2020 2021 2022 2023 2024  €1,715 €1,398 €1,424 €2,112 €2,438 €2,188 €2,306 Stock kt 1,159 1,118 1,401 1,399 530 510 753 $5,000 $4,000 $3,000 $2,000 $1,000 350 300 250 200 150 100 50 00 2018 2019 2020 2021 2022 2023 2024 LME $/t LME stock kt €4,000 €3,000 €2,000 €1,000 2500 2000 1500 1000 500 00 2018 2019 2020 2021 2022 2023 2024 FMB €/t LME stock kt Market environment continued 30 Befesa Annual Report 2024 Befesa energy price evolution by source Zinc price hedging extended until Q4 2026 at all-time high level of €2,655. Focus on Q1 2027 Coke price continued further normalisation in FY24; Gas & electricity prices stabilised around 2021 levels 1 London Metal Exchange (LME) zinc daily cash settlement prices 2 ff  3   Average 2023 2024 2025 2026 Befesa’s blended €2,425 €2,549 – – Befesa’s hedges €2,417 €2,521 €2,640 €2,655 Befesa’s hedging strategy unchanged •  • 60% to 75% of zinc equivalent volume • Befesa provides no collateral Befesa’s hedging strategy has proven successful providing price visibility and   in zinc LME price represents €7–8m impact on  Coke y Befesa’s coke price continued further  and 2023 average y 2024 price average c.–20% vs. 2023 average and c.40% above 2019 - 2021 average price level Electricity y Electricity prices decreased in 2024 (-20%  Gas y  stabilised around average levels of 2021 2019/20 2021 2022 2023 2024 Electricity € per MWh 105 €/MWh 47 €/MWh 179 €/t Gas € per MWh Coke € per tonne 250 200 150 100 50 0 $3,500 $3,000 $2,000 $2,500 $1,000 $500 $1,500 0 2023 2024 2025 2026 Befesa’s hedges 3 Befesa’s blended 2 Zinc LME 1 60 -70% of zinc exposure hedged for 2025 and 2026 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 31Befesa Annual Report 2024 Strategy Despite being part of cyclical industries such as steel, zinc and aluminium, the Company’s service- focused approach and prudent fi against market volatility. Befesa’s  to maintain long-term relationships  revenue streams. The Company fl through a robust hedging policy that has been consistently applied for over  and salt slags business has been fi consistently delivering EBITDA margins above 35%. Befesa operates a unique business model that benefits from high barriers to entry, ensuring strong margins and consistent performance through economic cycles. Global megatrends: Decarbonisation and EVs   as decarbonisation, energy transition and stricter environmental regulations. The Company remains committed to its core businesses of steel dust and salt slags recycling,   EAF steel production is expected to accelerate as part of global ff demand for Befesa’s recycling services. In addition, rising demand   importance of secondary metals.  circular economies and more stringent environmental regulations further support the Company’s  demand are set to rise, driven by     resistant coatings.  fi  particularly in the steel and automotive industries. 32 Befesa Annual Report 2024 The steel industry is actively transitioning to less carbon-intensive production methods. Traditionally, blast furnaces (BFs) using iron ore and coking coal have dominated steel  use steel scrap and electricity, emit fi – approximately seven times less per tonne of steel produced. This fi  energy sources. The global shift towards decarbonisation presents significant growth opportunities for Befesa, particularly in the steel and aluminium industries. Projections indicate that the EAF’s  rise from 28% in 2023 to 41% by 2030. This surge is driven by an increased demand for sustainable steel production methods. China, the  elevate its EAF steel production to 20% by 2030, up from the current 10%. Similarly, the European Union aims to boost EAF production to over  decarbonisation goals. Befesa, specialising in recycling steel dust from EAF operations, stands to fi  recyclable steel dust increases, expanding the market for Befesa’s recycling services.  EVs is another decarbonisation trend ff ff ffi to increased aluminium usage. Aluminium content in vehicles is projected to reach 256 kilograms per vehicle by 2030, up from 205 kilograms in 2022. This rise is attributed to aluminium’s favourable properties, such as  are essential for improving EV performance and range. This trend is expected to drive higher demand for aluminium and, consequently, an increased need for salt slags recycling capacity – a service Befesa provides. The above-mentioned trends are the   In Europe, the EU’s decarbonisation initiatives are set to increase EAF steel production to over 50% by 2030, adding approximately 350,000 tonnes to the market Befesa serves. North America, already at a 70% EAF production rate, anticipates further  Befesa’s recycling services. China plans to raise EAF production to 20% by 2030. China is constructing  capacity, potentially generating an additional one million tonnes of steel dust annually. In summary, the global decarbonisation movement is reshaping industries central to Befesa’s operations. The shift   for recycling services, positioning Befesa to capitalise on these  Zinc demand The global demand for zinc is set to fi largely driven by its critical role in the energy transition. As economies shift  sustainable technologies, zinc’s applications in galvanisation, battery storage and infrastructure are becoming increasingly important. One of the primary drivers of zinc demand is its use in protecting steel structures from corrosion. This is    zinc-coated steel ensures durability in   the need for zinc in these sectors is expected to rise substantially. In fact,  applications is projected to increase from around 109,000 metric tonnes in 2020 to over 364,000 metric tonnes  for the largest share. Beyond galvanisation, zinc is also emerging as a key player in energy storage solutions. Zinc-ion and zinc-air batteries are gaining attention ff alternatives to lithium-ion batteries. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 33Befesa Annual Report 2024 ff solutions for grid storage and EVs, providing another major avenue for  fi   fi Although demand is rising, challenges on the supply side could create market imbalances. Global zinc mine  output dropping for three consecutive years. In 2024, production fell by 1.4% to just over 12 million tonnes, exacerbating concerns about future availability. Initially, analysts projected a slight surplus for 2024, but tightening supply conditions have shifted  fi This combination of increasing demand and constrained supply suggests that zinc could become an even more valuable commodity in the years ahead. The energy transition is positioning zinc as an essential material for modern infrastructure and energy storage, ensuring that its role in the global economy remains strong.    Befesa business plan fi presented in November 2022, is being fi  ff in the various markets to pursue  The Company prioritises reducing  expansion projects such as the Palmerton and Bernburg plant upgrades. European projects, including the expansion of steel dust  remain on track, but the planned expansion in China has been put on hold due to the prevailing market conditions. Capital expenditures are  approximately €100 million allocated per year, balancing maintenance and  remains focused on generating fl sustaining a dividend payout ratio of 40–50% of net income. Strategy continued 34 Befesa Annual Report 2024 Befesa’s operations in the US are  ffifi activities. The steel dust recycling fi in operational synergies and best practice implementation, leading to a notable increase in EBITDA per tonne, despite high coke prices. The Palmerton plant expansion is fi  a second kiln to be commissioned in H1 2025. The Company has already secured 60 kt of incremental EAF dust from existing customers and aims to achieve utilisation rates of 80% by 2025 and close to 90% by 2026. fi executing a structured turnaround plan focusing on quality improvement, increased utilisation and cost optimisation. The Company is targeting an annual cost base reduction of €20–25 million by ffi maintenance, residue treatment, operations and supply chain management. Although EBITDA contribution from this segment has    This combination of increasing demand and constrained supply suggests that zinc could become an even more valuable commodity in the years ahead. In China, Befesa is carefully  further expansion plans. The Company  EAF dust recycling plants in Jiangsu and Henan, driven by increased EAF steel production and evolving  the ongoing real estate crisis   fi  strong regulatory enforcement, has   province, continues to experience subdued demand. Despite challenging short-term conditions, Befesa remains optimistic about the mid- to long-term potential in China, driven by increased EAF penetration and stricter environmental  focusing on optimising its existing operations, improving utilisation rates fl Befesa’s business model remains highly resilient, supported by its strategic positioning, long-term customer relationships and disciplined fi market conditions present short-term challenges, the Company’s alignment   maintaining a careful balance fi  capitalise on emerging opportunities  improve, China. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 35Befesa Annual Report 2024 Results of operations Revenue Total revenue increased in 2024    prices in Steel Dust Recycling Services and increased activity in the Salt Slags business. Revenue  2023 2024 1,180.6 1,239.0 €58.4m or 4.9% EBITDA & EBIT Total adjusted EBITDA increased in  (2023: €182.0 million). Detailed by volume, price and cost components, the €31.4 million increases in 2024 are explained  y Volumes (+€1.5 million): Solid steel dust volumes in Europe and  in the remaining geographies of    y Metal prices (+€33.9 million): 5% higher zinc LME prices (€7 million) and zinc hedging prices      This section includes the consolidated financial information of Befesa S.A. from its existing operations, Steel Dust Recycling Services and Aluminium Salt Slags Recycling Services. More detailed information is available in the “Consolidated financial statements” section of this Annual Report. y  fi ff  coke, gas and electricity prices, and the positive impact from productivity and synergies. Adjusted EBITDA & margin  2023 2024 €31.4m or 17.2% 15.4% 17.2% 182.0 213.4 Total adjusted EBIT increased by 22.3% to €124.4 million in 2024 (2023: €101.7 million). Adjusted EBIT & margin  2023 2024 €22.7m or 22.3% 8.6% 10.0% 101.7 124.4 Total EBITDA and EBIT in 2024  +€11.6 million, respectively. These  fl non-recurrent costs. Total reported EBITDA amounted to €204.6 million  EBIT amounted to €112.9 million in  Further information regarding these adjustments is available in the fi section of this Annual Report. The reconciliation of EBITDA to IFRS operating results (EBIT) is available in the “Consolidated fi this Annual Report. Financial result & net profit fi by 1.5% to -€38.0 million in 2024 (2023:  ff ff ff  fi In July 2024, the Company fi of its existing debt, consisting of a €650 million senior secured Term Loan  2029, a €100 million revolving credit facility due July 2028 and a €35 million guarantee facility due July 2028. fi fi ff fi covenant-lite terms as the  36 Befesa Annual Report 2024  Euribor +275 bps and includes a margin  50 bps margin reduction if the  fi to shareholders decreased by -12.3% in 2024 to €50.8 million (2023: €58.0 million). Although the factors outlined previously have a positive ffff higher corporate tax expense in 2024. As a result, earnings per share (EPS) in 2024 decreased accordingly, by -12.3% to €1.27 (2023: €1.45). €213m ADJUSTED EBITDA IN 2024 (€182M IN 2023) €51m NET PROFIT IN 2024 (€58M IN 2023) €1.27 EARNINGS PER SHARE IN 2024 (€1.45 IN 2023) 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 37Befesa Annual Report 2024 Financial position & liquidity Net debt & leverage Gross debt at year-end 2024 increased to €721.5 million (year-end 2023: €710.8 million), driven by the fi used to acquire the remaining 50% stake in Befesa Zinc Recytech, S.A.S. Net debt at year-end 2024 increased by 2.5% to €619.0 million (year-end 2023: €604.0 million). The €619.0  adjusted EBITDA resulted in a x2.90 net leverage at year-end closing (year-end 2023: x3.32). Befesa  all debt covenants. Credit ratings During 2024, Standard & Poor’s and  credit ratings assigned to Befesa, as  Operating cash flow fl by 30.1% to €191.8 million (2023:    paid in 2024. ff fl   million (2023: -€16.6 million), related to the recovery of excess prepayments fi fi   on the Company results.  €78.6 million (2023: €104.8 million),   (€22.7 million), mainly related to the Palmerton plant refurbishment. In addition, the acquisition of the remaining 50% of Befesa Zinc  invested in the period.  fffi amounted to -€48.2 million in 2024 (2023: -€61.6 million). Dividends of €29.2 million or €0.73 per  in July 2024.  fi fl amounted to -€4.2 million. Cash on hand stood at €102.5 million. This,  (Revolving credit facility) – entirely  than €202.5 million liquidity. Credit ratings for Befesa, S.A. Year-end 2024 Year-end 2023 Moody’s Ba2 (outlook stable) Ba2 (outlook stable) Standard & Poor’s BB (outlook stable) BB+ (outlook negative) Net leverage ratio evolution (Net debt/Adjusted EBITDA) x2.14 2018 2019 2020 2021 2023 20242022 x2.61 x3.10 x3.32 x2.38 x2.56 x2.90 38 Befesa Annual Report 2024 €619m NET DEBT AS OF DECEMBER 2024 (€604M AS OF DECEMBER 2023) x2.90 NET LEVERAGE AS OF DECEMBER 2024 (x3.32 AS OF DECEMBER 2023) Net debt  31 December 2024 31 December 2023 fi 684.6 672.7 fi 36.9 38.1 Financial indebtedness 721.5 710.8  (102.5) (106.7) fi¹ – (0.1) Net debt 619.0 604.0 Adjusted EBITDA  213.4 182.0 Net leverage ratio x2.90 x3.32 1 fi 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 39Befesa Annual Report 2024 Segment information Steel Dust recycling services Volumes of EAF steel dust recycled remained stable in 2024 at 1,210,685 tonnes (2023: 1,194,771 tonnes). The performance across Befesa’s  US, EAF steel dust treated volumes  challenging steel production levels.   ff real estate crisis. With these volumes, Befesa’s EAF steel dust recycling plants ran at an average utilisation rate of about 70% in 2024 (2023: 70%). The volume of WOX sold remained stable at 400,819 tonnes in 2024 (2023: 399,109 tonnes). fi Carolina ran at high utilisation  fi EAF steel dust throughput & loadfactor (Thousand tonnes,  2023 1,194.8 69.5% 70.4%2024 1,210.7 15.9 kt or +1.3% Waelz oxide (WOX) sold (Thousand tonnes) 2023 399.1 2024 400.8 1.7 kt or 0.4% Befesa organises its activities into two business segments: Steel Dust Recycling Services and Aluminium Salt Slags Recycling Services. Revenue in the Steel Dust business increased by 5.1% to €825.6 million in 2024 (2023: €785.6 million). This  to a higher zinc blended price and a  stable volumes. Revenue – Steel Dust Recycling Services  825.6 €40.0m or 5.1% 2023 2024 785.6 Blended zinc average price  €125 per tonne or +5.1% 2,425 2,549 2023 2024 Adjusted EBITDA in the Steel Dust business increased by 27.1% to €170.4 million in 2024 (2023:   explained by higher zinc LME prices   ff fi Consequently, adjusted EBITDA as a per cent of revenue increased to 20.6% in 2024 compared to 17.1% in 2023. Adjusted EBITDA & margin – SteelDust Recycling Services (€ million, % margin of revenue) 2023 134.1 2024 170,4 €36.3m or 27.1% 20.6% 17.1% Adjusted EBIT in the Steel Dust business increased by 43.2% to €102.1 million in 2024  drivers similar to the EBITDA development, as indicated above. In 2024, EBITDA and EBIT in Steel  for €8.8 million and €11.6 million, respectively, mainly driven by fl non-recurrent costs. Reported EBITDA amounted to €161.6 million (13.6%   Further information regarding these adjustments is available in Note 2.6 of the “Consolidated fi this Annual Report. Adjusted EBIT & margin – SteelDust Recycling Services (€ million, % margin of revenue) 2023 71.3 2024 102.1 €30.8m or 43.2% 9.1% 12.4% Aluminium Salt Slags recycling services Salt Slags Subsegment Salt slags and SPL recycled volumes increased in 2024 by 18.0% to 426,281 tonnes (2023: 360,770 tonnes). This improvement  plant being back in operation throughout 2023. On average, during 2024, Salt Slags recycling plants operated at 91% (2023: 77%) of the latest installed annual recycling capacity of 470,000 tonnes. 40 Befesa Annual Report 2024 Salt slags & SPL volumes & load factor (Thousand tonnes recycled,  90.8% 76.8% 2023 360.8 2024 426.3 65.9 kt or 18.2% Revenue in the Salt Slags subsegment increased by 22.7% to €105.9 million in 2024 (2023: €86.3 million). The  mentioned above. Revenue – Salt Slags subsegment  2023 86.3 2024 105.9 €19.6m or 22.7% EBITDA in the Salt Slags subsegment increased by 22.2% to €31.8 million in 2024 (2023: €26.0 million), mainly related to the aforementioned factors,  energy prices. Adjusted EBITDA & margin – SaltSlags subsegment  2023 26.0 2024 31.8 €5.8m or 22.2% 30.1% 30.0% EBIT in the Salt Slags subsegment increased by 18.7% to €19.9 million in  drivers similar to the EBITDA development. Adjusted EBIT & margin – Salt Slags subsegment (€ million, % margin of revenue) 2023 2024 19.9 €3.1m or 18.7% 19.4% 18.8% 16.7 Secondary Aluminium subsegment Aluminium alloy production volumes increased by 1.8% in 2024 to 171,278 tonnes (2023: 168,216 tonnes). Overall, in 2024, Secondary Aluminium production plants operated at about an 84% utilisation rate on average (2023: 82%). Secondary aluminium alloy volumes &load factor (Thousand tonnes produced, % of annual capacity) 2023 168.2 2024 171.3 3.1 kt or 1.8% 82.1% 83.6% Aluminium alloy average marketprice  2023 2,188 2,3062024 €118 per tonne118 or 5.4% Revenue in the Secondary Aluminium subsegment increased in 2024 by 2.0% to €367.3 million (2023: €360.2 million). Revenue – Secondary Aluminium subsegment (€ million) 2023 360.2 2024 €7.1m or 2% 367.3 EBITDA in the Secondary Aluminium subsegment decreased by -48.3% to €11.2 million in 2024 (2023: €21.6 million). The EBITDA decrease is explained by the strong decrease in  premium in the sale of aluminium alloys   ff EBITDA & margin – Secondary Aluminium subsegment  2023 21.6 2024 11.2 -€10.5m or -48.3% 6.0% 3.0% EBIT in the Secondary Aluminium subsegment decreased by -79.3% in 2024 to €2.9 million  fl EBITDA development. EBIT & margin – Secondary Aluminium subsegment  2.9 -€11.0m or -79.3% 3.8% 0.8% 2023 13.8 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 41Befesa Annual Report 2024 R&D and innovation Befesa’s research and development (R&D) strategy is designed to create value by developing sustainable improvements to existing technologies, optimising operations and product quality, developing new processes to achieve higher recycling efficiency, reducing costs and improving environmental conditions. All of this contributes to sustainable development and enhanced customer service. Strategic focus and approach Befesa’s R&D strategic plan aims to be a technologically competitive reference in providing sustainable environmental services that recycle hazardous residues from the steel and  on steel dust, salt slags and SPL. The R&D activities are organised into  technological and sustainable environmental service solutions that are adapted to the technological processes of each of the businesses.  basis to exchange the achievements, fi of their respective projects. Employees in R&D Befesa’s R&D strength is based on the fi across various specialisations. In  dedicated to R&D activities. Of these,  Recycling Services segment and six  Recycling Services segment. Expenses on R&D The expenses on R&D activities in 2024 increased by 3% to €4.5 million (2023: €4.4 million). In the Steel Dust Recycling Services segment, expenses on R&D activities in 2024 increased by 40% to €2.5 million (2023: €1.8 million). In the Aluminium Salt Slags Recycling Services segment, expenses on R&D activities in 2024 decreased by 22% to €2.0 million (2023: €2.6 million). Collaborations network One of the pillars of Befesa’s R&D strategy is external collaboration. This is primarily executed via research groups and institutions, public research centres, universities and other industrial enterprises that  on R&D projects. Befesa is a founding partner of the Basque Innovation Agency and the  coordinate and promote innovation in the Basque Country. Befesa is a member of the Labein Tecnalia Foundation. This is a private fi business involvement that creates partnerships in their markets to develop innovative capacity using technology as a tool to increase competitiveness. Befesa is also a member of European Aluminium, a Belgium-based industry association that represents the entire aluminium value chain in Europe: fi fi products, recyclers and national aluminium associations. Befesa has developed projects in     GHI, CIE Automotive, Condorchem,  IAB, BFI and Ibutec (in Germany). Befesa has also developed or is currently undertaking projects in  the University of the Basque Country, the University of Valladolid and  the RWTH Aachen University (in   Befesa’s R&D strength is based on the teams’ experience and qualifications across various specialisations. Main achievements and projects in 2024 In the Steel Dust Recycling Services segment, focus areas  y Corporate services related to surveillance of the performance of the plants, the regulatory environment and the latest technological developments   y Internal development of a standardised Befesa zinc Waelz  best practices across Befesa's  y Determination of the most adequate characteristics and testing of ff  usable quantities in Befesa’s zinc  42 Befesa Annual Report 2024 y Dust2Value: 3-year multi-company EU-funded project for recycling residues from the steel industry using hydrogen as a reducing agent  y Conducting a study of the EV  its recycling by pyrometallurgical  y Characterisation and simulation of stainless-steel dust residues for improvements of process ffi y Evaluation of alternative carbon carriers, acting as reducing agents in Befesa's stainless steel plants, as  CO y Investigations for solutions on   y A study and initial trials of sludge treatment for improving residence ffi its stainless steel plants. In the Salt Slags subsegment of the Aluminium Salt Slags Recycling Services segment, the main research activities focused on these aspects: y fi secondary aluminium oxide to  alternative to mineral bauxite (to be used in the refractory industry) at  y The obtention of high-pure     y The study and development of an alternative treatment for SPL, to  y The development of a road map to recover main gases, hydrogen and methane from the complex-rich  slag valorisation. In the Secondary Aluminium subsegment of the Aluminium Salt Slags Recycling Services segment, the main research focus included: y The optimisation of the aluminium alloy production process in order to introduce improvements and technologies to increase energy ffi y The development of secondary   and the demonstration of the  aluminium drosses and scrap to produce high-pure silicon and master aluminium alloys by  y The decarbonisation of Befesa’s  economy, using this as an alternative fuel to natural gas and evaluating the impact of the product – exhausted gases –  y  cleaning and protection products for the primary aluminium industry. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 43Befesa Annual Report 2024 Projects in the research pipeline In the Steel Dust Recycling Services segment, projects in 2025 include the continuation of projects launched in previous years and additional  y Corporate services related to surveillance of the performance of the plants, the regulatory environment and the latest technological developments   y Internal development of a standardised Befesa zinc Waelz  best practices across Befesa's  y Dust2Value: second year of this multi-company EU-funded project aiming at a total replacement of fossil carbon by hydrogen as a reducing agent, thus leading to a CO emissions neutral operation for  y Investigation on alternative biochar sources and optimal physical preparations to reduce the CO emissions of its zinc-recycling   y Continuous evaluation of  acting as reducing agents in its    y Investigations for solutions on   y Industrial-scale trials of sludge treatment for improving residence ffi  y Pyrometallurgical lab scale tests of ff y Characterisation and simulation  and binders for improving process ffi y Investigation on the valorisation of the Waelz slag via grinding and fl y Investigation on the Waelz process ffi increasing process kinetics via a reduced presence of nitrogen. In the Aluminium Salt Slags Recycling Services segment, the major R&D  y The use of high-pure secondary aluminium oxide to manufacture metallurgical grade alumina and ff y RESPLA: An alternative SPL recycling process, focused on the valorisation of its products y HyInheat: The demonstration of  remelting process y LIFE Hydrogas: The recovery of  the residue stream of salt slags valorisation, to be used as an alternative fuel y ECOESC: Optimization of Energy Utilization in the Gaseous Stream of the Salt Slag Valorization Process y Improve the recycling process to make it more environmentally ff ammonia emissions R&D and innovation continued 44 Befesa Annual Report 2024 45Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information Risk and opportunities Introduction Befesa considers the management of risk to be one of the key topics the  compliance system must be based on a detailed risk analysis. For this reason, Befesa has a risk management system  to analyse, evaluate and manage the ff Befesa’s operations. The purpose of Befesa’s RMS is the fi ffff the Company. The system also  in decision-making through the provision of strategies aimed at risk management and control. The RMS  y The elaboration of a risk map y fi y The implementation and  y The implementation of action plans y  Risk methodology  Management Standard for carrying out a risk analysis. The rationale is that  fi and controlled by Befesa itself. The process is divided into   fi fifi  to be involved in the risk analysis. All the business segments are incorporated into the project, including top management, the directors of business segments, fi HR, IT, investor relations, internal audit and compliance, and the industrial plants. Each year –  a documentation analysis – fi 2. Risk assessment process: After compiling the risk catalogue, the next step is the risk assessment. This assessment is carried out by people from ff included in the scope. They are  risk assessment methodology and necessary indications.  Very high High Medium    Medium High Very high Probability Impact In 1 2 2 3 3 1 2 3 3 4 2 2 3 4 4 2 3 3 4 5 3 4 4 5 5 Risk management at Befesa is a vital component of the overall management and control system. Befesa’s risk management system 46 Befesa Annual Report 2024 To assess risks, it is necessary to   manner. The risk score (R) is computed as the Cartesian product of I (impact) x P  The probability (P) describes the likelihood of occurrence or degree of verisimilitude of the risk (based on past experiences). Impact (I): Financial impact Operational impact Legal impact Reputational impact Global impact = maximum fi reputational) Risk map fi fi fi It is important to highlight the fact that all the individual risks are mitigated  individually listed on the risk map. In addition to the operational risk map, Befesa has developed a human rights risk map, encompassing all the human rights outlined in the Universal Declaration of Human Rights. Each right is systematically analysed for  devised to prevent its violation, and control measures established for the same purpose. Furthermore, Befesa  remediation procedures in case of non-compliance. fi medium, high or very high, depending on the assessment. Risk monitoring Befesa’s RMS is a systematic mode fi treatment of risks. Therefore, it must not be understood to be a project fi time but as an exercise aimed at continuous improvement that requires updating on a regular basis. The risk analysis and risk map are   controls to mitigate risks. In this sense, the risk map must fl  fl  To guarantee proper monitoring of the risks, Befesa has an Internal Risk Committee (IRC). The IRC is the body in the Company that is in charge of the  included in the risk map. The IRC is composed of the Executive Chair, the CEO, the CFO, the vice presidents of the business segments and the corporate directors. The committee must ensure that: y The actions and strategies proposed to mitigate risks are ffffi  y ffi improve the assessment of existing    y fi not previously detected has been carried out. The risk analysis, risk map and mitigation actions are presented to the Audit Committee and Board of Directors of Befesa on an annual basis  fi fi   Financial risks Commodity prices Befesa has appropriate risk and  An integral part of Befesa’s risk  and manage its risk that is related to fl may not be successful in obtaining long-term hedges for all volumes desired, and it is generally more ffi volumes of zinc over longer periods of time. Consequently, Befesa’s main risk management tool is its zinc hedging   level of 60% to 75% of Befesa’s annual tonnage of zinc payable output. The combined global hedge book in place as of the date of this Annual  pricing visibility up to December 2026.  price amounted to €2,521 per tonne on      per tonne in the year. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 47Befesa Annual Report 2024 ff  and non-hedged volume) averaged  (2023: €2,425 per tonne). As of the date of publication of this Annual    tonne for 2025, and about €2,655 or    1.10 for 2025 and 2026. Befesa does not provide any collateral for the contracted hedges and conducts its hedging programme  Foreign exchange Befesa’s functional currency is the  and operations in a number of  Turkey, South Korea, China and the  in currencies other than the euro.  may operate in additional jurisdictions   risk management processes in place regarding the risk of foreign exchange rates. One of several tools Befesa uses  and transacting those hedges, primarily euro-based versus the LME prices being quoted in US dollars. For 2024, Befesa had hedged 163,233 tonnes of zinc payable output (2023: 138,647 tonnes). This represents 69% (2023: 64%) of the zinc payable output sold by Befesa in 2024. Of the 163,233 tonnes     information on the hedging strategy is  this Annual Report. Capital structure At 31 December 2023, the facilities agreement consisted of a €626 million senior secured Term Loan B (TLB)  July 2026, a €75 million revolving credit facility (RCF) maturing in July 2025, and a €35 million guarantee facility maturing in July 2025. In July 2024, the company successfully completed the fi consisting of a €650 million senior  extension due July 2029, a €100 million revolving credit facility due July 2028, and a €35 million guarantee facility due July 2028. fi fi  ratio. The facility’s long-term maturity date of July 2029 and all other documentation terms, such as the covenant-lite terms, remain unchanged. The Term Loan B has a    margin reduction if leverage ratio  A €100.0 million Revolving Credit Facility (RCF) is part of the capital structure and continued to be fully  had €202.5 million cash on hand.  ff and customers. This could adversely tighten or lengthen the payment terms  Interest rates  fi relating to its variable rate indebtedness and increase the costs fi  the interest rate risk on a regular basis. With 48.6% of the €650 million  fi to July 2026, the short-term interest rate risk is partially mitigated. Financial controls & reporting Befesa’s internal control system, fi   The purpose of the internal control and accounting system is to ensure that all transactions are adequately accounted fi fi The internal control system ensures   fi fi statements are produced in a timely  Group level and segment level ensure that potential errors are detected and promptly corrected.  and the Audit Committee occur regularly and form part of the control  Risk and opportunities continued 48 Befesa Annual Report 2024 monitors changes to the accounting standards, and advisors from external, specialized parties notify Befesa of changes and complex accounting matters to avoid misstatements. Befesa’s consolidated and selected subsegments and single entities’ fi audits. These audits form a key part   fi controls and reporting. Befesa strives to continuously improve its risk management and internal control  fl further detailed in “Consolidated fi this Annual Report. Non-financial risks Industry and business risks Befesa is exposed to risks and opportunities related to the level of activity of the global economy – in particular, the level of economic activity in the jurisdictions of the markets that Befesa serves in Europe, Asia and the US. The business is dependent on the availability of the materials that the  fi Steel Dust Recycling Services segment, and salt slags and aluminium residues in the Aluminium Salt Slags Recycling Services segment.   ff resulting in a reduction in the demand for Befesa’s services and products. One important initiative to address  to diversify Befesa’s global footprint from Europe to the US and the fi   Nevertheless, the global economy ff events, such as pandemics, global shortages of necessary products and the Russia-Ukraine War. fi consumers of the WOX that Befesa produces in the Steel Dust Recycling Services segment. These smelters typically experience a variation in demand for their products as a result of a change in the level of activity in the automotive and construction industries, among others. For the Aluminium Salt Slags  the salt slags and aluminium residues are received from companies operating in the automotive and construction industries in Europe. Because of this, the demand for and pricing of Befesa’s services and products is to a degree dependent on the developments in the automotive and construction industries. Environmental risks   regulations. These include, but are not limited to, increasingly stringent   Befesa operates.  permits and authorisations to be obtained as they relate to Befesa’s business. Certain procedures need to  and delivery of manifests and other   This is so that the movement and management of hazardous residues are properly documented in terms of the location of generation and fi Generally, Befesa could be held liable for mismanaging hazardous residues from the moment Befesa becomes contractually responsible for its management from customers’ facilities. Liability can extend to the point of departure from customers’ facilities, depending on Befesa’s contractual obligations. Befesa closely monitors the air emissions from its operations. In addition, the contravention of  fi account of anyone found to be responsible for the release of hazardous substances into the environment (entering the soil,  atmosphere). This liability may be assigned by government agencies      01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 49Befesa Annual Report 2024    of hazardous materials and chemicals. A summary of potential environmental impacts related to Befesa’s operations, process monitoring and control measures implemented by the Company are described in the  a. Air emissions Befesa closely monitors the air emissions from its operations and the performance of controls established to meet regulatory thresholds. Industry practices employing Best Available Technology (BAT) for operations and emission controls are implemented to ensure that process emissions remain at acceptable levels.  implemented measures to ensure that  the regulations of the Industrial Emissions Directive (IED). As part of this initiative, Befesa has developed a fi under the ISO 14001 standards and   Befesa’s commitment to continuous improvement in its operations. Risk and opportunities continued 50 Befesa Annual Report 2024 b. Soil, storm water and groundwater protection Befesa’s plants are designed to ensure that materials are kept from being placed on the land surface to the greatest extent possible. Operational areas are established  for material transfer and other areas  collection, control systems and other engineered facilities and practices  process materials from potentially being transported and deposited on the soil surface and entering storm    c. Water conservation By reference, the most sustainable approaches and technologies   ffl used at Befesa’s facilities, including the Steel Dust Recycling Services and Salt Slags Recycling Services facilities. These facilities operate under a zero-discharge policy. Most of Befesa’s plants have been  ffl ffl used in the recycling process. This is ff  potential for the discharge of entrained ff In addition to minimising the use of this valuable resource, Befesa’s ff to provide economic dividends resulting from reduced operating   treatment prior to discharge. In addition, entrained metal values are recovered for valuable use, as opposed to being discharged into the environment.  a key performance indicator (KPI) to highlight enterprise conservation ff information for KPI tracking. Trends are monitored and analysed, and practices aligned to minimise consumption values. d. Residue reduction Befesa is an environmental recycling services provider that plays a critical role in the circular economy. This it does by conserving valuable mineral resources and reducing potential environmental impacts and risks for the steel and aluminium industries. Befesa’s inherent business of recycling hazardous residues from metal- processing businesses prevents the disposal of valuable minerals in fi valuable materials reclaimed. KPIs are maintained for tracking hazardous and non-hazardous residues produced from Befesa’s operations, and the volumes that are disposed of or recycled. Each site contributes information for KPI tracking. Trends are monitored and analysed, and practices aligned to minimise residues generated and disposed of. e. Carbon emissions Befesa’s business is to reclaim valuable metals from hazardous residues produced by the metals industry and to provide valuable feedstocks to bulk metal production businesses. Carbon emissions are generated through the processes used by Befesa in metal recycling operations. This occurs through the use of carbon-reductant sources, including coke, coal and fossil fuels. Regulations are rapidly being promulgated on a regional and global  causes risk in business operations  ffi reduce carbon emissions are currently being evaluated. Certain measures have already been implemented to minimise carbon emissions and to shrink Befesa’s overall carbon ff Indirect services and utilities supplied to Befesa’s operating sites are  source of electricity and its production  resources. Sources of energy supply  ff ff cost of operations and Befesa’s fi As of 31 December 2024, all the Befesa sites except for the US fi fi 65% of the Befesa sites are ISO 50001 fi fifi 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 51Befesa Annual Report 2024 according to ISO 45001. Through these management systems and  monitors its carbon emissions and  basis. In addition, Befesa reports the Kyoto Protocol Scope 1 and Scope 2 emissions and, since 2022, also the Scope 3 emissions. To minimise carbon emissions, Befesa applies BAT and looks for improvement opportunities as part of its operational excellence programme. Through this fi fi  reducing carbon emissions and energy consumption. Certain projects have already been implemented to achieve these objectives, namely the replacement of aluminium melting   Carbon emissions are monitored and compiled using the ISO 14064 management system. This is  validated by an independent third- party organisation. fi reduce its CO emission intensity by  net zero by 2050. Health and safety risks Daily operations at Befesa’s plants by employees may cause injuries  particularly from the potential occurrence of events or circumstances. These could include         fi  and operators becoming trapped because of machinery overturning. To manage these risks, Befesa has a   and corporate safety standards. Controls include the “Be Safe at    investments to implement safety   and communication (H&S monthly   safety standards, plant-level safety     permanent attention from  accident insurance. IT risks In an era dominated by technological advancements, the industry faces a myriad IT risks that demand vigilant attention. At the forefront of these challenges lies the omnipresent  over the seamless continuity of operations. Recent statistics underscore the severity of the issue,  cybercrime soaring to unprecedented  a substantial share of these losses, further emphasising the imperative for robust cybersecurity measures. The World Economic Forum estimates that annual global losses as a result of  industrial sector consistently ranking ff fi need for enterprises like Befesa to fortify its digital defences. Notably,  fi risk to industrial facilities. The sector  cyber incidents annually, leading to unforeseen disruptions. Befesa  addressing this challenge head on to ensure the resilience of its operations against the evolving landscape of cyber threats. To safeguard against these risks, Befesa has implemented a comprehensive cybersecurity  Master Plan. This strategic road map encompasses key activities and projects to fortify Befesa’s digital infrastructure. Regular cybersecurity audits and assessments are   posture. Both internal and external penetration tests, facilitated by impartial third parties, serve as   Risk and opportunities continued 52 Befesa Annual Report 2024 An integral component of Befesa’s cybersecurity strategy is its   instituted an annual cybersecurity training programme that equips all  needed to navigate the evolving cybersecurity landscape. This proactive approach underscores Befesa’s commitment to cultivating a cybersecurity-conscious culture,  a frontline defender against potential threats. Befesa has implemented a comprehensive cybersecurity framework guided by its Cybersecurity Master Plan. In addition to these initiatives, Befesa prioritises staying abreast of emerging cybersecurity trends and technologies. This proactive stance  implement cutting-edge solutions to counteract evolving cyber threats. The ongoing dedication to   positions Befesa as a resilient and secure entity in the face of IT risks. As it navigates the digital frontier, Befesa remains steadfast in its commitment to mitigating IT risks and ensuring the sustainable and secure operations of the Company’s recycling facilities globally. Through ongoing investment in cybersecurity measures   challenges of the digital age, ensuring the continued success and stability of the Company on a global scale. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 53Befesa Annual Report 2024 Outlook and subsequents events Subsequent events On 19 March 2025, the Company repriced its TLB, reducing its interest rate by 50 bps to Euribor +225 bps, fl The facility’s long-term maturity date of July 2029 and all other contractual terms remain unchanged. Outlook  240 and 265 million euros in 2025.  from better zinc price hedging levels,  volume of steel dust recycled in the US  fi In the steel dust recycling segment, Befesa expects stable to strong volumes in Europe, even as the broader ffi   drive higher EAF steel dust volumes.  to maintain steady volume levels compared to 2024. Given these factors, the Company sees a neutral to positive outlook for this business segment. For salt slags and secondary aluminium (2nd Alu), Befesa expects stable salt  secondary aluminium business is expected to continue being impacted by margin compression due to the challenging access to aluminium scrap  automotive sector in Europe. Although salt slags is expected to remain stable, secondary aluminium could face some  outlook in the year. fi fi fi  Treatment charges for the zinc industry     Energy costs remain a mixed factor for the business. Although overall coke prices are expected to decline slightly, European natural gas and electricity costs are projected to remain elevated compared to 2024. This results in an outlook that is neutral to negative. fl  maintenance, auxiliary materials and labour costs contributing to rising overall expenses. Given the persistent fl considers this factor negative for 2025. Average zinc price hedging for 2025   On zinc prices, Befesa expects some degree of volatility driven by global macroeconomic and geopolitical uncertainty. The marginal cost of the zinc producer C90 is around 2,500 level, fl  by the end of 2025. The expansion plan in China is stop due to current market conditions.  fi   execution, technology and commercial  54 Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 55Befesa Annual Report 2024 Board of directors The Board of Directors is the corporate body in charge of the management of Befesa S.A., supervising and controlling the activity of the Company and focusing on its strategic direction. The Board of Directors acts in the corporate interests of the Company and serves the common interests of all shareholders by ensuring the implementation of its strategy. The Board of Directors also ensures the monitoring of the business activities ffi  act in the name of Befesa S.A. and to take any action deemed necessary or useful to accomplish its corporate    on commercial companies of 10 August 1915, as amended  and by the Articles of Association. The Board of Directors has appointed an Audit Committee, a Nomination and Remuneration Committee and a  fi advise the Board of Directors and make recommendations to the Board  fi Corporate governance 19 578 2 346 56 Befesa Annual Report 2024 The members of the Board of Directors are: 1. Javier Molina Montes Executive Director, Executive Chair Mr Molina has been the Executive Chair of Befesa since July 2022. He has managed  ffi Befesa Medio Ambiente. Mr Molina joined Abengoa in 1994 and later became Chief ffi Urbanos (Abensur). From 1989 to 1993,   investment banker at Banco de Progreso.  and management and business (ICADE, E3) fi Madrid, Spain. 2. Asier Zarraonandia Ayo Executive Director, Chief Executive Officer Mr Zarraonandia has been the Chief ffi  Befesa’s Steel Dust Recycling Services business unit (as of 2006). Mr Zarraonandia  ffi Recycling Services business unit from 2001 to 2004 and the Financial Controller of the Abengoa Group from 2004 to 2006.  Audit Manager and Consultant for Arthur  specialising in mergers and acquisitions in the industrial sector. He holds a bachelor’s degree in economics from the University of the Basque Country, Bilbao, Spain. He currently serves as a board member of the Canadian company Global Atomic Corporation. 3. Frauke Heistermann Independent Director In 1999, Mrs Heistermann founded AXIT AG, a digital service platform managing global  2015. Mrs Heistermann served as Chief ffi Parcel & Airport Logistics GmbH in 2017. Prior to her management career, Mrs  Product Manager. She serves as director of AXIT.capital, a company that supports start-ups in the area of digitalisation.  of Technology of the Federal State of  of the Supervisory Board of ERMEWA Group SA and member of the Administrative Board of DKV Mobility Group SE. She holds a diploma in logistics and business  the Cooperative State University, Mannheim, Germany. 4. Georg Graf Waldersee Lead Independent Director, Chair of the Audit Committee fi accountant (Wirtschaftsprüfer). For more   served in senior management positions in the EMEIA – and global – management teams of both organisations. As of his retirement  supervisory boards or as non-executive director in various companies or major fi  Wirtschaftsprüfungsgesellschaft, Germany. Mr Waldersee studied economics at the University of Bonn and holds a degree in business administration from the University of Hamburg, Germany. 5. Helmut Wieser Independent Director, Chair of the Nomination and Remuneration Committee ffi AMAG Austria Metall AG. Previously he served as Group President for Global Rolling at Alcoa Inc. and a member of the Executive Board at AMAG Austria Metall AG, and held several management positions at VoestAlpine Industrieanlagenbau. He is a member of the Supervisory Boards of Höldmayr International AG and Benteler AG. He is also a member of the Advisory Council of TTTech Industrial Automation AG. Mr Wieser graduated as Dipl.-Ing. in mechanical engineering and economics from Graz University of Technology, Austria. 6. Natalia Latorre Arranz Independent Director, Chair of the Sustainability Committee Mrs Latorre is General Manager for Energy    for the Shell business in Spain, including  environmental products. Mrs Latorre   executive roles at the European level. She has fi energy transition and the transformation of companies pursuing opportunities in this fi Member at BG Energy Iberian Holding S.L.U. and as Advisory Board Member at Marsi Bionics S.L. In addition, she is a member of the Strategy Advisory Board of Programa Mujer e Ingeniería. Mrs Latorre holds a degree in industrial engineering from Universidad Politécnica de Madrid, Spain. In 2021, Forbes included Mrs Latorre in the  7. Soledad Luca de Tena Independent Director Mrs Luca de Tena started her professional     as Deputy CEO for the Banco Hispano do Investimento in Lisbon. Mrs Luca de Tena has served as Proprietary Board Member, fi Vocento. She started her governance support back in 1998. At Vocento, one of the largest media groups in Spain, she served on several board committees since 2002, ranging from the executive and the nominations and remunerations to audit and compliance, and has chaired this one. In addition, Mrs De Tena is the Vice Chair of the mutual insurance company Asepeyo and serves on the board of several fi master’s and a degree in economics from Universidad Autónoma de Madrid, Spain. 8. Javier Petit Asumendi Independent Director Mr Petit is CEO of Aracnet Partners, an independent company founded by professionals from the investment banking sector. He began his professional career at  ff treasury, capital markets, corporate  General Manager in 1989. In 1992, he led the merger of Banca Mayorista de Banco de Progreso and Banco Urquijo, and continued for a further four years as General Manager of Banco Urquijo. During these years, he represented the bank on the Boards of Media Planning, Urquijo Correduría de Seguros and Torrenova de Inversiones SICAV. In 1996, he joined Banco Cooperativo Español as General Manager, a position he has held for the last 21 years. He has been Director of Ausur (Concesionaria de Autopistas), Chairman of Espiga Gestión (Private Equity), member of the Steering Committee of Unico Banking Group (European Cooperative Central Banks) and member of the Board of Directors of the Financial Markets Association. Mr. Petit holds a dual degree in business  fi 9. Birke Fuchs Board Secretary Mrs Fuchs is the Board Secretary and Group’s General Counsel. She joined Befesa fi  University of Trier, Germany, and a Master  US. She successfully completed the programmes for management development (PMD) and ESG for board members at ESADE Business School, Spain. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 57Befesa Annual Report 2024 Executive Directors Name Position Nationality Year of birth First appointment Renewal End of term Mr Javier Molina Montes Executive Chair Spanish 1959   AGM to be held in 2026 approving the annual accounts fi year ending on  Mr Asier Zarraonandia Ayo CEO Spanish 1967  (co-optation)  Independent Directors Name Position Nationality Year of birth First appointment Renewal End of term Mrs Frauke Heistermann Independent Director German 1971   AGM to be held in 2026 approving the annual accounts fi year ending on  Mr Georg Graf Waldersee Lead Independent Director Chair of the Audit Committee German 1955   Mr Helmut Wieser Independent Director Chair of the Nomination & Remuneration Committee Austrian 1953  (co-optation)  Mrs Natalia Latorre Arranz Independent Director Chair of the Sustainability Committee Spanish 1975   Mrs Soledad Luca de Tena Independent Director Spanish 1961  (co-optation)  Mr Javier Petit Asumendi Independent Director Spanish 1959  (co-optation)  Provisional appointment until fi fi next AGM, currently scheduled for 19 June 2025 fi management and supervision. The standards of good corporate governance are a high priority at Befesa and forms the basis of all its activities. Corporate governance continued 58 Befesa Annual Report 2024 As a Luxembourg société anonyme –  a regulated market in Germany – Befesa S.A. is not required to adhere to the Ten Principles of Corporate Governance of the Luxembourg Stock  These principles apply to companies listed and admitted to trading on the regulated market of the LuxSE, or to those governed by the German corporate governance regime, applicable to stock corporations  light of the aforementioned legal   based on the recommendations of the German Corporate Governance Code  Board structure, the Articles of Association of Befesa S.A. and  corporate governance system is  Directors and updated to incorporate  practices in corporate governance. Befesa places a strong emphasis  y A skilled and balanced composition   y Acting in the best interests of all of the Company’s shareholders,  y Internal control and reporting, ff  y A compliance management system (CMS) that ensures strict    y The promotion of social responsibility and ethical values in  y Commitment to sustainability and corporate social responsibility. Befesa is committed to adhering to good corporate governance practices that provide for the necessary decision-making processes and controls to balance the interests of all  the long-term success of Befesa. The main corporate bodies are the Board of Directors and the General Meeting of shareholders. Befesa currently has a majority of Independent Directors on the Board of Directors. All the members of the Audit Committee, the Nomination   independent. To enhance transparency regarding executive compensation, Befesa discloses the compensation of each member of the Board of Directors  the compensation received in 2024. Befesa ensures that its shareholders can exercise their rights before or during the General Meeting, as provided for by Luxembourg  of Association, and thus exercising their voting rights. Details of the above-mentioned items can be  Required skills, experience and background All proposals for the members of the Board of Directors of Befesa S.A. are made on the basis of individual merit. All Directors need to have the required fi background, experience, diversity – including gender – and the ability to adequately perform the duties of the Board of Directors. The selection and  generally takes into account the  y   y Value added to the current  y fi  y  ff y Succession planning. Befesa places a strong emphasis on recruiting experienced professionals  strategic and problem-solving skills, and strong interpersonal and negotiation skills. In addition, the representation of a mix of cultural and educational ff of perspectives on Company issues.  be members of the Board of Directors. For Befesa, diversity means combining ff nationalities and backgrounds in the Board of Directors. This approach is explicitly stated in Befesa’s HR and equality policy. ff ff of Directors. Befesa ensures that the members of each Board Committee have the relevant skills based on their fl their curriculum vitae. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 59Befesa Annual Report 2024 Name Position Status Gender Nationality Year of birth Industrial operations Risk management, finance, audit Environmental, health & safety Business strategy Ethics, governance & compliance Mr Javier Molina Montes Executive Chair Executive Male Spanish 1959 Mr Asier Zarraonandia Ayo CEO Executive Male Spanish 1967 Mrs Frauke Heistermann Member of the Audit Committee and member of the Sustainability Committee Independent Female German 1971 Mr Georg Graf Waldersee Lead Independent Director, Chair of the Audit Committee Independent Male German 1955 Mr Helmut Wieser Chair of the Nomination & Remuneration Committee and member of the Sustainability Committee Independent Male Austrian 1953 Mrs Natalia Latorre Arranz Chair of the Sustainability Committee and member of the Audit Committee Independent Female Spanish 1975 Mrs Soledad Luca de Tena Member of the Nomination & Remuneration Committee Independent Female Spanish 1961 MrJavier Petit Asumendi Member of the Nomination & Remuneration Committee Independent Male Spanish 1959 Composition Befesa’s Board of Directors has the size and structure necessary to ffi maximise participation, in accordance  Befesa also emphasises the importance of corporate governance,  implemented by the Board of Directors. According to the Articles of Association, the Board of Befesa S.A. fi ffi six years. Each director is appointed by the General Meeting, is eligible for reappointment and may be removed  a resolution of the General Meeting. In the event of a vacancy on the  Directors may elect by co-optation a fi  ratify such co-optation or elect  The Board of Directors of Befesa S.A. is currently composed of eight  and six non-executive Independent Directors. As a result, Befesa’s Board  of six Independent Directors out of a total of eight Directors, thus resulting in 75% of Board’s Directors being independent, ensuring a strong balance of perspectives and oversight. In terms of gender representation,  Directors. This represents 37.5% of the  The Board of Directors shall appoint from among its members a  that an Executive Director is elected as Chair, the Chair shall have the status of Executive Chair of the Company.  Independent Director of the Company as long as the Chair of the Board of Directors is not an Independent Director. The Independent Directors shall choose from among the Independent Directors the Lead Independent Director. As mentioned above, all Directors have been selected based on the criteria of complementarity, balance, diversity  and nationality. Corporate governance continued 60 Befesa Annual Report 2024 Name Position Status Gender Nationality Year of birth Industrial operations Risk management, finance, audit Environmental, health & safety Business strategy Ethics, governance & compliance Mr Javier Molina Montes Executive Chair Executive Male Spanish 1959 Mr Asier Zarraonandia Ayo CEO Executive Male Spanish 1967 Mrs Frauke Heistermann Member of the Audit Committee and member of the Sustainability Committee Independent Female German 1971 Mr Georg Graf Waldersee Lead Independent Director, Chair of the Audit Committee Independent Male German 1955 Mr Helmut Wieser Chair of the Nomination & Remuneration Committee and member of the Sustainability Committee Independent Male Austrian 1953 Mrs Natalia Latorre Arranz Chair of the Sustainability Committee and member of the Audit Committee Independent Female Spanish 1975 Mrs Soledad Luca de Tena Member of the Nomination & Remuneration Committee Independent Female Spanish 1961 MrJavier Petit Asumendi Member of the Nomination & Remuneration Committee Independent Male Spanish 1959 Meetings The Board of Directors holds meetings   circulation. The quorum for a valid meeting of the Board of Directors is the presence or the representation of at least half of the Directors.  considered for the purposes of the approval of resolutions. The Executive Chair or the Chair of the Board of Directors does not have a casting vote in case of a voting tie. The Board of Directors met on eight  rate of 96.3%. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 61Befesa Annual Report 2024 Committees To strengthen Befesa’s corporate governance, the Board of Directors   responsible for examining and monitoring areas of particular importance: y Audit Committee y Nomination and Remuneration Committee y Sustainability Committee Each committee shall meet as often  During 2024, the Audit Committee  Nomination and Remuneration met on four occasions and the Sustainability Committee met on three occasions. All committees had a 100%   had a 91.75% attendance rate. a. Audit Committee The Audit Committee consists of Mr Georg Graf Waldersee (Chair), Mrs Frauke Heistermann and Mrs Natalia Latorre Arranz. All members are independent. This committee is responsible for  y Evaluating and monitoring all material questions concerning the fi processes and policies of Befesa  y Overseeing Befesa’s internal control  y Overseeing the procedure for the selection of the statutory auditor  y Supervising the RMS and the CMS. b. Nomination and Remuneration Committee Mr Helmut Wieser (Chair), Mrs Soledad Luca de Tena and Mr Javier Petit Asumendi are the members of  independent. Mr Javier Petit Asumendi has been appointed as a member of this committee from his appointment as director of the Board of Directors. The Nomination and Remuneration Committee ensures that the Directors have the necessary  fi their responsibilities. This enables  have an appropriate balance in its  of Befesa and its environment, activities, strategy and risks, contributing to a better performance of its functions. In addition, the committee is responsible for: y  y Making recommendations to the Board of Directors on the terms of appointment and the long- and fi  y Making recommendations on bonus payments to be paid to employees. The Nomination and Remuneration Committee is responsible for the implementation of policies, appointments and dismissals of the daily managers of Befesa S.A., and for proposing to the General Meeting of shareholders suitable candidates for their recommendation to be appointed as members of the Board of Directors. c. Sustainability Committee The Sustainability Committee is made up of exclusively independent members: Mrs Natalia Latorre Arranz (Chair), Mrs Frauke Heistermann and Mr Helmut Wieser. The Sustainability Committee is responsible for overseeing all matters of the Company and its subsidiaries related to environmental  emissions reduction and energy- saving targets and plans, together  made to the Board. The Sustainability Committee is responsible for: y  Company’s environmental sustainability strategy and its  Company’s environmental sustainability policies, standards  y  Company’s environmental sustainability achievements in   y Supporting and providing guidance to the Board of Directors in developing and updating the Company’s policies  environmental sustainability. Corporate governance continued 62 Befesa Annual Report 2024  meetings during 2024. Board of Directors Presence 96.3% Mr Javier Molina Montes  100.0% Mr Asier Zarraonandia Ayo  100.0% Mrs Frauke Heistermann  100.0% Mr Georg Graf Waldersee  100.0% Mr Helmut Wieser  100.0% Mrs Natalia Latorre Arranz  100.0% Mrs Soledad Luca de Tena  100.0% Mr Javier Petit Asumendi  100.0% Mr José Domínguez Abascal  67% Audit Committee Presence 100% Mr Georg Graf Waldersee  Mrs Frauke Heistermann  Mrs Natalia Latorre Arranz  Nomination & Remuneration Committee Presence 100% Mr Helmut Wieser  Mrs Soledad Luca de Tena  Mr Javier Petit Asumendi  Mr José Domínguez Abascal  Sustainability Committee Presence 91.75% Mr José Domínguez Abascal  100.0% Mrs Natalia Latorre Arranz  100.0% Mrs Frauke Heistermann  100.0% Mr Helmut Wieser  67% 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 63Befesa Annual Report 2024 General Meetings All General Meetings of shareholders  Grand Duchy of Luxembourg at the ffi Befesa S.A. or at such other place in the Grand Duchy of Luxembourg fi the meeting. It may be held abroad if, in the judgement of the Board of Directors, circumstances force majeure so require. The convening notice (including the agenda) to the General Meeting, the reports and any other documents required for the meeting are published  included under the investors section Recueil Electronique des Sociétés et Associations and in a Luxembourg   the Articles of Association and    fi   The Board of Directors of Befesa S.A. is responsible for presenting the fi and the annual accounts at the AGM. The approval of the consolidated fi individual accounts of Befesa S.A., the allocation of results, the determination of the dividend, the appointment of the independent auditor and the discharge of the members of the Board of Directors are, among others, some of the resolutions adopted at the AGM. The Board of Directors may convene General Meetings (in addition to the AGM) and it must do so if shareholders representing at least ten per cent (10%) of the share capital of Befesa  the Articles of Association and  The shareholders of Befesa S.A. exercise their voting rights at the AGM (or at any other General Meeting validly convened). Each share entitles the holder to attend all General Meetings, either in person or by proxy, to address the General Meeting and to exercise their voting rights. Each share entitles the holder to one vote. Befesa S.A. ensures equal treatment of all shareholders. There is no minimum shareholding required to be able to attend or to vote at a General Meeting. In addition, the right of any shareholder to participate in any General Meeting and to exercise the voting rights attached to their  shares held by the shareholder at the end of the 14th day prior to the  Shareholders holding – individually or fi of the issued share capital of Befesa S.A. have the right to (i) put items on the agenda of the General Meeting, and to (ii) present drafted resolutions for items included or items to be added to the agenda of the General Meeting. A relevant request must be received by Befesa S.A. by the 22nd day prior to the General Meeting. Ordinary and extraordinary resolutions   and extraordinary resolutions. Extraordinary resolutions relate to proposed amendments to the Articles of Association and certain other limited matters. All other resolutions are, as a general rule, ordinary resolutions. Extraordinary resolutions are generally  matters, among others: y An increase or decrease of the  y A limitation or exclusion of  y The approval of a statutory merger or demerger (scission) or certain  y  y An amendment to the Articles of Association. For any extraordinary resolution to be considered at a General Meeting, the fi (50%) of Befesa’s issued share capital.  of the votes validly cast must approve such a resolution. Abstentions are not  Shareholders 64 Befesa Annual Report 2024 Dividend rights   Association, Befesa S.A. must allocate fi fi Such a contribution ceases to be compulsory as soon as and as long as the legal reserve reaches ten per cent (10%) of Befesa S.A.’s subscribed  compulsory if the legal reserve falls    fi    remainder to a reserve or to a provision  fi fi  premium to the shareholder(s), each  in such distributions.   set forth herein, the Board of Directors may resolve that Befesa pays out an interim dividend to shareholders. The Board of Directors shall set the amount and the date of payment of the interim dividend. Liquidation rights The Company may be dissolved by a resolution of the General Meeting  quorum and the majority rules set for any amendment of the Articles of Association. Should the Company  carried out by the Board of Directors or other person(s) appointed by the General Meeting. The General Meeting shall also  compensation (if any) of those other person(s). After settlement of all the debts and liabilities of the Company, including the expenses of liquidation, the net liquidation proceeds shall be distributed to the shareholder(s) in  as set out for dividend distributions. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 65Befesa Annual Report 2024 Compliance management system The CMS is an integral part of Befesa’s     ethical values. The core of the ethics and compliance programme at Befesa is the code of conduct. Befesa’s code of conduct provides the legal and ethical  ffi fi   other parties. In addition, Befesa has implemented  fi policies, such as a Group security dealing code. This ensures continuous training in compliance matters. More information on Befesa’s CMS can be  the sustainability statement. Risk management system Befesa has established internal procedures that are described in more   an integral part of Befesa’s RMS. This is explained in detail in the  of this Annual Report. Independent auditors   fi statements and the annual individual fi an approved statutory auditor (réviseur d’entreprises agréé) appointed by the shareholders at the AGM. The AGM held on 20 June 2024 approved the appointment of KPMG Audit S.à r.l. as the approved statutory auditor (réviseur d’entreprises agrééfi 31 December 2024. KPMG Audit S.à r.l. has audited the annual fi and the annual individual accounts fi ending 31 December 2019 (i.e. for a period of six years). Others Befesa provides a Group insurance ffi Befesa, including the members of the Board of Directors. The policy is taken  annually. It covers the personal liability fi  behalf of Befesa. Further information about the remuneration of the members of Befesa’s Board of Directors can be found in the remuneration policy  Corporate governance section of    Other corporate governance practices 66 Befesa Annual Report 2024 Luxembourg law on takeover bids    19 May 2006. a. Share capital structure Befesa S.A. has issued one class of shares that is admitted to trading on the Frankfurt Stock Exchange. No other voting securities or securities convertible into shares have been issued. The issued share capital as of 31 December 2024 amounts to €111,047,595.14, represented by 39,999,998 ordinary shares, each fully paid up. b. Transfer restrictions As of the date of this Annual Report, all Befesa S.A.’s shares are freely transferable. c. Major shareholding Based on the various major holding fi   fi the total voting rights attached to  Name of shareholder (direct or indirect) Date on which the threshold was crossed or reached % of voting rights in the share capital of Befesa Alba Europe S.à.r.l., Luxembourg, Grand Duchy of Luxembourg 30 October 2024 10.01% attached to shares Allianz Global Investors GmbH, Frankfurt, Germany 4 January 2023 9.99% attached to shares Global Portfolio Investments, S.L., Madrid, Spain 17 June 2021 5.41% attached to shares d. Special control rights All the issued and outstanding  Befesa S.A. has not issued any securities granting any special  e. Control system in employees’ share scheme This is not applicable. Befesa S.A.’s  issue regarding section e) of article 11  bids of 19 May 2006. f. Voting rights Each issued share of Befesa S.A. entitles the holder to one vote at the General Meeting of the shareholders. The Articles of Association of Befesa S.A. do not contain any restriction on  Articles of Association, a Record Date for admission to a General Meeting of  hours Luxembourg time on the 14th day preceding the date of the relevant General Meeting of the shareholders  Only shareholders holding shares on  participate at the relevant General Meeting. In addition, a shareholder  Meeting shall notify Befesa of their intention to do so by means of a   depository agent by no later than  supporting documents that may be  of the shares. g. Shareholders’ agreements with transfer restrictions or voting rights Befesa’s Board of Directors has no information about any agreements  in restrictions on the transfer of Befesa S.A.’s shares. The shares issued by Befesa S.A. are freely transferable, in  applicable to shares in dematerialised form. The Board of Directors is also  agreements that may result in restrictions on voting rights. h. Appointment of Board members; amendments of the Articles of Association Rules governing the appointment and the replacement of the members of the Board of Directors and changes to the Articles of Association are set out in articles 11 and 32 of the Articles of Association of Befesa S.A. This document is available at   01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 67Befesa Annual Report 2024  y The members of the Board of Directors are appointed by the General Meeting of shareholders for a period not exceeding six years. They may be removed  replaced at any time by a resolution adopted by the General Meeting of shareholders of Befesa S.A. y Resolutions to amend the Articles of Association may be adopted by  validly cast, if the quorum of half of the share capital is met. If the quorum requirement of half of the share capital of Befesa S.A. is not fi shareholders may be reconvened to a second meeting. No quorum is required in respect of a second meeting and the resolutions are  validly cast. i. Powers of the Board of Directors  are regulated in articles 6, 12 and 13 of the Articles of Association of Befesa S.A. The Articles of Association are    y Befesa S.A. is managed by its Board of Directors. y The Board of Directors is vested  perform all acts necessary or useful to accomplish Befesa’s objectives. y The Board of Directors may delegate the daily management of Befesa and the representation of Befesa for this daily management to one or more persons or committees, specifying the limits   be exercised. y The Board of Directors may appoint an audit committee, a nomination and remuneration committee, an  other committees it may deem  fi y The Board of Directors is authorised, up to the maximum amount of the authorised capital, to (i) increase the issued share capital in one or several tranches,  against payment in cash or in kind, by conversion of claims on the Company or in any other  or conversion rights in relation to  the limits of the authorised capital under the terms and conditions of   the place and date of the issue or successive issues, the issue price, the terms and conditions of the subscription of, and paying up on,  and (iv) remove or limit the statutory preferential subscription right of the shareholders. This authorisation fi years after the date of the General Meeting creating the authorised capital. The relevant authorisation  of the shareholders held on 5 October 2021. y The Board of Directors is authorised to acquire, by itself or through a    (i) the maximum number of shares to be acquired may not exceed ten per cent (10%) of the total number of shares composing the issued share capital at the time of this resolution   acquisitions, Befesa S.A.’s holding  any time ten per cent (10%) of the total number of shares composing the issued share capital of Befesa   accounting par value or be higher than ten per cent (10%) above the  price per share in the XETRA trading system (or a comparable successor system) during the calendar month preceding the resolution of the Board of Directors on the buy-   shares acquired by a person acting  of Befesa S.A., may not have the ff  amount of the subscribed capital   or the Articles of Association of Befesa S.A. Only fully paid-up Other corporate governance practices continued 68 Befesa Annual Report 2024   fi the date of the General Meeting creating the share buy-back. The  by the AGM of shareholders held  ff through the stock exchange or on the basis of a public purchase ff  shares acquired pursuant to this authorisation for any legally permissible purpose. fi the Board of Directors ensures the ff direction of Befesa, fostering  excellence and long-term value creation for all stakeholders. j. Significant agreements With the exception of the senior facility agreement signed on 18 July 2024, fi  ff upon a change of control of Befesa  k. Agreements with Directors and employees The Executive Directors do not have  but have signed service agreements  provide for severance pay in various scenarios. In any case, such severance  total annual remuneration of the Executive Directors, consisting of the base salary, the annual bonus and the long-term variable remuneration. For further information, please refer to the Remuneration Policy, available    meeting). The service agreements signed by the Non-Executive Directors  any compensation in the event of  cause or in the event of termination of  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 69Befesa Annual Report 2024 Local communities Befesa continues to support local communities through projects, competitions, and activities that contribute to local development and cohesion between the staff. From sponsoring little activities like local races for young people to large-scale humanitarian initiatives like the Befesa Community Fund in US, the company remains committed to making a difference. ffi once again organized its Charity Project Contestfi employees had the opportunity to vote for their favourite initiatives. In the end,  y Give Kids the World fi    create unforgettable memories. y The Wish Car A project dedicated to granting  ff of joy and excitement during challenging times. y Aspanovas A Spanish organization that  and their families, providing emotional, psychological, and practical assistance throughout their journey. y Mundo Azul Palencia A foundation that supports  families, promoting inclusion,  Each of these initiatives plays a crucial role in supporting families ffi circumstances, reinforcing Befesa's commitment to meaningful social impact. Inclusion and Adaptive Sports Once again, Befesa reinforced its commitment to inclusion in sports by sponsoring, for another year, the fi athlete to compete as a skipper in a sailing regatta. The Fundación IN (Adapted Sports Foundation), founded by him, is dedicated to promoting access to sports for  support for athletes in their training and competitions. Autism Awareness and Family Support Befesa´s commitment to autism advocacy remains strong. The company has continued sponsoring the University of Seville’s Autism Research Chair research, training, and innovation in autism-related studies. Beyond sponsorship, Befesa has also supported Autismo Sevilla and its  provides temporary relief to families  ff ensuring specialized care for their loved ones. Befesa has also supported various organizations, including: y Mamás en Acción fi emotional and physical support  do not have families to accompany them. y La Cuadri del Hospi A foundation that assists children  ff support during treatment. y INTRAS Valladolid An organization dedicated to the social and labor inclusion of people  y Ningún Niño sin Sonrisa A charity that ensures underprivileged children receive gifts and support during Christmas and back to school time. Youth Sports and Community Engagement The production plants have also fi youth football, basketball, and wrestling teams in Sweden, Germany, Spain, and the US. Befesa has sponsored cycling races, charity golf tournaments, and supported local events such as festivals, Christmas markets, and children’s activities in Germany and the US. Employees have actively participated in volunteer work, including supporting and cleaning senior centers in Korea. Befesa has also contributed to educational programs in the US, Spain, Germany, and Sweden. Befesa Community Fund, the philanthropic initiative managed by Befesa Zinc in Palmerton, Pennsylvania. The Befesa Community Fund continues to play a vital role in supporting local initiatives in Palmerton and surrounding areas.  various organizations, supporting projects such as park improvements, safety enhancements, educational programs, and facility upgrades. 70 Befesa Annual Report 2024 Befesa has also collaborated as a sponsor of DalecandELA’s 650 km tandem bike journey through Death  for ALS research. This challenge symbolizes the struggle of researchers ff ALS. The initiative honors scientists fi future generations. Environmental Initiatives Environmental responsibility remains a key focus for Befesa. y The company organized the Corporate HSE Environmental Award the Eibar Forest Restoration Project. This initiative focused on reforesting a damaged natural area, restoring local biodiversity, and promoting sustainable land  to submit projects, and the entire  vote for their preferred initiative. y On a smaller scale, local plants have supported environmental programs, such as a duck protection initiative in the US and various eco-friendly activities in Korea. Disaster Relief and Charitable Giving Befesa has extended the support ffHurricane Helene in the US, providing essential resources to those impacted. In addition, the plants have made donations during special occasions such as Christmas and Thanksgiving, helping families in need during these important times of the year. fi Winter Greetings Contest  charity to receive a symbolic donation on their behalf. The selected  y Amity Foundation (China) fi healthcare, and poverty alleviation programs across China. y Unoentrecienmil (Spain) A foundation supporting research and assistance programs for  fi Step Challenge in the month of February. This initiative encourages the employees to stay active because    the opportunity to donate €3,000 to a charity of their choice.  Franquesas, and they chose to support fi pediatric cancer research program. This donation contributes to advancing treatments and improving the quality of life for children battling cancer.    organized a Sleep Hygiene Workshop. fi ff shared their personal experiences and the unique challenges they face in maintaining good sleep habits. A Small Contribution, A Big Impact ff continues striving to make a positive impact, contributing to support inclusion, education, environmental sustainability, and humanitarian aid. Overview of CSR Contributions in 2024 This table presents a summary of the total expenditure on Corporate Social Responsibility (CSR) initiatives carried out by the company in 2024. It details the amounts spent across three key categories: Humanitarian and Social Projects, Education and Culture, and fi commitment to these areas. 2024 Humanitarian and social projects 130.197 € Education and culture 40.360 € Sponsorship 93.558 € Total donations and sponsorships 264.115 € 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 71Befesa Annual Report 2024 04 Sustainability statement 76 General disclosures 112 Environmental 112 EU Taxonomy 154 Social 178 Governance 192 Independent auditor’s report Befesa Annual Report 202472 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 73Befesa Annual Report 2024 Sustainability statement  has prepared in this 2024 Annual Report a sustainability statement in  of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). This report has been voluntarily audited to strengthen Befesa’s commitment to transparency and fi has performed limited assurance of this sustainability statement (the independent auditor’s report section of the sustainability statement). This report provides a comprehensive disclosure of Befesa’s ESG performance, ensuring compliance   dedication to sustainable business fl impacts, risks and opportunities, integrating key sustainability factors into its strategy and operations.  relevance, comparability and reliability, Befesa ensures that its stakeholders have access to clear, standardised and fi This report marks an important step in enhancing transparency and accountability, supporting the Company’s role as a global leader in circular economy solutions. The sustainability statement information provided is based on the double materiality assessment on sustainability topics completed by Befesa in 2024, and all material data points requested by the regulation has  sustainability material topics. Befesa is committed to transparency, sustainability and responsible corporate governance. 74 Befesa Annual Report 2024 75Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information General disclosures BP-1 General basis for preparation of the sustainability statement This sustainability statement has been prepared on a consolidated basis,  fi the consolidated quantitative ESG data comprises the parent company Befesa S.A. and subsidiaries controlled   opportunities extend to its upstream   principle (more info in section IRO-1). Befesa has not used the option to omit any piece of information corresponding to intellectual property,  BP-2 Disclosures in relation to specific circumstances  fi for its sustainability statement in all sections of this report. In case that there are metrics that include   explained in the corresponding document section. In case that there    corresponding document section.   this information is uncertain. The main change in the preparation and presentation in 2024 is the adaptation to the CSRD regulation and ESRS standards. If there is a    Befesa informs the sections of the ff  Taxonomy Regulations and  Reporting Directive. No incorporation by reference have been made. GOV-1/GOV-2 Role of management and sustainability matters addressed The Board of Directors of Befesa S.A.  Executive Directors (Executive Chair and CEO) and six Non-Executive Directors. There are no employee representatives on the Board of Befesa S.A. In terms of gender representation, the Board of Directors includes three female board members out of a total of eight members, representing 37.5%. Befesa’s Board of Directors consists of six independent non-executive board members out of a total of eight members, representing 75%. The Board of Directors of Befesa S.A.  perform all acts necessary or useful to accomplish the Company’s corporate objectives and pursue the objective of increasing the sustainable value of  As such, the Rules of Procedure of the Board of Directors establish that the Board of Directors is responsible  strategic direction and control of Befesa’s operations and businesses, including oversight of impacts,  sustainability matters. General disclosures BP-1 General basis for preparation of the sustainability statement BP-2 fi circumstances GOV-1, GOV-2 Role of management and sustainability matters addressed GOV-3 Integration of sustainability- related performance in incentive schemes GOV-4 Statement on due diligence GOV-5 Risk management and internal controls SBM-1 Strategy, business model and value chain SBM-2  of stakeholders IRO-1 Double Materiality Analysis SBM-3 Sustainability material impacts, risks and opportunities IRO-2 Disclosure requirements in ESRS covered by the Befesa’s sustainability statement MDR-P  76 Befesa Annual Report 2024 Diverse industry experience and strategic oversight: y Members such as Georg Graf Waldersee (accounting and auditing, risk management and compliance), Javier Petit Asumendi (investment banking) and Soledad Luca de Tena (corporate governance in media) fi and governance expertise, ensuring robust decision-making  y Frauke Heistermann (supply chain and digitalisation) and Helmut Wieser (industrial and manufacturing sectors, in particular  health and safety, and accident prevention) bring technical and operational perspectives that are crucial for sustainability-related transformations. y Natalia Latorre Arranz (energy transition) has direct ESG expertise,  environmental products and corporate sustainability strategies. Relevance to material impacts, risks and opportunities: y Several members have expertise in sectors highly impacted by ESG matters, such as energy, industry fi y Natalia Latorre Arranz’s experience in energy transition and corporate transformation is particularly relevant for addressing climate- related risks and opportunities. y Frauke Heistermann’s background in digital transformation and supply chain management contributes to sustainable logistics and ffi y Georg Graf Waldersee’s auditing fi ensures transparency and accountability in sustainability reporting. Access to additional expertise and development initiatives: y Many members serve on advisory boards, supervisory boards and    y Board members such as Natalia  in advisory roles related to sustainability (e.g. Marsi Bionics, Strategy Advisory Board of Programa Mujer e Ingeniería), fi experience and expertise. y Membership in various supervisory bodies suggests exposure to ongoing training, industry developments and regulatory updates. Member Position Tipology Committee Javier Molina Executive Chair Executive Asier Zarraonandia CEO Executive Javier Petit Asumendi Independent Director Non-executive Member of the Nomination & Remuneration Committee Georg Graf Waldersee Lead Independent Director Non-executive Audit Committee Chair Frauke Heistermann Independent Director Non-executive Member of the Audit Committee and of the Sustainability Committee Natalia Latorre Arranz Independent Director Non-executive Sustainability Committee Chair and member of the Audit Committee Chair Soledad Luca de Tena Independent Director Non-executive Member of the Nomination & Remuneration Committee Helmut Wieser Independent Director Non-executive Nomination & Remuneration Committee Chair and member of the Sustainability Committee The board contracts of Befesa S.A. establish that the Board member agree  regulations regulating the internal functioning of the Company and the Board Committees, the dealing code and all other applicable policies of the Company. The Board of Directors brings fi fi digitalization, energy transition, logistics, and industrial engineering. This diverse expertise is particularly relevant for overseeing sustainability matters due to the factors as  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 77Befesa Annual Report 2024 The explained composition and diversity of the Board of Directors (as fl  ff oversight. The diverse backgrounds of the board members, particularly in fi digitalization, and industrial operations, provide a foundation for addressing material sustainability impacts, risks, fi in its Double Materiality assessment (see SBM-3 and IRO-1) in this chapter. Additionally, the access of the Board  commitment to ongoing learning ff oversee ESG-related matters. The Company has established collaborations to access external sustainability experts, including environmental consultants and other  fi stay updated on best practices for  According to the Rules of Procedure of the Board of Directors, the Executive Chair is responsible for deciding upon the Company’s sustainability strategy, including CO reduction plans, ESG plans and the 5-year Sustainable  As outlined in the 2023 ESG Report, the company, led by the Executive Chair and CEO, is committed to voluntarily reporting on compliance  conducting a Double Materiality assessment (DMA) and preparing for limited assurance of the ESG content and data by Befesa’s external auditor. General disclosures continued In this context, the Executive Chair ffi (CFO) to carry out the Double Materiality fi the KPI reporting requirements, determining the level of granularity required, and assessing the internal process for collecting data on the KPIs.   consultant and led by the CFO of the  Sustainability Committee. The material impacts, risks, and opportunities resulting from this  Sustainability Committee, the Audit Committee, and the Sustainability  these committees, the Board of  the presentations to the committees, information is also provided on the ff metrics, and targets adopted to fi in the double materiality assessment. The Board of Directors has been thoroughly informed about the double materiality assessment (DMA) conducted by Befesa in 2024. The list of the material impacts, risks and opportunities addressed by the Board of Directors of Befesa S.A., or their relevant committees during the reporting period is included in the fi Business Conduct areas of this sustainability report. The Board of Directors of Befesa S.A. has set up an Audit Committee, a Nomination and Remuneration Committee and to ensure that sustainability is an integral part of the decision-making process, a Sustainability Committee and an Internal Sustainability Committee. The chairs of the Audit Committee, Nomination and Remuneration Committee and the Sustainability Committee report on the meetings of their committees to the Board of Directors. Audit Committee The Audit Committee, as outlined in its rules of procedure, monitors the ff quality control, the Risk Management System (RMS) and the Compliance Management System (CMS). In addition to its other duties, it is responsible for supervising the RMS and CMS,   For more information see ESRS GOV-1 of Business Conduct. Befesa has implemented a Risk Management System (RMS) and a Compliance Management System (CMS) to enable managers to analyze, evaluate, and manage risks associated  operations. The purpose of the RMS fi ff  reports to the Audit Committee has been established, comprising the Executive Chair, CEO, CFO, Vice President of Befesa’s Aluminium Salt Slags Recycling Services Business Unit, regional CEOs of the Steel Dust Recycling Services Business Unit and various corporate managers (inter alia, ffi Director. This internal committee is responsible for monitoring and  Risk Map of Befesa, in this sense, 78 Befesa Annual Report 2024 The responsibilities of the Sustainability Committee of the Board of Directors include overseeing and monitoring all material questions regarding sustainability, including the implementation of the CO2 reduction plan for 2030 and 2050. The Committee performs the following activities: 1. Review and monitor the Company’s environmental sustainability strategy and its realisation as well as the Company’s environmental sustainability policies, standards and guidelines. 2. Review and monitor the Company’s environmental sustainability achievements in accordance with the targets and guidelines of the Company. 3. Support and provide guidance to the Board of Directors in developing and updating the Company’s policies and procedures relating to environmental sustainability. please refer to GOV-5. Annually, the risk analysis, risk map, and mitigation actions are submitted to the Audit Committee and Board of Directors   committee are responsible for the fi material sustainability impacts, risks and opportunities, together  During 2024, the Audit Committee held four meetings. The Nomination and Remuneration Committee The Nomination and Remuneration Committee is responsible for ensuring that the Board of Directors has the necessary competencies and skills ff issues and challenges. When recommending suitable candidates to the Board of Directors for election by the General Meeting, the Nomination and Remuneration Committee ensures they have the necessary sustainability expertise, such as experience in environmental  corporate governance, and social impact and other sustainability related fi a diverse set of skills among board members to oversee the Company’s sustainability strategy and ff The Nomination and Remuneration Committee engages external consultants and advisors to support the recruitment process. The Nomination and Remuneration Committee monitors the development of sustainability-related expertise on the Board on an ongoing basis for fi courses. The Committee evaluates ff sustainability oversight and recommends any necessary changes to ensure that sustainability remains at the forefront of the Company’s strategic decision-making. This assessment includes evaluating  regulations, climate change, resource ffi  context of Befesa's industry. The Sustainability Committee The Sustainability Committee   for guiding the Company's strategy and monitoring its performance.   environmental and health and safety, social responsibility, corporate governance, and sustainable  This Board Committee has no   advisory, and to make proposals and recommendations in the area of sustainability. The Chair of the Sustainability Committee reports to the Board of Directors of the Company. The Sustainability Committee meets at  Internal Sustainability Committee Befesa has set up an Internal  responsible for overseeing and managing all matters of the Company and its subsidiaries related to ESG  reduction and energy-saving targets. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 79Befesa Annual Report 2024 This internal Sustainability Committee  Executive Chair, CFO & Head of IR, Strategy & Communications, Global EHS Director, HR & CSR Director, ffi The Sustainability Committee established by the Board of Directors of Befesa S.A. is regularly informed  discussion made by the internal sustainability committee of Befesa and provides strategic direction on sustainability matters to the internal sustainability committee. During the reporting period, and in line  chapter E1) and the results of the Double Materiality assessment, the internal sustainability committee  and issues: CO 2023 compared to previous years, CO reduction plan, Key projects for reducing C2 emissions, ESG ratings and reporting, Implementation of CSRD Directive, including execution of double materiality assessment (DMA). With expertise in environmental, health and safety management and energy transition, this committee focuses on reducing the environmental impact of Befesa’s activities, particularly greenhouse gas emissions. Taking into consideration the Double Materiality assessment and the company's Climate Action Plan and by overseeing carbon reduction strategies and investment in clean technologies, the Committee helps the Company in successfully navigating regulatory challenges and positions it to capitalize on emerging opportunities, such as production of green steel and the use  General disclosures continued GOV-3 Integration of sustainability-related performance in incentive schemes The remuneration system of the Non-Executive Directors of the fi  or variable compensation from Befesa S.A. The compensation of the non- executive members of the Board of Directors is approved on a yearly basis by the General Meeting of Befesa S.A. Contrary to the remuneration system of the Non-Executive Directors, the remuneration system of the  of Directors of Befesa S.A. includes fi and variable, performance-related remuneration instruments (see table on the right).  Remuneration Policy 2023, the ESG performance criteria used in the variable instruments of the remuneration of the Executive Directors of Befesa S.A. are based on market best practices, the recommendations from a leading fi  three key areas: 1. Environmental/Climate change Implementation of the CO reduction plan to achieve the target of of 20% CO intensity rate for scope 1&2  ambition to reach net zero by 2050. fi  decrease in the CO intensity and level of execution of projects included in the CO reduction plan during the performance period. 2. Social/Health and safety Employees’ health and safety, measured by development of the Lost Time Injury Rate (LTIR) during the performance period .The target is to maintain an adequate level  The only numerical target is to keep fatalities at zero. 80 Befesa Annual Report 2024 Instruments of Executive Directors’ remuneration for reporting period (FY 2024) Fixed instruments Annual base salary Fixed remuneration paid in 12 monthly instalments fi fi Variable instruments One-year variable remuneration Performance period: 1 year fi – 40% EBITDA – 20% Net debt – 20% ESG –  Performance scale: 0–200% of target value (cap) Long-term variable remuneration Performance period: 3 years Criteria for Tranche V of LTI (3-year performance period 2022–2024) – 70% performance- based (Performance Stocks) and 30% retention-based (Restricted Stocks).  – 50% Relative TSR – 30% EBITDA CAGR – fl Performance scale: 0–200% of target value (cap) The Restricted Stocks contain a service condition so that they are subject to continuous employment over the 3-year performance period. Information on Befesa’s Long-Term Incentive Plan (Tranches VI-VIII) regarding future reporting periods can be found in its Remuneration Policy 2023, published on the  3. Governance/Compliance Continuing progress on compliance and governance practices, e.g. annual risk assessment update, no covenant breaches or corporate governance misconduct, maintaining and improving internal audit practices across the Company. In addition, other factors considered as part of Befesa’s ESG performance criteria include maintaining, improving and extending ESG ratings by external agencies. The Board of Directors of Befesa  recommendations of the Nomination and Remuneration Committee, is responsible for developing and updating the remuneration system  executive members. Moreover, the Board of Directors prepares a detailed and comprehensive remuneration report fi remuneration report provides detailed information on the remuneration received by each Executive and Non-Executive Director of Befesa S.A., and is submitted to the General Meeting for an advisory vote. For the further development of the remuneration system and to assess its appropriateness, the Nomination and Remuneration Committee of Befesa S.A. may consult an external  fi change to the remuneration system,  accordingly and submitted at the next AGM for an advisory vote. fifi  resubmitted to the AGM for an advisory vote at least every four years. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 81Befesa Annual Report 2024 GOV-4 Statement on due diligence Core elements of due diligence Section in the sustainability statements Page a) Embedding due diligence in governance, strategy and business model ESRS 2 GOV-2 ESRS 2 GOV-3 ESRS 2 SBM-1 ESRS 2 SBM-3 76 80 83 92 ff ESRS 2 GOV-5 ESRS 2 SBM-1 ESRS 2 SBM-2 ESRS 2 SBM-3 ESRS 2 IRO-1 82 83 85 92 86 c) Identifying and assessing adverse impacts ESRS 2 IRO-1 ESRS 2 SBM-3 ESRS 2 GOV-5 86 92 82 d) T aking actions to address those adverse impacts ESRS 2 GOV-5 S1-4 E1-3 E2-2 E5-2 82 161 131 142 149 ffff ESRS 2 MDR-P G1-1 G1-3 108 180 189 GOV-5 Risk management and internal controls Befesa, through the collaboration of its various corporate departments, is  management plan for sustainability, taking into account the information to  requirements. This implementation plan is structured  y Risk and materiality analysis to  y fi  y Development of an audit plan,  y fifi  y Monitoring and implementation of recommendations from internal audits. As part of this commitment, Befesa  on analyzing the sustainability risks  sustainability-related controls have fi control matrix. These controls apply ff processes, including controls focused on management and others focused  ff fi  y Human rights y  y Supply chain y Compliance policies y Applicable regulations and legal requirements y Befesa’s corporate safety standards The number of internal sustainability  years taking into account the increase in sustainability regulations.To achieve  analysis of its management team and the expertise of external consultants. General disclosures continued 82 Befesa Annual Report 2024 In addition to the controls mentioned above, the internal audit of Befesa, in  Environmental, Health and Safety Department, includes ethical audits in  by Befesa’s Audit Committee. This plan seeks to ensure that all group companies undergo ethical audits of its processes at least once every three years. In 2024, a total of 8 ethical   The scope of these audits is based on risk and materiality assessments, conducted both at a global level and for each audited subsidiary. It is expected that the number and scope   and external audit demands. SBM-1 Strategy, business model and value chain Befesa’s business model is based ff  solutions to its customers in the steel and aluminium industries. In the Steel Dust Recycling Services segment, Befesa collects and recycles steel dust  generated in the production of crude, stainless and galvanised steel in EAF. The majority of the revenue generated in the Steel Dust Recycling Services segment comes from selling WOX to zinc smelters. Furthermore, a portion of the revenue generated comes from the service fees charged for the collection and especially the treatment of crude steel dust. In the US, Befesa additionally operates fi creates a vertically zinc operation for Befesa in this market, helping to address the shortage of zinc smelting capacity in the North American market. fi  green zinc – special high-grade (SHG)  (WOX). In addition, a small portion of revenue is generated from tolling fees. These fees consist of a service fee charged for collecting and treating stainless steel residues and a fee for returning the metals – mainly nickel, chromium and molybdenum recovered in the recycling process – to stainless-steel dust customers. In the Salt Slags operations of the Aluminium Salt Slags Recycling Services segment, Befesa recycles  collected from secondary aluminium customers for a service fee. Further salt slags are generated during the production of secondary aluminium at Befesa’s plants. Furthermore, Befesa recycles SPL, a hazardous residue generated by primary aluminium producers. During the recycling process, melting salt, aluminium concentrates and aluminium oxides are recovered. Revenues from the Salt Slags operations are mainly derived from the sale of aluminium concentrates and melting salt obtained from recycling salt slags and SPL, in addition to fees charged for recycling these materials. A large amount of the recovered aluminium concentrates is sold and used in Befesa to produce aluminium alloys. In the Secondary Aluminium operations of the Aluminium Salt Slags Recycling Services segment, Befesa collects and recycles aluminium scrap and other aluminium residues such as aluminium drosses, shavings and cuttings, and aluminium concentrates from, among others, aluminium foundries, scrap dealers and collectors, and primary aluminium producers. Befesa also generates aluminium concentrates itself during the salt slags recycling operations, producing secondary aluminium alloys from these  sold to customers in the automotive and construction industries. Revenues from the Secondary Aluminium operations are mainly derived from the sale of secondary aluminium  the management report sections  The headcount of employees by geographical areas is included in section S1-6 of this sustainability statement. fi ffi  Befesa’s core business is based on sustainability, and it has played a key role in the circular economy since 1987. Befesa’s business model is designed to capture opportunities provided by decarbonisation and environmental protection regulations. These   more and more countries adopt more stringent environmental legislation. Befesa’s sustainability goals are closely integrated into its business strategy, focusing on enhancing the circular economy, reducing environmental impact and strengthening stakeholder engagement. To see more information please refer to chapters of the  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 83Befesa Annual Report 2024 Sustainability goals are structured across significant product and service groups, customer categories, geographical areas and stakeholder relationships. Products and services:  contribute directly to sustainability objectives: y Steel Dust Recycling Services: Recovering valuable materials   y Aluminium Salt Slags Recycling Services: Processing aluminium salt slags and SPL to recover secondary aluminium fi Customer categories: Befesa primarily serves EAF steel producers and secondary aluminium manufacturers, helping them to meet stringent environmental regulations. Befesa aims to improve resource ffi its customers’ production processes. Geographical areas:       Stakeholder relationships:  employees, investors, regulators, suppliers and local communities, to foster transparency and ethical business practices: y Governance initiatives: Strengthening compliance programmes to prevent corruption and bribery and y Social commitments: Promoting health and safety, diversity and fair labour practices across all operations. By advancing these sustainability goals across its products, customers, markets and stakeholder ffi commitment to ESG excellence and long-term environmental and social impact. Befesa’s strategy is deeply rooted in sustainability, aligning its business  principles, environmental protection and social responsibility. The Company focuses on managing hazardous  minimising environmental impact and ffi Befesa faces several sustainability- related challenges, including the  y Energy and emissions reduction: Reducing the carbon footprint  require high-temperature industrial  y Regulatory complexity: Adapting to evolving sustainability regulations, including the CSRD  ffi y Market expansion: Integrating sustainability into  environmental regulations create both opportunities and operational challenges. To address these challenges, Befesa has implemented several strategic initiatives, such as a CO reduction   General disclosures continued 84 Befesa Annual Report 2024 ffi governance and compliance practices and policies. By integrating these strategic elements, Befesa ensures that sustainability remains at the core of its operations, positioning itself as a  recycling and ESG excellence. Befesa operates in regulated environmental recycling services, specialising in the recycling of hazardous residues from the steel and aluminium industries. Through  Steel Dust Recycling Services and Aluminium Salt Slags Recycling Services – Befesa contributes directly to the circular economy, recovering valuable materials and reducing environmental impact. y Secure supply agreements: Befesa maintains long-term  industrial producers to ensure a fl y Advanced recycling technologies: The Company continuously invests in R&D and process optimisation to improve material recovery rates and ffi y Sustainability in operations:  sources and process improvements to reduce its carbon footprint and ffi Befesa’s recycling processes result in  reducing the need for virgin resource extraction and contributing to the  Key outputs: y WOX: A zinc-rich material sold to zinc fi y Salt slags and secondary aluminium: Reintroduced into the market to replace primary resources Expected benefits: y For customers:  environmental regulations, cost  and access to sustainable secondary materials y For investors:   sustainability regulations y For society and the environment:  fi  Befesa is positioned as a critical  recycling value chain, bridging the  producers and the circular economy. Upstream (suppliers and inputs): y Key suppliers: EAF steel mills, aluminium smelters and industrial manufacturers providing steel dust, salt slags  suppliers and intermediaries in the  y Collection process: Befesa operates 24 recycling plants in eight countries (Germany,  South Korea, China and the US) strategically located near major industrial hubs. Downstream (customers and distribution): y Key customers: – Zinc smelters: Purchase WOX oxide for zinc extraction. – Secondary aluminium producers: Use recovered aluminium for  y Distribution channels: fi end users through a combination of direct sales contracts and strategic logistics partnerships. By leveraging its global footprint, advanced recycling technologies and its stakeholder relationships, Befesa continues to enhance sustainability and drive value creation across its entire supply chain. For more information, please see environmental chapter. SBM-2 Interests and views of stakeholders For Befesa, stakeholders are those individuals and organisations that ffff business operations. Stakeholders are not just passive observers but active  fi success and sustainability of Befesa. Recognising their importance and ff  sustainability goals. The key stakeholders include customers, employees, local communities, suppliers, shareholders, rating agencies, analysts, government, NGOs and the media. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 85Befesa Annual Report 2024 Befesa seeks engagement opportunities to gather feedback from stakeholders and to build relationships  analysts and potential investors are the main stakeholders to Befesa. Input from these engagements are considered in Befesa’s operations and decision-making. Befesa pays close  to identify emerging opportunities and risks through stakeholder dialogue. Since Befesa’s IPO in November 2017, it has established intensive and direct  and potential investors. Potential investors Employees Local communities SuppliersCustomers Government NGOs Shareholders Media Ratings Agencies Analysts Stakeholder groups General disclosures continued Dialogue channels include emails, phone calls, and virtual and face-to- face meetings. These discussions  and expectations of investors and capital markets. In 2024, dialogue on corporate governance, and in particular the   able to use the content and updates from these meetings for its Double Materiality Assessment and later reporting. The Board of Directors and other committees, including the Audit Committee and the Sustainability Committee, are regularly informed  from stakeholders. This task is led by  the Investor Relations Department of gathering information from stakeholders to the Board and its committees. The results of the Double Materiality Assessment can be found in the IRO-1 and IRO-2 chapters. The impact of Befesa on key  the materiality process. These include Befesa employees, shareholders, suppliers and customers, ratings agencies and analysts, and other groups such as government, local communities and NGOs. IRO-1 Double Materiality Analysis In 2024, Befesa completed a DMA on sustainability topics. The project  guidance from the European Financial Reporting Advisory Group (EFRAG) and  of the European Sustainability Reporting Standard (ESRS). Double materiality considers the importance of sustainability topics  positive and negative impacts caused by Befesa’s operations on people and impact materiality and assesses the “inside-  perspective is financial materiality,  fi   86 Befesa Annual Report 2024 Measuring impact materiality Severity Scale, scope and remediability Probability Impact assessment 1. Scale: Evaluates the social and environmental impact. The average score among environmental, social and business units is selected to calculate severity. 1. Probability of occurrence: Evaluates probability on fifi is a real impact and zero is  considering preventive controls. Within this probability variable, the time   ff frames. A probability rating of 5 corresponds to a  of 4 or 3 indicate a medium-   a long-term horizon. A numerical result for impact materiality is calculated using 70%  30% for probability. When there are several areas that evaluate the fi  2. Scope: fl scope of the impact are evaluated – geographical, key stakeholders and business units. An average of the three scopes is taken. 3. Remediation: Remediation is only assessed for negative impacts and considers corrective measures that Befesa can implement if the impact materialises. fi Measuring financial materiality Severity Magnitude Probability Financial assessment 1. Scale: Evaluates the operational, fi and legal impact. The average score among environmental, social and business units is selected to calculate magnitude. 2. Scope: fl  of scope are evaluated – geographical and key  average of these scores taken. 1. Probability of occurrence: Evaluates probability on fifi is a real impact and zero is  considering preventive controls. Within this probability variable, the time   ff frames. A probability rating of 5 corresponds to a  of 4 or 3 indicate a medium-   a long-term horizon. A numerical result for fi calculated using a 70%    for probability. When there are several areas that evaluate the fi  To determine impact materiality, the potential severity and probability of  Severity combines the average score of an impact’s potential scale, scope and remediability, measured on a fi impact occurring is also measured on a fi Financial materiality is measured by the potential magnitude and probability of a risk or opportunity arising. Magnitude combines the average of a risk or opportunity’s scale and fi Probability is measured in the same  fi assessments and management of the impacts and risks is fully integrated into the Befesa risk management process. The requirements for the internal control procedures and mitigation factors are the same as fifi risks assessed in the annual risk assessment. fi assessments and management is also integrated at the same level as the impacts and risks in the management process. There have been multiple parameters taken into consideration for identifying the impacts, risks and   internal sources and procedures or stakeholders’ engagement. The list of material impacts, risks and opportunities can be found  Sustainability material impacts, risks and opportunities. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 87Befesa Annual Report 2024 Employees Shareholder Suppliers & customers Ratings agencies & analysts Others Local communities, Government, NGOs, Media A total of 21 sustainability topics were assessed through the materiality assessment process previously explained. These were divided into ESG topics as shown in the following table: 1. Climate change adaptation 2. Climate change mitigation 3. Energy 4. Air pollution 5. Water pollution 6. Water management and consumption 7. Biodiversity and ecosystems 8. Resources inflows, including resource use 9. Resource outflows 10. Waste management 11. Working conditions 12. Employee engagement 13. Health and safety 14. Equal treatment and opportunities for all 15. Human and labour rights 16. Working conditions and human rights in the value chain 17. Community engagement 18. Consumers and end users 19. Corporate culture and complaints mechanisms 20. Supplier relationships including payment practices 21. Corruption and bribery Environmental Social Governance Stakeholder groups considered in the materiality process General disclosures continued The impact of Befesa on some of the  the materiality process. These include Befesa employees, shareholders, suppliers and customers, ratings agencies and analysts, and other groups such as government, local  88 Befesa Annual Report 2024  To do so, for the assessment of positive and negative impacts, the parameters to be used in the methodology are detailed  Rating Scale Impacts measurement SCORE LEVEL (FROM 1-5) SEVERITY PROBABILITY Scale Scope Probability Environment Social Remediability Businesses Geographical Scope Key Stakeholders 5  and critically impacts the environment and global emissions reduction and temperature control goals.  and critically impacts people and human rights in a lasting manner. ONLY FOR NEGATIVE IMPACTS No use of score levels,  All of the business lines ff Global Scope All Stakeholders fi ff Recurrent. It has happened several times a year. 4  fi impacts the  ff of emissions reduction and control of global temperature.  fi  ff potentially enhancing human rights. 2 business lines ff Regional scope (Americas, Asia, Europe) 5 Stakeholders fi ff Highly likely. It has happened sometime in the last 2 years or once in the last year. 3  impacts the environment in a  ff  impacts people  medium-term ff National Scope 4 Stakeholders fi ff Likely. It has happened sometime in the last 3 years. 2  negative impact on the  short-term temporary ff  negative impact on  short-term temporary ff 1 business line ff Local Scope 3 Stakeholders fi ff A little likely. An event occured occasionally in the history of BEFESA or similar companies (Sectoral risk). 1 It has a minimally  impact on the environment. It has a minimal and fi negative impact on people. 1 or 2 Stakeholders fi ff Unlikely. It has happened at most once in the history of BEFESA. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 89Befesa Annual Report 2024 Rating Scale Risks & Opportunities measurement SCORE LEVEL (FROM 1-5) SEVERITY PROBABILITY Scale Probability Operational Financial impact Reputational Legal 5 Long-term recoverable damage, in case of risks, fi in case of opportunities, (more than 6 months). ff Very high impact on the organization in a global  Cost of Risk Materialization (k€): >21.000 €k % of impact on sales of the Group (Consolidated): 3,00% or more  loss, in case of risks, or in gain, on case of objectives of customers or serious problems  fi coverage in international media  Treat of loss, in case of risks, or prospect of gaining, in case of opportunities, of the  very serious legal implications (e.g. penal proceedings). Breach of  massive scale. Recurrent. It has happened several times a year. 4 Long-term recoverable damage, in case of risks, fi in case of opportunities, fi impact on the organization in a global  Cost of Risk Materialization (k€): 7.000-21.000 €k % of impact on sales  (Consolidated): 3,00%  possible loss, in case of risks, or possible gains, in case of opportunities, of customers or stakeholders. The investors request for explanations. It arouses the interest for information by authorities and  Sanction imposed, in case  in case of opportunities, by the regulatory bodies   fi a client. Highly likely. It has happened sometime in the last 2 years or once in the last year. 3 Medium recoverable damage, in case of risks, fi in case of opportunities, (1-3 months). Penalized or improvement of ff more services of the organization. Cost of Risk Materialization (k€): 700-7.000 €k % of impact on sales of the Group (Consolidated): 1,00%  the formal request for explanations from customers or stakeholders. It arises the interest by authorities and  information is requested. Coverage in national media and   risks, or verbal praise, in case of opportunities, by  or minor legal  fi a client. Likely. It has happened sometime in the last 3 years. 2 Short-term recoverable damage, in case of risks, fi in case of opportunities, (less than 1 month). Eventual interruption or fi of the organization. Cost of Risk Materialization (k€): 350 -700 €k % of impact on sales of the Group (Consolidated): 0,10%  numerous complaints, in case of risks, or appreciation, in case of opportunities, from      Major breach, in case of risks, or adherence, in case of opportunities, of internal procedures. A little likely. An event occured occasionally in the history of BEFESA or similar companies (Sectoral risk). 1 Minor damage, in case of risks, or improvements, in case of opportunities. Cost of Risk Materialization (k€): <350 €k % of impact on sales of the Group (Consolidated): 0,05%  isolated complaints, in case of risks, or praises, in case of opportunities, from customers  the Organization. Minor breach, in case of risks, or adherence, in case of opportunities, of internal procedures. Unlikely. It has happened at most once in the history of BEFESA. General disclosures continued For the assessment of risks and opportunities, the parameters to be used in the methodology are detailed,  90 Befesa Annual Report 2024    environmental topics.  critical. Key governance topics include corruption and bribery, and corporate culture and complaints mechanisms. Materiality matrix 1.00 2.00 3.00 4.00 5.00 5.00 4.00 3.00 2.00 1.00 Impact materiality Financial materiality 6 1 5 13 11 14 7 15 17 16 18 12 20 19 20 21 10 23 9 4 8 Befesa’s material topics: Climate change mitigation Energy Air pollution fl including resource use Waste management and fl Working conditions Health and safety Equal treatment and opportunities for all Corporate culture and complaints mechanisms Corruption and bribery Environmental Social Governance 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 91Befesa Annual Report 2024 SBM-3 Sustainability material impacts, risks and opportunities fi impacts, risks and opportunities related to sustainability issues, taking into account the sustainability reporting standards issued by  described above that contribute to  Befesa operates.In addition, Befesa’s internal stakeholders contribute to the fi  activities, they manage the relationship  the potential impacts, risks and ff them or the organisation. fi of the impacts, risks and opportunities,  advisor, has taken into consideration  y Internal context: internal policies, risk map, annual and sustainability reports, Befesa’s operations y External context: peers benchmark,  and regulations, ESG questionnaires y  managers, upstream and  (clients, suppliers, third parties, etc.) y Assessment methodology previously stated The list of potentially material impacts, risks and opportunities related to ESG topics (approximately 210 impacts,  in 2024) is considered the basis for  determining the material impacts, risks  corresponding material topics are derived. These impacts, risks and opportunities fi Befesa sustainability strategy. Befesa has implemented controls to avoid or reduce potential risks or negative impacts. In addition, Befesa has implemented measures to achieve the potential opportunities or positive impacts, as is stated in the impacts, risks and opportunities charts. Management takes into consideration ff fi sustainability strategy and the decision-making. In the methodology established for the risk and opportunities assessment, fi the magnitude criteria. The scale is  y Very high: > €21m y High: €7m–€21m y Medium: €0,7m–€7m y Low: €0,35m–€0,7m y Very low: < €0,35m Every risk and opportunity  fi mitigation controls have been    Befesa analyses its risks and opportunities internally every year ff strategy and decision-making. fiff into consideration for the annual budget, including capex plan, cash fl Management prepares the budget and  Sustainability Committee and the fi Befesa’s business model and strategy integrates sustainability, risk management and long-term adaptability. The Company addresses environmental and regulatory risks    opportunities. Its global presence and fi and supply chain dependencies, ensuring business continuity. Befesa continuously invests in technological innovation, process  ffi performance. In addition, its commitment to decarbonisation 1 and  reinforcing its role in sustainable  fl navigate challenges, mitigate risks and seize emerging opportunities in an evolving global landscape. All of the material impacts, risks and opportunities described are part of the material topics detected in the DMA. General disclosures continued 92 Befesa Annual Report 2024 Environment: Climate change mitigation Positive impacts Negative impacts Reduction of environmental harm and carbon footprint by recycling materials from resource extraction, mitigating the negative impacts of mining activities on climate.  by enabling EAF steel production and secondary aluminium production. Reinforcement of the environmental commitment of employees and value chain members through conducting a life cycle analysis approach to evaluate its climate impact across the value chain. Generation of CO emissions, especially Scope 1, due to the dependency on the use of reducing agents in the production process, mainly coke in the steel dust business, needed for the reduction and oxidation chemical reaction that produces the separation of the zinc at a very high temperature. Absence of emissions reductions stems from the lack of commitment to initiatives aimed at reducing GHG emissions, such as SBTi (Science Based Targets initiative). Opportunities Risks fi by developing more distinguished internal policies in each in climate change area area to convey a clear message and   sustainability ratings and indexes, such as ISS ESG, MSCI, Sustainalytics, Vigeo Eiris, global challenges index, etc. fi emissions of the company. Operating costs or production losses resulting from the impact fl  fi industry is exposed to several carbon risks according to Befesa’s main business activities. This could lead to the violation of the rules set by the Paris Agreement. Partial alignment of the risk management related to climate risk disclosure according to ISS rating. ff investment portfolios.  fi Environment: Energy Positive impacts Negative impacts  consumption of electricity through photovoltaic usage at one  guarantee of origin, installing LED lighting and material, etc.). fiffi an excessive energy intensity in facilities and processes that have not yet implemented the energy management system established by international standards like ISO 50001 fi Increase in energy use, driven by the inclusion of the EAF steel dust recycling. Increase in energy use, driven by the inclusion of the EAF steel dust recycling. 1 fi 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 93Befesa Annual Report 2024 General disclosures continued Opportunities Risks  best practices, stemming from the failure to provide training on the subject. Possible increased production costs due to dependence on external energy sourcing. Given the highly volatile nature of the energy market, relying on third parties can result in sudden spikes in expenses.   are increasingly hiking prices due to charges imposed to reduce their consumption. ffi  resulting in a loss of product competitiveness due to higher production costs. Environment: Pollution of air Positive impacts Negative impacts fi and management measures implemented in the sites. Impact on employee health due to the exposure to air  issues. Impact on the surrounding community from the air pollution of Befesa’s operations that can cause concern for public health, decreased quality of life and discontent among local  Damage of the ozone layer due to direct emissions originating through the use of coke in the production process. Opportunities Risks    practices. This can enhance its reputation among customers, investors and the community, attracting environmentally  Increase in sanctions imposed as a result of non-compliance fi related conditions in environmental authorisations. Lack of anticipation of future legislation regarding air particles. Legislation is expected to get more and more restrictive and Befesa should adapt by cutting emissions and air particles. Higher investment necessities due to the need to improve facilities to reduce air pollution. 94 Befesa Annual Report 2024 Environment: Resources inflows including resource use Positive impacts Negative impacts fi generated by other manufacturers. Optimisation of recyclability of materials enables the  ffi Preservation of natural resources and reduction of need for virgin material extraction by reclaiming valuable material from ffi Long-term resilience by embracing circular economy  fi Greater emissions due to a purchase of high emissions materials. Opportunities Risks Leadership in the emerging market of sustainable mining through a marketing strategy that attracts investment to a sector previously isolated due to a lack of sustainability. Cost savings by using remnants generated in previous production processes.   ff Loss of stakeholder trust because of poor resource ff reputation of the production plant. ffi  materials and natural resources. ffi  Reputational harm due to a lack of monitoring the origin  fl  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 95Befesa Annual Report 2024 General disclosures continued Environment: Waste management and resource outflow for waste Positive impacts Negative impacts Conservation of natural resources such as metals, minerals    ffl treatment technologies to reduce the environmental impact. Preservation of land for agriculture, conservation and  fi   generated by other companies.     fi  Befesa’s plants.  hazardous, due to a lack of adherence to rigorous procedures such as established global standards. Opportunities Risks fi process. Improvement in reputation by advertising the second life given  fi   Social: Working conditions Positive impacts Negative impacts    labour relations, such as collective agreements. Increased employee retention and higher productivity by fffl balance.  due to a high rate of absenteeism in some locations. Opportunities Risks Greater commitment to tasks and achievement of fi  Loss of personal information of employees and stakeholders due to a cyberattack through online scamming. fl in certain countries, unleashing in strikes. 96 Befesa Annual Report 2024 Social: Health and safety Positive impacts Negative impacts  safety measures and carrying out risk assessments of all plants, increasing the satisfaction of the employees.   are outside the scope of application of the International Standard ISO 45001. Opportunities Risks  fi leads to greater productivity, job satisfaction and employee retention. fi and legal costs for the Company, including injury compensation, medical treatment expenses, and grounds for  Development of occupational diseases over the next years   as a direct impact in its employees' health and safety. Losing employees and hiring shortages at plants that   01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 97Befesa Annual Report 2024 General disclosures continued Social: Equal treatment and opportunities for all Positive impacts Negative impacts Promotion of diversity through recruitment and talent management practices, training and development of opportunities to cultivate a culture of inclusivity, and carry out campaigns on equality and diversity. Increase of gender diversity in senior management by   fi Sector historically dominated by men, causing a gender  Opportunities Risks Commitment to equality can generate a better reputation and  customers by demonstrating a commitment to shared social and ethical values.  fl  Governance: Corporate culture and complaints mechanisms Positive impacts Negative impacts Enhancement of employee engagement by fostering a sense of belonging and purpose among employees derived from  Improved corporation reputation through the implementation of policies and procedures focused on transparency, truthfulness, good practices and ethical behaviour. fi fi   actions related to Befesa’s sustainability strategy regarding resources and people due to the disengagement of interest  ff the expectations of interest groups in terms of quality, environment, health and safety management.  of potential repercussions, leads to employees feeling inhibited  ffi unintentional mistakes or even act negligently. Although compliance training programmes are in place, they may not be comprehensive enough for all employees. Violation of employee privacy, exposure of sensitive information, and the possibility of this information being used for retaliation by not having an adequate management system to prevent leakage of personal data of employees. 98 Befesa Annual Report 2024 Opportunities Risks fi strategic positioning in response to the demand from interest groups. Competitive positioning as leaders through the introduction and management of ethical aspects in the organisation and operation of Befesa. A corporate culture fosters creativity and innovation among employees, driving the generation of innovative solutions to industrial challenges. Enhancing transparency and accountability attracts fi stakeholders, and ensures comparability of information through the reporting of sustainability reports. ffi  fi Protection from potential litigation and legal sanctions by ff  Failure to consider business conduct risks can lead to operational issues such as supply chain disruptions due to a scarcity of natural resources, labour disputes related to  arising from poor governance. ff changes can result in a loss of brand value.  governance can damage the reputation of the organisation, productivity among employees, and a decrease in market share and income of the organisation. Possible rise in the cases of corruption and bribery due to ffi unintentional mistakes or negligent acts. Reputational issues derived from the leakage of Befesa’s fi  consequences such as defamation or unfounded accusations.   Befesa’s internal policies. fi capital markets regulations, given its status as a listed company. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 99Befesa Annual Report 2024 General disclosures continued Governance: Corruption and bribery Positive impacts Negative impacts  through the availability of compliance management and   to suppliers. Reduction of corruption and bribery crimes by promoting  rules and policies established by Befesa. Foster transparency, accountability and good governance fi   ff Possible rise in the cases of corruption and bribery due to ffi ffi ff  stakeholders due to potential illegal or ethically questionable activities, such as money laundering, corruption or  Opportunities Risks Improvement of transparency and accountability as an opportunity to increase the comparability of information and therefore makes investing in Befesa more attractive.   Strengthening the culture of ethics and integrity as an opportunity to increase the comparability of information, making investing in Befesa more attractive.  fi ffi eliminate corrupt practices that may hinder the Company’s ffi to protect Befesa’s reputation and maintain the trust of customers, suppliers and investors. ffi  incurring possible future sanctions. fi ff requirements. Economic sanctions due to activities considered unfair competition. 100 Befesa Annual Report 2024 IRO-2 Disclosure requirements in ESRS covered by the Befesa’s sustainability statement  ESRS disclosure requirements in fi  have guided the preparation of its sustainability statements. The tables can be used to navigate fi disclosure requirement in the sustainability statements. Disclosure requirement Section/Report Page ESRS 2 General disclosures BP-1 General basis for preparation of the sustainability statement General disclosures 76 BP-2 fi General disclosures 76 GOV-1 Role of management & sustainability matters addressed General disclosures 76 GOV-2 GOV-3 Integration of sustainability-related performance in incentive schemes General disclosures 80 GOV-4 Statement on due diligence General disclosures 82 GOV-5 Risk management and internal controls General disclosures 82 SBM-1 Strategy, business model and value chain General disclosures 83 SBM-2  General disclosures 85 IRO-1 Double Materiality Analysis General disclosures 86 SBM-3 Sustainability material impacts, risks and opportunities General disclosures 92 IRO-2 Disclosure requirements in ESRS covered by the Befesa´s sustainability statement 101 MDR-P  General disclosures 108  yet have any information related to a disclosure requirement, no reference is made. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 101Befesa Annual Report 2024 Disclosure requirement Section/Report Page ESRS E1 Climate change ESRS 2 GOV-3 Sustainability in Befesa’s incentive schemes Environmental 122 ESRS 2 IRO-1 Processes to identify and assess IROs Environmental 122 ESRS 2 SBM-3 Impacts, risks and opportunities Environmental 126 E1-1 Climate Action Plan Environmental 128 E1-2 Policies Environmental 126 E1-3 Action and resources Environmental 131 E1-4 Targets Environmental 134 E1-5 Energy Environmental 135 E1-6 Emissions Environmental 136 E1-7 Carbon credits Environmental 139 E1-8 Internal carbon pricing Environmental 139 Disclosure requirement Section/Report Page ESRS E2 Pollution ESRS 2 IRO-1 Processes to identify and assess IROs Environmental 140 E2-1 Policies Environmental 142 E2-2 Actions and resources Environmental 142 E2-3 Targets Environmental 144 E2-4 Air pollution Environmental 144 General disclosures continued 102 Befesa Annual Report 2024 Disclosure requirement Section/Report Page ESRS E5 Resource Use and Circular Economy ESRS 2 IRO-1 Processes to identify and assess IROs Environmental 145 E5-1 Policies Environmental 147 E5-2 Actions and resources Environmental 149 E5-3 Targets Environmental 149 E5-4 fl Environmental 150 E5-5 fl Environmental 151 Disclosure requirement Section/Report Page ESRS S1 Own workforce SBM2,SBM3  Social 154 S1-1 Policies Social 157 S1-2 Processes for engaging Befesa employees Social 159 S1-3 Processes to remediate impact and channels to raise concerns Social 160 S1-4 Actions to mitigate risks and pursuing opportunities Social 161 S1-5 Targets Social 165 S1-6 Befesa Employee Metrics Social 167 S1-7 Non-Employee Workforce Social 169 S1-8 Collective Bargaining and Social Dialogue Social 170 S1-9,S1-12 Diversity, Equity and Inclusion Social 170 S1-10, S1-11, S1-15, S1-16 Compensation and Well-being Social 171 S1-13 Training and Development Social 173 S1-14 Health and Safety Social 176 S1-17 Discrimination, Incidents and Human Rights Violations Social 177 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 103Befesa Annual Report 2024 Disclosure requirement Section/Report Page ESRS G1 Pollution ESRS 2 GOV-1 Business conduct: role of management Governance 178 ESRS 2 IRO-1 Business conduct: impacts, risks and opportunities Governance 180 G1-1 Corporate culture and business conduct policies Governance 180 G1-3 Prevention and detection of corruption or bribery Governance 189 G1-4 fi Governance 191   Disclosure requirement Data point Sustainability statements SFDR reference Pillar 3 reference Benchmark regulation reference EU climate law reference Material/ Not material Page ESRS 2 GOV-1 21 (d) Board's gender diversity X X Material 76 ESRS 2 GOV-1 21 (e)  are independent X Material 76 ESRS 2 GOV-4 30 Statement on due diligence X Material 82 ESRS 2 SBM-1 40 (d) i Involvement in activities related to fossil fuel activities X X X Not material ESRS 2 SBM-1 40 (d) ii Involvement in activities related to chemical production X X Not material ESRS 2 SBM-1 40 (d)iii Involvement in activities related to  X X Not material ESRS 2 SBM-1 40 (d)iv Involvement in activities related to cultivation and production of tobacco X Not material ESRS E1-1 14 Transition plan to reach climate neutrality by 2050 X Material 128 ESRS E1-1 16 (g) Undertakings excluded from Paris-aligned benchmarks X X Material 128 ESRS E1-4 34 GHG emission reduction targets X X X Material 134 ESRS E1-5 38 Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors) X Material 135 ESRS E1-5 37 Energy consumption and mix X Material 135 General disclosures continued 104 Befesa Annual Report 2024 Disclosure requirement Data point Sustainability statements SFDR reference Pillar 3 reference Benchmark regulation reference EU climate law reference Material/ Not material Page ESRS E1-5 40-43 Energy intensity associated  impact sectors X Material 135 ESRS E1-6 44 Gross Scope 1, 2, 3 and total GHG emissions X X X Material 136 ESRS E1-6 53-55 Gross GHG emissions intensity X X X Material 136 ESRS E1-7 56 GHG removals and carbon credits X Material 139 ESRS E1-9 66 Exposure of the benchmark portfolio to climate-related physical risks X Not Material ESRS E1-9  66 (c) Disaggregation of monetary amounts by acute and chronic fi assets at material physical risk X Not Material ESRS E1-9 67 (c)  of its real estate assets by ffi X Not Material ESRS E1-9 69 Degree of exposure of the portfolio to climate-related opportunities X Not Material ESRS E2-4 28 Amount of each pollutant listed in Annex II of the E-PRTR regulation  X Material 144 ESRS E3-1 9 Water and marine resources X Not material ESRS E3-1 13 Dedicated policy X Not material ESRS E3-1 14 Sustainable oceans and seas X Not material ESRS E3-4 28 (c)  X Not material ESRS E3-4 29  per  X Not material ESRS 2- IRO-1 - E4 16 (a) i X Not material ESRS 2- IRO-1 - E4 16 (b) X Not material ESRS 2- IRO-1 - E4 16 (c) X Not material 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 105Befesa Annual Report 2024 Disclosure requirement Data point Sustainability statements SFDR reference Pillar 3 reference Benchmark regulation reference EU climate law reference Material/ Not material Page ESRS E4-2 24 (b)  practices or policies X Not material ESRS E4-2 24 (c)  or policies X Not material ESRS E4-2 24 (d) Policies to address deforestation X Not material ESRS E5-5 37 (d)  X Material 151 ESRS E5-5 39   X Material 151 ESRS 2- SBM3 - S1 14 (f) Risk of incidents of forced labour X Material 154 ESRS 2- SBM3 - S1 14 (g) Risk of incidents of child labour X Material 154 ESRS S1-1 20 Human rights policy commitments X Material 157 ESRS S1-1 21 Due diligence policies on issues addressed by the fundamental International Labor Organization Conventions 1 to 8 X Material 157 ESRS S1-1 22 Processes and measures for ffi beings X Material 157 ESRS S1-1 23 Workplace accident prevention policy or management system X Material 157 ESRS S1-3 32 (c)  mechanisms X Material 160 ESRS S1-14 88 (b) & (c) Number of fatalities and number  X X Material 176 ESRS S1-14 88 (e) Number of days lost to injuries, accidents, fatalities or illness X Material 176 ESRS S1-16 97 (a) Unadjusted gender pay gap X X Material 171 ESRS S1-16 97 (b) Excessive CEO pay ratio X Material 171 ESRS S1-17 103 (a) Incidents of discrimination X Material 177 ESRS S1-17 104 (a) Non-respect of UNGPs on business and human rights and OECD X X Material 177 ESRS 2- SBM3 – S2 11 ( b) fi forced labour in the value chain X Not material ESRS S2-1 17 Human rights policy commitments X Not material General disclosures continued 106 Befesa Annual Report 2024 Disclosure requirement Data point Sustainability statements SFDR reference Pillar 3 reference Benchmark regulation reference EU climate law reference Material/ Not material Page ESRS S2-1 18 Policies related to value chain  X Not material ESRS S2-1 19 Non-respect of UNGPs on business and human rights principles and OECD guidelines X X Not material ESRS S2-1 19 Due diligence policies on issues addressed by the fundamental International Labor Organization Conventions 1 to 8 X Not material ESRS S2-4 36 Human rights issues & incidents connected to its upstream and  X Not material ESRS S3-1 16 Human rights policy commitments X Not material ESRS S3-1 17 Non-respect of UNGPs on business and human rights, ILO principles or and OECD guidelines X X Not material ESRS S3-4 36 Human rights issues and incidents X Not material ESRS S4-1 16 Policies related to consumers and end users X Not material ESRS S4-1 17 Non-respect of UNGPs on business and human rights and OECD guidelines X X Not material ESRS S4-4 35 Human rights issues and incidents X Not material ESRS G1-1 §10 (b) United Nations Convention against Corruption X Material 180 ESRS G1-1 §10 (d)  X Material 180 ESRS G1-4 §24 (a) Fines for violation of anti-corruption  X X Material 191 ESRS G1-4 §24 (b) Standards of anti-corruption and anti-bribery X Material 191 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 107Befesa Annual Report 2024 MDR-P Policy overview fi fi  Policy Description of key contents Policy scope Accountable for implementation Availability Code of conduct – Main cornerstone of the CMS of Befesa. – Provides rules and guidelines according to the values and principles of the Company involving all departments or areas (including, for example, HR and IT). –  and regulations, maintaining high ethical standards and protecting the Company’s reputation. – Prohibits conducts like anti-competitive practices, corruption and political contributions. – Fosters behaviours such as ensuring data security, maintaining fi transparency in donations and sponsorships. Befesa employees Compliance ffi Corporate intranet and corporate  General compliance policy –  – Emphasises management commitment to compliance. – Contains preventive and detective measures regarding risks. – fi – Encompasses the compliance policies, procedures and rules  Befesa employees Compliance ffi Corporate intranet and corporate  Anti-trust policy –  – Considers employee responsibility and consequences of violations. –  market manipulation. – Denies price coordination, market sharing, capacity limitations and bid-rigging. Befesa employees Compliance ffi Corporate intranet and corporate  Anti-corruption & anti-bribery policy –  – Considers employee responsibility and consequences of violations. – fffiffi  – fi – Donations and sponsoring are also considered. – fl Befesa employees Compliance ffi Corporate intranet and corporate  Anti-money laundering policy – fi behaviour. – fi crime and to not facilitate criminal behaviour. – Minimises money laundering risks considering risk factors, maintaining records and the attendance of training sessions. Befesa employees Compliance ffi Corporate intranet and corporate  General disclosures continued 108 Befesa Annual Report 2024 Policy Description of key contents Policy scope Accountable for implementation Availability fl interest policy – fi fl – Informs about making optimal business decisions, outside employment, prohibitions regarding competition and personal investments. – fl disciplinary actions in cases of non-compliance. Befesa employees Compliance ffi Corporate intranet and corporate  Group security dealings code – Aims to prevent the misuse of non-public information and ensure  – Explains the roles of restricted persons, persons discharging managerial responsibilities and persons closely associated and their obligations. – fi dealing and also trade based on inside information. – fi  Befesa employees Legal Counsel & Compliance ffi Corporate intranet fi industrial and intellectual property policy – Reinforces the goal of the Company to protect industrial and intellectual property rights. – Stresses the proper use of Befesa’s trademarks and corporate identity. – Obliges employees to report any misuse of Befesa’s trademarks or logos by third parties. – Fosters the implementation of security measures to protect information and computer systems. – fi proprietary information. Befesa employees Legal Counsel & Compliance ffi Corporate intranet and corporate  International sanctions policy –  and export control restrictions imposed by national governments and international bodies. –  used for military and civil applications. –  – Outlines the importance of screening business partners and reporting transactions involving sanctioned countries to the persons in charge. – Provides a list of jurisdictions subject to sanctions. Befesa employees Compliance ffi Corporate intranet and corporate   channel protocol & policy –   – fi fi – ff reported person’s rights. – fi  Befesa employees & third parties Compliance ffi Corporate intranet 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 109Befesa Annual Report 2024 Policy Description of key contents Policy scope Accountable for implementation Availability Privacy policy –  collected, processed and protected. – Explains that data requested in portal form is mandatory and cannot be processed if not provided correctly. – fi can be contacted for data protection enquiries. – Explains that data is processed to manage information requests, complaints, communications and recruitment processes. – fi and port their data, and can exercise these rights by contacting Befesa. Befesa employees & third parties Legal Counsel & Compliance ffi Corporate intranet and corporate  Environmental, health & safety and quality policy – Points out that the Company aims for ZERO incidents among employees and contractors, prioritising safety and health over economic gains or production targets. – Management levels are committed to EHSQ, leading by example and fostering a safety culture. – Promotes regular training for safe practices and environmental  ff – Remarks on the need to monitor conditions to prevent environmental   –  actions are observed, promoting a proactive safety culture. – Indicates that regular inspections, audits and adherence to legal and industry standards ensure continuous EHSQ improvement. Befesa employees & third parties Environmental, Health & Safety Director Corporate intranet and corporate  Security policy – Aims to protect assets and to ensure that access is restricted to  managing risks. – Ensures the protection and compliance of Befesa’s information systems. – fi responsibilities to guarantee the protection of information. – Provides information about potential violations that could result in ff Befesa employees IT Director Corporate intranet General disclosures continued 110 Befesa Annual Report 2024 Policy Description of key contents Policy scope Accountable for implementation Availability Diversity, equality and inclusion policy –  discrimination. – Aims to oppose any form of harassment, victimisation or discrimination against employees, customers and suppliers. – ff ff ffi Befesa & third parties HR & CSR Director Corporate intranet and corporate  HR resources policy – Ensures that recruitment, promotion and remuneration are based on merit and performance, free from discrimination. –  based on personal characteristics. –  environment for all employees and stakeholders. – Seeks to provide regular training and development opportunities for all  Befesa employees HR Director Corporate intranet Human rights remediation policy – Commit to respecting all internationally recognised human rights and  – ff rehabilitation, apologies, restitution and guarantees of non-repetition. –    – Provides annual training on the code of conduct, CMS and human rights through DEI sessions. Befesa & third parties HR Director Corporate intranet 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 111Befesa Annual Report 2024 Environmental: The EU Taxonomy Introduction  dialogue and legislation regarding environmental protection and climate change, it is the European Union (EU)’s fi emanates the EU Taxonomy for Sustainable Activities (Regulation  The reporting tool acts as a fi fi  The aim is then to have a common  entity or activity could be considered fi   across organisations established or   related regulations considers six environmental objectives, each presenting a set of technical screening criteria. These objectives are: 1. Climate change mitigation 2. Climate change adaptation 3. Sustainable use and protection  4. Transition to a circular economy 5. Pollution prevention and control 6. Protection and restoration of biodiversity and ecosystems On this account, an activity is  potential to make a substantial contribution to at least one of the six environmental objectives. fi as environmentally sustainable and fi  fi EU Taxonomy Regulation: 1. Making a substantial contribution to at least one environmental objective  fi fi environmental objectives   safeguards   and the supplementary Delegated Acts, Befesa is required to disclose  fi the EU Taxonomy Regulation. As a fi the proportion of its total turnover, total capital expenditure (capex) and total operating expenses (opex) in  taxonomy-eligible and taxonomy- aligned economic activities. This report presents the results of the EU Taxonomy analysis carried out for the activities of Befesa for the year 2024. It consists of an explanation   substantial contribution and “do no fi the minimum safeguards and the  fi activities of Befesa. Finally, the report presents the tables disclosing the fi and opex) as required by the Article 8 of the Taxonomy Regulation (EU)  Context Befesa is a player in the circular economy. Since 1987, Befesa has helped to reduce the environmental  residues from the steel and aluminium  these sectors, Befesa recovers valuable materials and reintroduces them into the production process, reducing environmental impacts and also the cost of primary production. Befesa is the environmental services partner supporting the circular economy of the secondary steel and  facilities in eight countries in Europe, Asia and North America. 112 Befesa Annual Report 2024  Steel Dust and Aluminium Salt Slags Recycling Services – support the circular economy by recycling more than 2 million tonnes of industrial  fi  recovering more than 1.5 million   economy, reducing the consumption of natural resources. These activities meet the EU Taxonomy criteria for potentially sustainable economic activities, as  ffi resources. This contributes to environmental sustainability, under  to identify possible eligible activities. In 2025 (for the year 2024), the eligibility and alignment analyses   in the relevant Acts. The EU Taxonomy  of Corporate Sustainability Reporting Directive (CSRD) reporting for Befesa.  companies subject to the CSRD must disclose detailed EU Taxonomy alignment metrics in their sustainability  does. This analysis has involved a thorough examination of Befesa’s various ff  the taxonomic activities.  1. Eligibility analysis: To qualify as eligible under the EU Taxonomy, an economic activity must be  Delegated Act and subsequent delegated regulations and pursue at least one of the environmental objectives set by Regulation  2. Alignment analysis: Regarding aligned activities, a study of the alignment of eligible activities has been carried out and, as they do ff they are not aligned. 3. Based on the 2024 audited fi capex and opex), the corresponding proportions required by the EU Taxonomy  KPIs are only calculated for the eligible activities, since there are no aligned activities. According to the EU Taxonomy, turnover (Note 5 Annual Accounts), capex fi a. Turnover: Sales or turnover i. Numerator: A portion of net turnover derived from products or services, including intangible assets,  activities eligible according to the EU Taxonomy ii. Denominator: Total net turnover of the Group b. Capex: Expenditures derived from the Company’s investments according to the taxonomy. i. Numerator: This equals the portion of investments fi in the denominator that (i) is related to assets or  Taxonomy-eligible activities   plan to expand Taxonomy- eligible activities or to enable Taxonomy-eligible activities to become  (iii) is related to the purchase of production obtained from economic  the taxonomy and individual measures that enable the target activities to become  greenhouse gas reductions. ii. Denominator: Additions to tangible and intangible assets during the fi before depreciation, amortisation and any remeasurements, including those resulting from revaluations and impairments, corresponding to the fi excluding changes in fair value. Additions resulting from business combinations are also included. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 113Befesa Annual Report 2024 c. Opex: Operating expenses derived from the functioning of a product, business or system according to taxonomy (research and development costs already accounted for in  be accounted for as opex). i. Numerator: the portion of operating expenses included in the denominator that (i) is related to assets or  economic activities that are eligible according to the EU Taxonomy, including training and other human resource adaptation needs, and direct non-capitalised costs representing  (ii) is part of the capex plan to expand economic activities that are eligible according to the EU Taxonomy or to enable eligible economic activities under the taxonomy to be eligible according to the  fi and (iii) is related to the purchase of production obtained from economic activities that are eligible according to the EU Taxonomy and individual measures that enable the target activities to become  greenhouse gas reductions. ii. Denominator:  include direct non- capitalised costs related to research and development, building renovation measures, short-term leases, maintenance and repairs, and other direct expenses related to the fi either by the Company or a  activities are subcontracted, necessary to ensure the continued ffi such assets. In addition to these concepts, leasing costs must be accounted fi companies applying generally accepted national accounting principles that do not capitalise right-of- use assets. Eligibility analysis To determine Befesa’s eligibility under the EU Taxonomy, the descriptions of all relevant activities presented for   evaluate the eligibility of its activities  the EU Taxonomy. Befesa’s economic activities can be fi y Steel Dust Recycling Services – Befesa collects and processes steel dust, a by-product of the steel manufacturing process, to recover valuable zinc and other metals. This recycling process reduces the need  minimises environmental impact fi  y Aluminium Salt Slags Recycling Services – Befesa recycles salt slags and other residues generated during aluminium production. Through this process, the Company extracts aluminium and other valuable materials,  the production cycle, thereby  natural resources.  the activities outlined in Delegated     fi ff Environmental: The EU Taxonomy continued 114 Befesa Annual Report 2024 EU Taxonomy activity identified 2.4 Treatment of hazardous waste i. Description of the taxonomic activity  the overarching activity of most of the companies operating under Befesa. The Company understands this as a  being the very essence of Befesa. The Annex II of the Delegated   fi substantially to the transition to a circular economy, covers activity 2.4.  2.4 is described as the construction, upgrade and operation of dedicated facilities for the treatment of  material recovery operations. Befesa has determined that it does  description for this activity, given that fi recycling or reclamation of inorganic materials other than metals or metal  main activity of Steel Dust Recycling Services from the eligibility and alignment analysis, given that Befesa  compounds. Befesa’s primary activity is unique, ff similar services. This uniqueness has posed a challenge, as there is no fifi  dust recycling. Despite this, Befesa fi circular economy, playing a crucial role in recycling and resource recovery. fi highlights the need for more comprehensive guidelines to accommodate innovative and specialised activities that support the objective of the circular economy. 3.8 Manufacture of aluminium i. Description of the taxonomic activity Befesa produces secondary  highest standards of sustainability.  goals, the Company is actively involved in the manufacturing of secondary aluminium, promoting the circular economy and the sustainable reuse  Befesa contributes to resource conservation and minimises  The Annex I of the Delegated Regulation  fi contributing substantially to climate change mitigation, covers activity 3.8 Manufacture of aluminium. Activity 3.8 is described as the manufacture of aluminium through a primary alumina (bauxite) process or secondary aluminium recycling. EU Taxonomy activity Match with Befesa economic activity EU Taxonomy objective 3.8 Manufacture of aluminium Aluminium salt slags recycling: The process of recycling aluminium salt slag recovers aluminium and other valuable materials from the slag, a residual product of aluminium production. This approach not only   for the aluminium industry. Climate change mitigation Climate change adaptation 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 115Befesa Annual Report 2024 Compliance with the minimum safeguards was examined at a Group level, considering existing corporate policies and risk management processes. Therefore, Befesa covers the minimum safeguards required by the EU Taxonomy Regulation. 116 Befesa Annual Report 2024 Alignment analysis 3.8 Manufacture of aluminium i Substantial contribution to climate change mitigation Befesa has determined that one of its main activities, Aluminium Salt Slags  technical screening criteria listed, fi secondary aluminium. ii Do no significant harm (“DNSH”) a) Climate change adaptation: A robust climate risk and vulnerability assessment must be done to fi established in Annex I of the  Appendix A. In this sense, Befesa is carrying out action to ensure full compliance in the future. b) Sustainable use and protection   Befesa needs to identify and  quality and stress, aiming for good  potential as per Regulation (EU)  EC. The Company must develop   If an environmental impact assessment under Directive  impact assessment, no additional assessment is needed if the risks are addressed. In this sense, Befesa has already implemented an integrated environmental assessment, taking into account the above requirement. c) Transition to a circular  d) Pollution prevention and control: In order to comply, Befesa has   taking into consideration all substances listed. e) Biodiversity Protection DNSH:  Befesa needs to identify and address risks related to biodiversity as per Regulation   Befesa has not yet conducted a  means that there is not yet compliance  adaptation to climate change. In addition, actions are currently being implemented to ensure full compliance. This ongoing process requires careful evaluation and adjustments to meet all the necessary standards and regulations. As a result, Befesa aims to achieve and publish complete alignment in the future once all criteria are satisfactorily met. Minimum safeguards The minimum safeguards are procedures implemented by an entity that is carrying out an economic  the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. This includes the principles and rights set out in the eight fundamental fi Declaration of the International Labor Organization on Fundamental Principles and Rights at Work and the International Bill of Human Rights. These procedures also adhere to the DNSH principle. Befesa’s internal measures and policies on human rights, anti-trust, fl the principles and concepts of the UN Global Compact, the OECD Guidelines on Multinational Enterprises, the UN Guiding Principles on Business and Human Rights (including the principles and rights set out in the eight fundamental conventions fi International Labor Organization on Fundamental Principles and Rights at Work) and the International Bill of Human Rights. Further information on Befesa’s processes and outcomes related to minimum safeguards are included in  Company’s reports: y Human rights: Refer to the Social section in the report. y Anti-bribery and anti-corruption: Refer to the Governance section in this report. y Taxation: Refer to the Consolidated fi the report. y Fair competition: Refer to the Governance section in this report. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 117Befesa Annual Report 2024 Reporting tables Capex Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”) Economic Activities Code CapEx Proportion of CapEx, year 2024 Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Minimum Safeguards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) turnover, year 2023 Category enabling activity Category transitional activity EUR Thousand %                    % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0 0% 0% 0% 0% A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Manufacture of aluminium  CCA 3.8 9,019 9% EL EL     5% CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 9,019 9% 9% 0% 0% 0% 0% 0% 5% A. CapEx of Taxonomy- eligible activities (A.1+A.2) 9,019 9% 9% 0% 0% 0% 0% 0% 5% B. Taxonomy-non-eligible activities CapEx of Taxonomy- non-eligible activities 94,861 91% Total 103,880 100% Proportion of CapEx / Total CapEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 9% CCA 0% 9% WTR 0% 0% CE 0% 0% PPC 0% 0% BIO 0% 0% Environmental: The EU Taxonomy continued 118 Befesa Annual Report 2024 Turnover Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”) Economic Activities Code Turnover Proportion of Turnover, year 2024 Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Minimum Safeguards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) turnover, year 2023 Category enabling activity Category transitional activity EUR Thousand %                    % E T A. TAXONOMY-ELIGIBLE ACTIVITIES (A.1.+ A.2.) A.1. Environmentally sustainable activities (Taxonomy-aligned) Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0 0% 0% 0% 0% A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Manufacture of aluminium  CCA 3.8 367,296 30% EL EL     31% Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 367,296 30% 30% 0% 0% 0% 0% 0% 31% A. Turnover of Taxonomy- eligible activities (A.1+A.2) 367,296 30% 30% 0% 0% 0% 0% 0% 31% B. Taxonomy-non-eligible activities Turnover of Taxonomy- non-eligible activities 871,734 70% Total 1,239,030 100% Proportion of turnover / Total turnover Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 30% CCA 0% 30% WTR 0% 0% CE 0% 0% PPC 0% 0% BIO 0% 0% 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 119Befesa Annual Report 2024 OpEx Substantial contribution criteria DNSH criteria (“Does Not Significantly Harm”) Economic Activities Code OpEx Proportion of OpEx, year 2024 Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Climate Change Mitigation Climate Change Adaptation Water Pollution Circular Economy Biodiversity Minimum Safeguards Proportion of Taxonomy- aligned (A.1.) or -eligible (A.2.) turnover, year 2023 Category enabling activity Category transitional activity EUR Thousand %                    % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0 0% 0% 0% 0% A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Manufacture of aluminium  CCA 3.8 3,292 9% EL EL     10% OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 3,292 9% 9% 0% 0% 0% 0% 0% 10% A. OpEx of Taxonomy- eligible activities (A.1+A.2) 3,292 9% 9% 0% 0% 0% 0% 0% 10% B. Taxonomy-non-eligible activities OpEx of Taxonomy- non-eligible activities 31,812 91% Total 35,105 100% Proportion of OpEx / Total OpEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0% 9% CCA 0% 9% WTR 0% 0% CE 0% 0% PPC 0% 0% BIO 0% 0% Environmental: The EU Taxonomy continued 120 Befesa Annual Report 2024 Footnotes: Key conclusions, changes and restatements are (all driven by secondary aluminium segment): y Turnover: 29.6% eligible (vs 30.5% last year) y Capex: 8.7% eligible (vs 5.3% last  capex including ROU and an increase in assets related to business combination) y Opex: 9.4% eligible (vs 9.5% last   calculating Opex = Revenue minus EBIT. This year Befesa calculates according to the taxonomy, i.e. using non-capitalised R&D expenditure, Repair & Maintenance and Leases royalty-free) y Alignment: 0.0% across all three items (vs 0.0% last year) Row Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity   NO 2. The undertaking carries out, funds or has exposures to construction and  heat, including for the purposes of district heating or industrial processes  best available technologies NO 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen  NO Fossil Gas related activities 4. The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. NO 5. The undertaking carries out, funds or has exposures to construction,  facilities using fossil gaseous fuels. NO 6. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce  NO 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 121Befesa Annual Report 2024 E1 – Climate Change ESRS 2 GOV-3 Sustainability in Befesa’s incentive schemes ESRS 2 IRO-1 Processes to identify and assess IROs ESRS 2 SBM-3 Impacts, risks and opportunities E1-2 Policies E1-1 Climate Action Plan E1-3 Action and resources E1-4 Targets E1-5 Energy E1-6 Emissions E1-7 Carbon credits E1-8 Internal carbon pricing E1 – Climate Change ESRS 2 GOV-3 Sustainability in Befesa’s incentive schemes As indicated in ESRS 2 GOV-3, ESG performance targets are included as part of Befesa’s one-year (annual bonus) and multi-year (stock incentive plan (SIP) variable remuneration schemes. The sustainability-related performance criteria include the implementation of the COe reduction plan to achieve the target of 20% COe intensity rate improvement by 2030 (scope 1 and 2),  fi measured during the performance period include the increase in the  decrease in the COe intensity as a  emissions and higher  ff included in the COe reduction plan. ESRS 2 IRO-1 Processes to identify and assess IROs Befesa operates in 24 sites  recycling technology including complex equipment and materials. Due to their ff ff risks. While the company takes the highest precaution to manage this, climate-related physical hazards can represent physical risks for its assets  potentially impact its operations and value chain. All sites have emergency plans that include climate-related risks and procedures to mitigate these, and  environmental regulation to avoid transition-related risks by adapting the facilities to the latest requirements. In the double materiality assessment, the company analysed potential physical and transition climate-related risks, considering the input of the main ff sections ESRS 2 SBM-3 and IRO-1 for more information). As of today, the ff  explore the possibility of performing a more in-depth climate-related risk analysis based on scenario analysis  this information. Environmental 122 Befesa Annual Report 2024 Impacts, Risks and Opportunities (IRO) associated with E1 Type Description Own operations/Value chain Related policies and procedures Positive Impact Reduction of environmental harm and carbon footprint by recycling materials from resource extraction, mitigating the negative impacts of mining activities on climate. Upstream Integrated Safety, Health, Environment and Quality Policy Contribution to a transition to a low carbon steel industry by enabling Electric Arc Furnace (EAF) steel production and secondary aluminium production. Operation Integrated Safety, Health, Environment and Quality Policy Reinforcement of the environmental commitment of employees and value chain members through conducting a life cycle analysis approach to evaluate its climate impact across the value chain. Operations Integrated Safety, Health, Environment and Quality Policy Promotion of the use of renewable energy (e.g.: selfconsumption of electricity through photovoltaic usage at one of Befesa's steel  guarantee of origin, installing LED lighting and material, etc.). Operations Integrated Safety, Health, Environment and Quality Policy Impacts, Risks and Opportunities (IRO) associated with E1 Type Description Own operations/Value chain Related policies and procedures Negative Impact Generation of CO2 emissions, especially scope 1, due to the dependency in the use of reducing agents in the production process, mainly coke in the steel dust business, needed for the reduction and oxidation chemical reaction that produces the separation of the zinc at a very high temperature. Operations Integrated Safety, Health, Environment and Quality Policy Absence of emissions reductions stems from the lack of commitment to initiatives aimed at reducing greenhouse gas emissions, such as SBTi (Science-Based Targets initiative). Operations Integrated Safety, Health, Environment and Quality Policy Significant energy consumption and inefficiency because of an excessive energy intensity in facilities and processes that have not yet implemented the energy management system established by international fi Operations Integrated Safety, Health, Environment and Quality Policy Increase in energy use driven by the inclusion of the EAF steel dust recycling. Operations Integrated Safety, Health, Environment and Quality Policy 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 123Befesa Annual Report 2024 Environmental continued Impacts, Risks and Opportunities (IRO) associated with E1 Type Description Own operations/Value chain Related policies and procedures Risk Operating costs or production losses resulting from the impact of physical risks fl the proximity of the plants to large bodies  Operations Integrated Safety, Health, Environment and Quality Policy High risk level in the Carbon Risk Classification scale as industry is exposed to several carbon risks according to Befesa's main business activities. This could lead to the violation of the rules set by the Paris Agreement. Operations Integrated Safety, Health, Environment and Quality Policy Partial alignment of the risk management related with climate risk disclosure  ff investment portfolios. Operations Integrated Safety, Health, Environment and Quality Policy Perception of passivity sustainability by stakeholders due to a fi Operations Integrated Safety, Health, Environment and Quality Policy Impacts, Risks and Opportunities (IRO) associated with E1 Type Description Own operations/Value chain Related policies and procedures Opportunity Promotion of transparency and confidence to investors by developing more distinguished internal policies in each ESG area to convey a clear message and  Operations Integrated Safety, Health, Environment and Quality Policy Investor attraction through alignment  and indexes, such as ISS ESG, MSCI, Sustainalytics, Vigeo Eiris, global challenges index, etc… Operations Integrated Safety, Health, Environment and Quality Policy Significant cost saving in purchasing green bonds by reducing emissions of the company. Operations Integrated Safety, Health, Environment and Quality Policy Lack of knowledge among workers regarding energy-saving best practices, stemming from the failure to provide training on the subject. Operations Integrated Safety, Health, Environment and Quality Policy 124 Befesa Annual Report 2024 Impacts, Risks and Opportunities (IRO) associated with E1 Type Description Own operations/Value chain Related policies and procedures Risk Possible increased production costs due to dependence on external energy sourcing. Given the highly volatile nature of the energy market, relying on third parties can result in sudden spikes in expenses. Operations Integrated Safety, Health, Environment and Quality Policy Wrong adjustment of the facilities to renewable energy consumption, resulting in dependence on fossil fuels increasingly hiking prices due to charges imposed to reduce their consumption. Operations Integrated Safety, Health, Environment and Quality Policy High operating costs in production plants ffi have not been implemented, resulting in a loss of product competitiveness due to higher production costs. Operations Integrated Safety, Health, Environment and Quality Policy Impacts: Befesa’s emissions One of the principal environmental impacts for Befesa is its carbon  technology that the company uses. Befesa’s 24 sites track emission intensity and total emissions annually, including Scope 1 & 2, and since 2022, also Scope 3. Direct emission categories (Scope 1) include stationary, process, mobile and fugitive  (Scopes 2 & 3) are disclosed in reference to each business unit’s material categories. To identify each site’s material categories, the company commissioned an external analysis using the indirect emissions categories available in the GHG Protocol.  materiality analysis training session,  emissions measurements. Every year, all sites measure their emissions using emission factors provided by local governments, IPCC, or, if needed, Ecoinvent. Befesa’s plants’ emissions are regulated by local and international regulatory bodies. GHG Protocol processes are applied to identify COe emissions sources and other pollutants such as SOX and NOX are also tracked separately in the  GHG emissions are reported annually  ISO 14064 guidelines (see E1-6). Befesa’s main business activity, steel dust recycling, is currently the higher emitter of CO due to the reliance on the use of emission-intensive reducing agents like coke. As mentioned in E1-1, the company is committed to research,  to reduce its environmental impact. fi and transition climate-related risks in its Double Materiality Analysis.    regulation, all of its sites have developed risk contingency plans    01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 125Befesa Annual Report 2024 The company has considered all information that is available at the reporting date for its analysis. Disclosures are expected to improve over time. Climate related assumptions in Befesa’s financial statements Critical climate-related assumptions fi statements. The company discusses market trends, including factors such as the future demand of recycled materials or scrap availability, but these are usually done on a yearly basis and do not investigate medium- or long-term time frames. ESRS 2 SBM-3 Impacts, risks and opportunities Climate risk and Befesa’s business model In its Double Materiality Analysis, the fi  climate risks. On the other hand, all the environmental risks set out in ESRS 2 SBM-3 related to climate change, resource use, air pollution, energy, and  material topics. y  regulated industries (steel and aluminium industries) and is subject of many local environmental regulations such as SEVESO, EU Emissions Trading System (EU ETS), Industrial Emissions   ffi among others). The introduction of more stringent environmental  focus on sustainability and  for the company since 1987 and make its business model resilient   opportunities that these market and  business model that helps protect the environment at the same time fi These factors are expected to continue to support the company’s  tighter environmental regulations and Befesa’s services become ever more critical to operators in the steel and aluminium industries. Business model resilience The company has conducted a preliminary analysis of the International Energy Agency (IEA) Global Energy and Climate (GEC) Model scenarios. Given its focus on recycling steel and ff  fi fi  account in the next steps to perform a   According to the IEA, “increased scrap recycling and mass deployment of innovative technologies are key levers  example the IEA analyses that the share of scrap in metallic inputs is expected to increase 15% in 2050 from a 2022 baseline of 33%, reaching 48%. In aluminium, the share of secondary production is expected to increase 20% in 2050 from a 2022 baseline of 36%, reaching 56%. This preliminary resilience analysis does not consider climate or business scenarios applied to Befesa’s risks or information about its ability to adjust its strategy in the short, medium and long term. It also does not include areas of uncertainty or consider the ff ff ff its climate risk and resilience analysis,  scenario analysis that includes its risks and mitigation actions against them, as fiff E1-2 Policies Befesa has an overarching Environment, Health, Safety & Quality (EHSQ) Policy that sets out its guiding principles related to these issues (see ESRS 2 MDR-P). With regards to climate change mitigation, it points out that: y All management levels at Befesa are committed to EHSQ. y Befesa promotes regular training for safe practices and environmental responsibility or employees and  ff y The company is committed to monitor conditions to prevent environmental harm and accidents,   Environmental continued 126 Befesa Annual Report 2024 y Employees must intervene  unsafe actions are observed, promoting a proactive safety culture. y Regular inspections, audits and adherence to legal and industry standards ensure continuous EHSQ improvement. As of today, this policy does not fi ffi   these topics in the policy going  Environment, Health, Safety & Quality (EHSQ) Policy is available in Befesa’s  the Environmental, Health & Safety Director and all Befesa employees are accountable for its implementation. In addition to these overarching principles, the plants have developed independent policies according to the regional policy and third-party  Some examples are: y All sites except those in China and the US are ISO 50001 compliant and hence have developed an ffi  reduce the site’s environmental  ffi and implementing technologies and controls for continuous improvement. These policies ffi  deployment. y All ISO 14001-compliant sites have developed an environmental policy that sets out environmental objectives and actions to achieve the intended outcomes of the environmental management   These policies address climate change mitigation. Downstream (customers and distribution): y Key customers: – Zinc smelters: Purchase WOX oxide for zinc production. – Secondary aluminium producers: Use recovered aluminium for  y Distribution channels: fi end users through a combination of direct sales contracts and strategic logistics partnerships. By leveraging its global footprint, advanced recycling technologies and its stakeholder relationships, Befesa continues to enhance sustainability and drive value creation across its entire supply chain. For more information, please see environmental chapter. SBM-2 Interests and views of stakeholders For Befesa, stakeholders are those individuals and organisations that ffff business operations. Stakeholders are not just passive observers but active  fi success and sustainability of Befesa. Recognising their importance and ff  sustainability goals. The key stakeholders include customers, employees, local communities, suppliers, shareholders, rating agencies, analysts, government, NGOs and the media.  fi for the entire group. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 127Befesa Annual Report 2024 E1-1 Climate Action Plan Befesa has developed a Climate  its 2023 ESG Report. It establishes a carbon intensity 1 reduction target of 20% by 2030 and an ambition to become Net Zero by 2050. To better explain the company’s Climate Action Plan, it is useful to clarify its business model and sources of emissions: Befesa’s products and services can contribute to mitigate climate change   fi operations of Befesa today use technologies that require inputs to  and extract the valuable materials   activities: y Direct emissions (scope 1) coming from the use of reducing agents in the steel dust production   coal (carbon) and steel dust in the Waelz furnaces. This process is a reduction and oxidation chemical reaction that produces the separation of zinc at a very high temperature. y Additional direct emissions (scope 1) come from the use of natural gas in the secondary aluminium and salt slags businesses to produce the heat required in the metallurgical processes. y The use of electricity (Scope 2) is another source of indirect fi the Scope 3 emissions represent the remaining CO emissions at Befesa are mainly coming from: – Purchased goods and services – Fuel and energy-related – Activities (not included in Scope 1 or Scope 2) – Upstream transportation and distribution –  In summary, the carbon footprint (location based method) of Befesa  y Scope 1: 58% y Scope 2: 21% y Scope 3: 20% By business unit, around 80% of the   time represents a similar portion of the total EBITDA generated by Befesa. To minimise carbon emissions, Befesa applies best available technology (BAT) and looks for improvement opportunities as part of its operational excellence programme – the company is committed to investing in technology to reduce its emissions. Befesa’s decarbonisation investments are not done as part  Taxonomy Delegated Regulation (EU)   improvements are needed and fi Befesa’s Climate Action Plan By 2050, Befesa’s goal is to be net  Agreement commitment to keep global  ambition and the company’s intensity  by the sustainability committee in 2022. fi  contribute to reduce its carbon intensity by 20% by 2030. When added together, these initiatives have the potential to reduce Befesa’s intensity by up to 33%: 1. Reduction of coke use by 40% in USA plants by improving operations and increasing ffi as SDHL air lances. This has the potential to reduce carbon intensity by 10% (0,05 Tn CO 2. Green power sourcing to reduce Scope 2 emissions at its Smelter, Stainless and Europe sites through  guarantees of origin purchases. This has the potential to reduce the intensity by 18% (0,09 Tn CO output). 3. Coke replacement with biomass in its the European steel plants. This could reduce the emissions intensity by 0,02 Tn CO input (3%). 4. Natural gas replacement by 40% hydrogen sources in its the aluminium sites. This could reduce the intensity by 2% (0,02 Tn CO 1 Carbon intensity refers to kg COe per tonne of residue recycled (input). Environmental continued 128 Befesa Annual Report 2024 Apart from these four levers, the company also implements smaller  continuous improvement and ffi operational excellence programme. See E1-3 and E1-4 for its progress in implementing the decarbonisation levers to reach its 2030 carbon intensity goal. Befesa currently does not have a year-by year plan to reach its Net Zero by 2050 ambition, as this is heavily reliant on technology deployment, demand, and availability. Befesa’s locked-in emissions Befesa’s business model is compatible    Agreement. Compared to alternative sources, Befesa saved an estimated 2,596 kilotons CO eq in 2024 2 . Additionally, BEFESA contributes to the Electric Arc Furnace industry (EAF) (c. 85% less carbon intensive than Basic Oxygen Furnace, BOF) 3 and secondary aluminium (c. 99% less carbon intensive than primary aluminium) 4 . 2   fl 3   4 Considering Primary Production World Average vs Secondary Production CO2e intensity (Tn CO2 2021 Baseline (Pro-forma) 0.56 0.56 0.55 0.49 0.02 0.02 0.02 0.02 0.02 0.45 0.05 4% 4% 4% 4% 4% 10% 2022 Coke reduction USA (remaining) 2023 Smelter 100% green 2024 Stainless 100% green Europe 100% green Biocoke Europe 20% 40% Hydrogen in Au 2030 Target -20% 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 129Befesa Annual Report 2024 Even though Befesa’s products and processes are intrinsically less carbon-intensive than the alternative, the company currently depends on emission-intensive components  a large portion of its emissions. The company’s business strategy  is rooted in an increased contribution  environmentally compliant and reducing its carbon intensity through investments and R&D. The company is committed to invest in technology to reduce the carbon  depend on the evolution of market enablers such as market demand, carbon capture, carbon prices, and energy technology developments. In 2024, it allocated 1.67M€ of research and development budget and 12M€ of CapEx to emission reduction projects. As it deploys its business   emission intensity target results in a gross emission reduction to reach the Net Zero target. fi  Zero by 2050 ambition and has started   organisations. GHG emissions overall impact 1 ; 2024 pro forma 2 (Kton CO2eq) Alternative to steel dust recycling BEFESA stand alone BEFESA holistic impact Alternative to stainless recycling Alternative to salt slag recycling Alternative to secondary aluminium recycling Primary aluminium production, considering marginal production 3 Primary production of aluminium, bauxite, ammonium sulphate Primary production of ferroalloys (Ni, Cr, Mo) Primary Zn production, considering marginal production 3 Alternative source if BEFESA would not exist 482 2,490 -2,597 140 780 1,294 878152 96 139 Environmental continued OxideBefesa  Crude steel dust recycling Salt slags and SPL recycling Stainless-steel dust recycling Secondary aluminium 130 Befesa Annual Report 2024 Steel projects Technology Current development Charcoal (biocoke) initiative:  a CO-neutral reducing agent –  – Charcoal smelting tested at lab-scale, large-scale testing in discussion Dust2Value project:  hydrogen, a CO-neutral reducing agent –  – Undergoing design and construction of testing facility Aluminium projects Technology Current development HyInHeat: Replacement of natural gas  –  supply chain development –  Hydrogas: Hydrogen generation from salt slags capture – Process to capture gases (ammonia, methane…) to produce hydrogen and reduce GHG emissions – European project approved, starting trials internally – Potential impact: 36% reduction in natural gas consumption Activities within the EU Taxonomy  involves the treatment of hazardous  and the essence of the company. fi economic activity as the recycling or reclamation of inorganic materials other than metals or metal  Steel Dust Recycling Services from eligibility and alignment analysis. fi fi  believes that much more of its business should be eligible and fi contribution to the circular economy through recycling and resource recovery. Therefore, its main objective is to have its activities recognised in the Commission Delegated fi  regulator through the Taxonomy Stakeholder Request Mechanism or industrial associations. Other considerations (f) The company does not invest in  coal, oil and gas-related economic activities. The company’s activity does depend on the use of coal as a product. (g) Befesa is not excluded from the EU Paris-aligned Benchmarks. E1-3 Action and resources Befesa’s climate change mitigation actions are embedded in its Climate Action Plan and linked to its Environmental, Health & Safety and Quality (EHSQ) Policy. The company fi emissions intensity reduction by 2030 (see E1-1). The company’s ability to implement some of these actions depends on the development of technology and its allocation of funds through CapEx investments and its Research & Development department (R&D). Befesa’s R&D department is involved in developing technology that enables its transition to Net Zero by 2050, dedicating 1,67M€ to decarbonisation projects in 2024 (for more information on its Climate Action Plan, see E1-1). On the other hand, the sustainable Capex investments take part as part of the recurrent maintenance CapEx    the company maintains its assets according to latest regulation and best practices. These currently do not relate to Taxonomy-aligned CapEx plans. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 131Befesa Annual Report 2024  All decarbonisation investments made this year: Project Spend (€) Business Unit Accounts All decarbonisation-related CapEx 12.4M All Property, Plant and Equipment Lever 1: Reduction of coke use in USA plants 100-500k Steel dust Property, Plant and Equipment Lever 4: HyInHeat Hydrogen replacement testing on-site 500k-1M Aluminium Property, Plant and Equipment Other decarbonisation-related CapEx 11.7M All Property, Plant and Equipment All decarbonisation-related R&D 1.7M All Other Intangible Assets Lever 3:  100-500k Steel dust Other Intangible Assets Lever 4: HyInHeat Hydrogen replacement research 100-500k Aluminium Other Intangible Assets Other decarbonisation-related R&D 1.1M All Other Intangible Assets Actions related to the 4 decarbonisation levers: CO2 intensity reduction (%) CO2 intensity reduction (absolute) Initiative Value chain Target year 2024 cost 5,6 Status Expected (target year) Actual (2024) Expected (target year) Actual (2024) Lever 1: Reduction of coke use in USA plants Procurement & Operations, US steel 2025 100-500k (CapEx) In process 10% (2025) 6% 0.05 0,035 Lever 2: Green power sourcing Procurement & Operations, All locations 2030  Currently studying options 18% (2030) 0 0.09 0 Lever 3: Coke replacement with biomass Procurement & Operations, Global steel 2030 100-500k (R&D) Testing in process 3% (2030) 0 0.02 0 Lever 4: Natural gas replacement with hydrogen Procurement & Operations, Europe aluminium 2030 500k-1M (OpEx and R&D) Testing in process 2% (2030) 0 0.02 0 See E1-1 for more details about Befesa’s intensity targets and progress.  ffi 5 All CapEx invested by plants is reported under ‘Property, Plant and Equipment’ in the annual accounts. R&D can be found under ‘Other Intangible Assets’. 6 As indicated in E1-1, CapEx investments are made ad-hoc and are not part of a sustainable investments plan but rather are included in the maintenance CapEx. Environmental continued 132 Befesa Annual Report 2024 Other decarbonisation investments made this year: ffi of its operational excellence programme. Initiative Outcome Business unit Value chain Location Cost (CapEx)  ffi Steel dust  Europe <10k Installation of Regenerative Thermal Oxidizer (RTO) Mitigate emissions Steel dust  Europe <10k ffi cabinet installation ffi Secondary Aluminium  Europe 10-50k Purchase and installation of bicycle and vehicle charging stations Transport emissions reduction Secondary Aluminium  Europe 10-50k Thermal insulation of the  ffi Steel dust  Europe 10-50k Roof renovation Improved insulation to reduce energy consumption Stainless Steel  Europe 10-50k Energy transformer update Electricity saving Secondary Aluminium  Europe 10-50k Replacement of old  ffi Steel dust  Europe 10-50k ISO 5001-aligned energy saving programmes ff optimisation of facilities and reduced energy use Secondary Aluminium  Europe 50 -100k  frequency driver (VFD) Reduced electricity consumption and improved ffi Stainless Steel  Europe 50-100k General equipment maintenance and improvement Improved equipment ffi Stainless Steel  Europe 50-100k Replace H2 & O2 gauge alarm in furnace building Improve reliability of emissions measurement Stainless Steel  Europe 100-500k fi ffi Stainless Steel  Europe 100-500k Improved ventilation in ffffi Reduced energy consumption Stainless Steel  Europe 100-500k Replacement of refractory equipment Reduced electricity consumption Steel dust  Europe 100-500k Substitution of primary alloys by secondary alloys Energy saving achieved by avoiding electrolysis Secondary Aluminium Value chain Europe 100-500k Gas compressor upgrade Improved equipment Stainless Steel  Europe 100-500k Purchase of energy- saving motors Reduced energy consumption Steel dust  Europe 100-500k 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 133Befesa Annual Report 2024 Initiative Outcome Business unit Value chain Location Cost (CapEx)  fi Reduced electricity consumption and improved ffi Secondary Aluminium  Europe 100-500k  delivery & assembly Reduced electricity consumption and improved ffi Stainless Steel  Europe 100-500k  oven (2024 phase) Reduced energy consumption ffi Secondary Aluminium  Europe 500k-1M Target Goal Scopes 7 Baseline Interim target: 20% COe intensity reduction by 2030 0.45 Tn CO (est. 1.34M Tn COe in 2030 8 ) 1 & 2 0.56 Tn CO Long-term ambition: Net Zero by 2050 122,226 Tn COe 1 & 2 1,222,256 Tn COe (2021 pro-forma) E1-4 Targets Befesa’s aim is to reduce its environmental impact. Due to its goals to expand its business model   reduction target rather than an absolute emissions reduction target.  reduction target in Scopes 1 & 2 by 2030 against a 2021 baseline, and a Net Zero ambition in Scopes 1 & 2 by 2050. The company has measured its baseline as a pro-forma in order to more accurately represent its activities in 2021: the China and USA   emissions using average production metrics for those plants so that comparison is more precise.  are set out in the Climate Action Plan and include improving current  technologies. These rely on high decarbonisation scenarios (1.5ºC  development of green technologies. These mainly target Scope 1 as it is the main source of its emissions (see E1-1 and E1-3). To ensure consistency  inventory boundaries, the company monitors and audits emission disclosures annually at a plant level, and track progress in its annual sustainability reports and bi-annual sustainability committees. 7   8   Befesa’s Net Zero target is in line   90-95% of GHG emission reduction ff fi  fi fi Environmental continued 134 Befesa Annual Report 2024 As the company develops its IRO analysis and environmental policies,  ff actions. At the moment, many of its targets are set at a plant-level and are linked to local legislation and  the side, Befesa has achieved a 11% COe intensity reduction in 2024  its 2030 target of 20% reduction vs. a 2021 baseline. See E1-1 16. for a description of Befesa’s decarbonisation levers and their COe reduction potential. E1-5 Energy Energy consumption and mix Comparative Year 2024 1 Fuel consumption from coal and coal products (MWh) ND 0 2 Fuel consumption from crude oil and petroleum products (MWh) ND 30,010.45 3 Fuel consumption from natural gas (MWh) ND 456,691.51 4 Fuel consumption from other fossil sources (MWh) ND 2,168.93 5 Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources (MWh) ND 729,996.27 6 Total fossil energy consumption (MWh) (calculated as the sum of lines 1 to 5) ND 1,218,867.16 Share of fossil sources in total energy consumption (%) ND 86.68% 7 Consumption from nuclear sources (MWh) ND 100,873.65 Share of consumption from nuclear sources in total energy consumption (%) ND 7.17% 8   ND 0 9 Consumption of purchased or acquired electricity, heat, steam, and cooling from  ND 86,372.98 10  ND 0 11 Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to 10) ND 86,372.98  ND 6.14% Total energy consumption (MWh) (calculated as the sum of lines 6, 7 and 11) 1,4 06,113 .79 The plants measure and report energy consumption on the basis of real data, the accounting of which is based on continuous measurement or weighing, depending on the energy source. Once the data is available at a plant level, it is then consolidated by the EHS corporate team. As it is shown in E1-2, there are some plants with ISO 14001. CO2e intensity (Tn CO2 2021 Baseline (Pro-forma) 0.56 0.56 0.55 0.49 0,45 2022 20302023 2024 -20% 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 135Befesa Annual Report 2024 Energy intensity based on net revenue Energy intensity per net revenue Comparative N % N / N-1 Total energy consumption per net revenue for activities in  Not comparable 1,13 ND Befesa has considered all of its activities to be included in the high climate impact sectors, since all of them could be included fi (note 5 and 22.1). E1-6 Emissions Retrospective Milestones and target years 2021 (Base year) 2023 2024 Comparative % 2024/ 2023 2025 2030 2050 Annual % target/ 2021 Scope 1 GHG emissions 1,176.000 1,340.000 122.226 36.6% Gross Scope 1 GHG emissions (tCOeq) 695,329.03 879,000.00 841,050.18 -37,949. 82 95.68% Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%) ND ND ND ND ND Scope 2 GHG emissions Gross location-based Scope 2 GHG emissions (tCOeq) 102,494.70 249,000.00 309,258.28 60,258.28 124.20% Gross market-based Scope 2 GHG emissions (tCOeq) ND ND 270,369.91 ND ND Significant Scope 3 GHG emissions Total Gross indirect (Scope 3) GHG emissions (tCOeq) ND 421,000.00 290,669.26 -130,330.70 69.04% 1 Purchased goods and services ND ND 180,685.62 ND ND 3 Fuel and energy-related Activities (not included in Scope1 or Scope 2) ND ND 55,673.28 ND ND 4 Upstream transportation and distribution ND ND 35,669.53 ND ND  ND ND 18,640.83 ND ND Total GHG emissions Total GHG emissions (location-based) (tCOeq) 797,823.73 1,550,000.00 1,44 0,977.71 -109,022.24 92.97% Total GHG emissions (market-based) (tCOeq) ND ND 1,402,089.34 ND ND Environmental continued 136 Befesa Annual Report 2024 All plants apply ISO 14064  GHG Protocol, to select reporting categories. Every year, all sites measure their emissions using emission factors provided by local governments, IPCC, or, if needed, Ecoinvent. Other pollutants are reported in E2-4. Scope 1 Direct emission categories include stationary, process, mobile and fugitive emissions. This includes, for instance, natural gas and coke consumption. The use of coke as a reductant agent is not counted as fuel, but as process emissions. In order to infer the volumes of coke used, plants use either mass  of the materials that go into the processes. Scope 2 This category includes indirect emissions generated by electricity consumption. This year the company is reporting location- and market-based fi Scope 3 Befesa has conducted a thorough assessment of its Scope 3 emissions, engaging external consultants  The assessment process has   fi categories based on materiality  exception of BZ Recytech that became part of Befesa in 2024. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 137Befesa Annual Report 2024 9  fifi 2. Application of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.  fi  industry-average collected data, and thirdly data from databases or standards, such as DEFRA and Ecoinvent 4. Development of internal policies, data collection processes and controls to improve Scope 3 data quality  are various uncertainties associated  measurement. These uncertainties arise from several factors, including: 1. Data Availability: Scope 3 emissions often rely on data   in quality and completeness from location to location. 2. Materiality of categories might vary depending on a location. 3. Estimation Methodologies: Where direct data is unavailable, estimations based on emission factors and other proxies are used. Befesa carried out a materiality assessment conducted by experts on key representative locations from every sub-business unit at Befesa to gain a better understanding and obtain a methodology to calculate the scope 3 emissions by type of  based on real scope 3 data as  most material categories for each business segment. Every location  materiality analysis based on fi  materiality analysis. 4. Value Chain Complexity: Befesa's value chain is complex, involving a large number of suppliers and customers across  challenging to obtain precise data for all activities.  updates its estimation methodologies fi  all its locations. At the same time  supplier engagement to obtain more accurate and consistent data in the future for the material categories. Befesa aims to improve the quality of Scope 3 measurement in future reporting years. Timeline for Improvements: On ff to enhance the data consolidation methodology and its coverage for all relevant locations by 2026, and report on the progress in its next reporting cycle. Environmental continued 138 Befesa Annual Report 2024 The materiality criteria for Scope 3  y Magnitude of emissions: this criterion refers to the volume of emissions from the emission source compared to the total indirect emissions. y fl fl can have in reducing emissions from the emission source through policies or support to third parties. y Data availability and traceability: this criterion refers to the degree of quality of the data through its direct or indirect collection and the ability to access and retain evidence. Emissions are calculated using primary  y Using economic data as primary data: The plant estimates the emissions for each potential source  GHG Emissions (t COe) = Source Value (€) x Emission Factor (t CO y Not using economic data as primary data: For these cases, the corporate procedure provides calculation methods that can be used. If not  GHG Protocol’s guidance and apply calculation methods depending on the available primary data: GHG Emissions (t COe) = Source Value (unit) x Emission Factor (t CO The material categories for scope 3  y 1. Purchase goods and services y 3. Fuel and energy-related activities (not included in scopes 1 and 2) y 4. Upstream transportation and distribution y  Intensity per net revenue GHG intensity per net revenue 2023 2024 % 2024/2023 Total GHG emissions (location-based) per net revenue (tCO 1,31 1,16 88,58% Total GHG emissions (market-based) per net revenue (tCO ND 1,13 ND 9 The net revenue found in the denominator can be found in the consolidated income statement under revenue or sales. The net fi (1.239 million euros) can be found in the company’s income statement (note 5 and 22.1). E1-7 Carbon credits Befesa does not take part in any accredited GHG removal schemes. The company’s Net Zero target is in    ff fi fi fi for more detail. E1-8 Internal carbon pricing Currently Befesa does not apply internal carbon pricing. During 2025,  implementing this system in its recycling sites to promote carbon reduction initiatives. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 139Befesa Annual Report 2024 E2 – Pollution E5 – Resource Use and Circular Economy ESRS 2 IRO-1 Processes to identify and assess IROs E2-1 Policies E2-2 Actions and resources E2-3 Targets E2-4 Air pollution ESRS 2 IRO-1 Processes to identify and assess IROs E5 -1 Policies E5-2 Actions and resources E5-3 Targets E5-4 fl E5-5 fl E2 – Pollution ESRS 2 IRO-1 Description of the processes to identify and assess material pollution-related impacts, risks and opportunities Emissions from recycling processes, transportation, and energy use at Befesa’s 24 sites can contribute to air ff public health. These emissions are  steel dust, stainless-steel dust, oxide, fi & SPL, and secondary aluminium production. To identify and assess impacts, risks, and opportunities related to pollution, a Double Materiality analysis has been carried out. Since none of the company’s plants are located in protected areas or zones vulnerable  Double Materiality Analysis established  material to Befesa (see ESRS 2 IRO-1 and SBM-3). Air pollution is the material sub-theme of this section. With increasing environmental concerns and regulation, there is a risk that the reporting demand increases in the future. Befesa is committed to  guidelines to meet local regulations and  fi material and the associated policies. Environmental continued 140 Befesa Annual Report 2024 Impacts, Risks and Opportunities (IRO) associated with pollution Type Description Related policies and procedures Own operations/Value chain Positive Impact Reduction of air and noise pollution through fi implemented in the sites. – Environmental, health & safety and quality policy  Negative Impact Impact on employee health due to the  a range of respiratory health issues. – Environmental, health & safety and quality policy  Impact on the surrounding community from the air pollution of Befesa’s operations that can cause concern for public health, decreased quality of life and discontent  matters. – Environmental, health & safety and quality policy  Damage of the ozone layer due to direct emissions originating through the use of coke in the production process. – Environmental, health & safety and quality policy  Opportunities   demonstrates Befesa’s commitment to  business practices. This can enhance Befesa’s reputation among customers, investors and the community, attracting environmentally conscious stakeholders  – Environmental, health & safety and quality policy  Risk Increase in sanctions imposed as a result  fi conditions in environmental authorizations. – Environmental, health & safety and quality policy  Lack of anticipation of future legislation regarding air particles. Legislation is expected to get more and more restrictive and Befesa should adapt by cutting emissions and air particles. – Environmental, health & safety and quality policy  Higher investment necessities due to the need to improve facilities to reduce air pollution. – Environmental, health & safety and quality policy  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 141Befesa Annual Report 2024 E2-1 Policies As indicated in E1-2, given the global footprint of Befesa’s recycling plants, the company currently does fi pollution. At a corporate level, Befesa has established the Environmental, Health and Safety and Quality policy,  and third parties and includes Befesa's commitment to the prevention of environmental incidents and emergency situations. Each individual  to ensure legal compliance and to  performance. All ISO 14001-compliant sites have an environmental policy ff  regulation. As part of the environmental policy    applicable regulations. Initiative Outcome Business unit Own Operations /Value chain Location Capex cost Slag cooling fan revision and upgrade Emissions are collected more ffi the chimney Steel dust  and Value Chain Asia <10k Improvement in dust emission collecting in furnace Reduces atmospheric emissions Oxide  Europe <10k Installation of lids for crucible ovens Reduces atmospheric emissions Oxide  Europe <10k Installation of quick-lift door in production building ff dust emissions into the air outside the building Steel dust  Europe <10k Installation of air particle collector ff Steel dust  Europe 10-50k Upgrade of central dedusting system pipeline ff Steel dust  Asia 10-50k Continuous emission monitoring systems (CEMS) analyzer replacement Improve emissions measurement data Steel dust  Asia 10-50k Environmental continued E2-2 Actions and resources Most of the actions described in  the levels of pollution coming from the emissions of CO other pollutants like methane (e.g., the Hydrogas project). At Befesa, each plant manages their pollution actions and targets locally in order to comply  and constantly monitors them to minimise their impact.  circumstances and locations, its activity could have some negative impact on local communities, such as air pollution generated by its facilities. In order to mitigate these impacts, Befesa carries out mitigation actions  relation to 2024. Every year, Befesa carries out several planned actions to improve the pollution levels of its recycling assets.  in 2024, amounting to 4.2M€ . These initiatives are part of the annual budget for regular and compliance maintenance, and it is expressed as capital expenditures (CapEx) invested.  continued in subsequent years, as future developments are evaluated yearly as part of the annual budgeting process and therefore do not form fi investments can be found in the ‘Property, Plant and Equipment’ section in the consolidated statement of fi additions made in 2024 (80.98 M€ ,  regular maintenance CapEx but also expansion CapEx, dedicated to increase the recycling capacity of the company’s sites. 142 Befesa Annual Report 2024 Initiative Outcome Business unit Own Operations /Value chain Location Capex cost Replacement of dust measurement appliance on chimney Improve technology and emissions measurement Steel dust  and Value Chain Europe 10-50k Application of lime dosing and active carbon dryers to purify emissions Remove acids and organic compounds from air emissions Secondary Aluminium  Europe 10-50k fl extractives and non-process elements Control of mercury emissions Steel dust  Europe 10-50k   ff Steel dust  Europe 50 -100k fi gas cleaning system Avoid mercury and dioxin emissions Steel dust  Europe 50-100k Replacement of old seals to reduce trace emissions Reduced trace emissions from seals Steel dust  America 100-500k Installation of an Uninterruptible   ff particulate emissions Steel dust  Europe 100-500k Upgrade of reactors in the feeding pump Curb emission of ammonia Salt slags & SPL  Europe 100-500k Installation of a ball mill Reduces diesel consumption and ff Oxide  Europe 100-500k fi Reduce particulate emissions Steel dust  Europe 100-500k Installation of Regenerative Thermal Oxidizer (RTO) to treat air emissions Reduce CH4 emissions Salt slags & SPL  Europe 2-3M All actions implemented in 2024 are    keep implementing preventative and corrective actions to minimise pollution   The company currently does not have a centralised action plan regarding future    plans in place. Future actions are evaluated yearly as part of the annual budgeting process, allocating capital for those initiatives and prioritising the most critical ones. Lastly, Befesa currently does not  understand their impacts related to  been taken into consideration for the Double Materiality analysis. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 143Befesa Annual Report 2024 Environmental continued 28. Pollutant in air kg ( 2024) Methane (CH) 1.161.179,33 Carbon monoxide (CO) 921.807,15 Ammonia (NH) 27. 851,15 Non-methane volatile organic compounds (NMVOC) 117.801, 99 Nitrogen oxides (NO, NO) 532.225,12 Sulphur oxides (SO, SO) 282.987,10 Chromium and compounds (as Cr) 164,12 Mercury and compounds (as Hg) 307,87 Nickel and compounds (as Ni) 131,40 Lead and compounds (as Pb) 919,55 Zinc and compounds (as Zn) 38.872,98 Benzene 2.344,94 Particulate matter (PM) 12.162,01 E2-3 Targets Befesa has established targets related to its COe emissions (see E1-4 and ESRS 2 IRO-1). Although fi targets for air pollutants other than CO at a company level, it monitors the air pollutant reduction initiatives carried out at plant level, as reported  fi  E2-4 Air pollution As indicated in E1 IRO-1, Befesa measures, monitors and tracks  local and third-party regulatory bodies to report and limit them. Until this year, plants have reported polluting gases individually on a plant-by-plant basis  In previous years, the company only reported COe, SOx and NOx on a consolidated basis at corporate fi fi pollutants that have exceeded 100 kg during the year that plants have been reporting internally. Pollutant gases are measured through specialised equipment, either through Continuous Emissions Measurement Systems (CEMS) or through accredited external control companies that perform periodic measurements according to local requirements. Once the data is available at a plant level, it is then consolidated by the EHS team and fi or other environmental management fi fi plant level according to the applicable legal requirements. fi reported pollutants centrally, so it is not able to report on changes and ff   audits and regulation. 144 Befesa Annual Report 2024 E5 – Resource Use and Circular Economy ESRS 2 IRO-1 Processes to identify and assess IROs Befesa's recycling processes reduce the dependency on primary resources  by the recycling technology used as of today, the company also faces challenges such as high reductant agent consumption. To mitigate these, Befesa is investing in R&D and advanced technologies, securing reliable material supplies, Impacts, Risks and Opportunities (IRO) associated with Resources inflows including resource use Type Description Related policies and procedures Own operations/Value chain Positive Impact fi by using the scrap generated by other manufacturers – Environmental, health & safety and quality policy  operations Optimisation of recyclability of materials enables the utilisation of materials in almost ffi dedicated to recycling – Environmental, health & safety and quality policy  operations Preservation of natural resources and reduction of need for virgin material extraction by reclaiming valuable material  ffi – Environmental, health & safety and quality policy  operations Long-term resilience by embracing circular economy principles through diversifying  fi – Environmental, health & safety and quality policy Value chain Negative Impact Greater emissions due to a purchase of high emissions materials – Environmental, health & safety and quality policy  Opportunity Leadership in the emerging market of sustainable mining through a marketing strategy that attracts investment to a sector previously isolated due to a lack of sustainability – Environmental, health & safety and quality policy Value chain Cost savings by using remnants generated in previous production processes – Environmental, health & safety and quality policy Value chain and leveraging circular economy principles to enhance sustainability ff explained in section E5-4 of this chapter. fi risks and opportunities for the material sub-themes related to resource use  obtained through the Double Materiality process detailed in sections SBM-2, SBM-3 and IRO-1 (see chapter ESRS 2 General Information). For this analysis, carried out at corporate level, all the plants operated by Befesa in all its geographies have been taken into account and stakeholders have been consulted. As a result of this analysis, resource fl fi as the material sub-themes. Details fi  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 145Befesa Annual Report 2024 Environmental continued Impacts, Risks and Opportunities (IRO) associated with Resources inflows including resource use Type Description Related policies and procedures Own operations/Value chain Risk Reputational risk due to the lack of control   ff – Environmental, health & safety and quality policy  Loss of stakeholder trust because of poor resource management practices that may ff production plant – Environmental, health & safety and quality policy  ffi to optimise the production process, resulting  and natural resources – Environmental, health & safety and quality policy  ffi materials as suppliers start recycling and  – Environmental, health & safety and quality policy  Reputational harm due to a lack of monitoring the origin of materials of the value chain,  fl rights issues – Environmental, health & safety and quality policy Value chain Impacts, Risks and Opportunities (IRO) associated with Waste management and Resource outflows for waste Type Description Related policies and procedures Own operations/Value chain Positive Impact Conservation of natural resources such    – Environmental, health & safety and quality policy  operations   ffl treatment technologies to reduce the environmental impact. – Environmental, health & safety and quality policy  Preservation of land for agriculture, conservation and recreational purposes by  fi – Environmental, health & safety and quality policy  Negative Impact  received input is recycled, so Befesa ends  by other companies. – Environmental, health & safety and quality policy  operations 146 Befesa Annual Report 2024 The primary materials used at Befesa  for recycling, such as steel dust, aluminium scrap, salt slags, etc.     fl The material impacts and risks of staying in business as usual are not  fi legal action, and reputational damage. E5-1 Policies The company currently does not have fi  fi  resources, including the relative increase in the use of secondary  fi  management at corporate level in the  level, Befesa has established, at a corporate level, Befesa has established the Environment, Health, Safety & Quality Policy Befesa employees and third parties, and encompasses all of Befesa’s operations. This policy includes Befesa's commitment to the prevention of environmental incidents and emergency situations and the commitment to minimise its resource use and maximise circularity. Each individual Befesa plant can create its   environmental performance. For instance, all ISO 14001-compliant sites have an environmental policy that consider their resource use and  Impacts, Risks and Opportunities (IRO) associated with Waste management and Resource outflows for waste Type Description Related policies and procedures Own operations/Value chain Negative Impact     – Environmental, health & safety and quality policy   or stored to be properly deposited in the fi  in all of Befesa’s plants. – Environmental, health & safety and quality policy   also be quite hazardous, due to a lack of adherence to rigorous procedures such as established global standards. – Environmental, health & safety and quality policy  Opportunity fi of the production process. – Environmental, health & safety and quality policy  operations Improvement in reputation by advertising  by other companies, thus avoiding fi – Environmental, health & safety and quality policy  Risk Economic sanctions resulting   – Environmental, health & safety and quality policy  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 147Befesa Annual Report 2024 Environmental continued Certifications by plant Site Country Type Capacity (kt) EMAS ISO 14001 ISO 50001 ISO 9001 ISO 450001/ OHSAS 18001 ISO 14064 Steel Dust Duisburg Germany Crude steel 87 Freiberg Germany Crude steel 194 OHRIS (German system similar to OHSAS) Asua – Erandio Spain Crude steel 160 Fouquieres-les-Lens France Crude steel 55 Iskenderun Turkey Crude steel 110 Gyeongju South Korea Crude steel 220 Changzhou China Crude steel dust 110 Xuchang China Crude steel dust 110  US Crude steel dust 165  US Crude steel dust 147 Calumet, IL US Crude steel dust 142 Palmerton, PA US Crude steel dust 163 Gravelines France Stainless steel dust 110 Landskrona  Stainless steel dust 64  Spain Oxide 16 Gravelines France  100 Pohang South Korea  60 Rutherford County, NC US fi 141 Aluminium Lünen Germany Salt slags & SPL 170 Hanover Germany Salt slags & SPL 130 Valladolid Spain Salt slags & SPL 150 Bernburg Germany Secondary Aluinium 75 Erandio Spain Secondary Aluinium 64 Les Franqueses de Valles Spain Secondary Aluinium 66 fi ISO 140001: standard for environmental management systems. ISO 50001: standard for energy management systems. ISO 45001: standard for quality management systems. OHSAS 18001: Standard for occupational safety management systems. Recytech is out of the scope and it is not included in any calculation or percentage. 148 Befesa Annual Report 2024 As part of its environmental policy  it manages the use of resources and   E5-2 Actions and resources Befesa has diverse initiatives in place to make the use of resources more ffi optimisation process is aimed to reduce the use of coke by up to 40%. This contributes to both the resource use and carbon emissions reduction (see E1-1).   be continued in subsequent years, as future developments are evaluated yearly as part of the annual budgeting process and therefore do not form fi The material actions taken this year amounted to 170 thousand euros. They are part of the ‘Property, Plant and Equipment’ assets in the fi position, under the additions made  includes not only regular maintenance E5-3 Targets Resource inflows & outflows Befesa has set three voluntary targets fl flfi increase of primary material input to recycle and the output of recycled product. By 2025, the company aims to recycle more than 2.4 million tonnes of   to more than 1.8 million tonnes. This plan  ff The main actions taken in 2024 Initiative Outcome Business unit Value chain Location CapEx cost Replacement of compressed air consumers  Reduced compressed air and energy consumption Steel dust Operations Europe <10k Extension of air lance technology in Waelz kilns to reduce the use of coke Coke use reduction Steel dust Operations America 100-500k CapEx but also expansion CapEx, dedicated to increase the recycling capacity of Befesa’s sites. As part of the target to increase the  materials produced (see E5-3 for more information), the company is aiming to increase the utilisation rates at the sites, especially those located in China and the US. The most notable project is the refurbishment of the Palmerton  furnace to duplicate the capacity.  geographies. These targets are part of the company strategy and are also  to transition to a circular economy to achieve its 2050 climate neutrality target. On the other hand, as stated in its decarbonisation levers (E1-1), Befesa also aims to reduce the use of coke in the US steel dust siters through optimising processes and implementing technologies that minimise the use  production phase. These targets have been set by top management levels. On a monthly basis, plants send their input and output  These are some of the most important environmental KPIs to understand the performance of Befesa, so they are  budget and quarterly performance  against targets by the board of directors. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 149Befesa Annual Report 2024 Environmental continued E5-4 Resource inflows  scrap, salt slags, etc.) and the materials needed to process them (lime, coke, salts, etc.).  Raw materials 31(a)TON 31(c) Ton Resource inflow recycled 31(c) % Resource inflow recycled Waste containing Aluminium 239,027.37 239,027.37 8.39% Alloying agents (Si, Mg, Mn, Fe, Zn, Cu) 9,496.49 449.13 0.02% Smelting salt 28,984.94 28,984.94 1.02% Liquid oxygen 28 ,357.14 – – Salt Slag 414,861.56 414,861.56 14.57%  11,416.12 11,416 .12 0.40% sulphuric acid 71,451.35 9,704.60 0.40% Steel dust & zinc residues 1,252,498.74 1,252,498.74 43.98% Metallurgical coke 177,729.67 1,148.81 0.04% Petrol Coke 37,386.03 36,196.73 1.27% Anthracite 8,551.92 – – Sodic Bicarbonate 4,819.26 – – Lime 10 4,181.40 7,562.0 8 0.27% Target Waste hierarchy Baseline (absolute metrics) Progress (absolute metrics) Next steps  more than 2.4 tonnes by 2025 Recycling 1.8 million tonnes (2022) 2023: 2 million tonnes 2024: 2.3 million tonnes Increasing volumes through higher utilisation at existing plants and starting Palmerton plant (USA) in 2025 Increase the volume of valuable materials recovered from  Recycling 1.5 million tonnes (2022) 2023: 1.7 million tonnes 2024: 1.7 million tonnes Reduce coke use in USA plants by 40% (lever 1) by 2030 Prevention 113 kton (2023) 2024: 90 kton (-20.4%) Keep implementing optimisation strategies such as SDHL air lances fi Environmental Health and Safety and Quality policy mentioned above. 150 Befesa Annual Report 2024 Raw materials 31(a)TON 31(c) Ton Resource inflow recycled 31(c) % Resource inflow recycled Zinc oxide 199,313.00 199,313.00 7.0 0% Rock Salt (sodium chloride) 6,490.00 – – Hydrochloric Acid 33-35% 4,386.00 – – Sodium Hypochlorite 10-20% 2,882.00 – – Manganese Sulphate 1,803.00 – – Hydrated lime (calcium hydroxide) 5,920.00 – – Zinc Dust 386.00 386.00 0.01% Metal & metal dust 86,814.00 86,814.00 3.05% Sand 15,865.00 – – Sugarcane molasses 2,706.00 – – Tackidex 1, 974.00 – –  130,849.26 130,849.26 4.59% Total 2,848 ,150. 25 2,419,212.34 84.94% fle intensity. The rest is recycled material, but not treated, as it is not the plant's purpose. fl  each site on a monthly basis using an internal reporting tool 1 . Estimates are not included. Due to the nature of the company’s operations, duplication   place because some plants produce  divisions. For instance, salt slags are  the secondary aluminium division but as input for the salt slags & SPL ones. See E5-5 for reference. E5-5 Resource outflows  Befesa comes from unsold by-products resulting from the steel and aluminium processes. Each site measures  Waste management is regulated and   ff fi fi  y Hazardous waste: Befesa  categorised as hazardous. fl    used in the recycling process.    recovery. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 151Befesa Annual Report 2024 Environmental continued y Hazardous waste reused/ recovered/recycled: At the end of some recycling operations, the company produces some hazardous residues such as salt slags coming from the secondary  are recycled internally by the salt slags recycling division. y Non-hazardous waste: Includes by-products coming from the recycling process of steel dust  sold in the market and need to be dispossed of in a non-hazardous fi    on the liquids eliminated in solid  recycled internally.  generated by Befesa comes from by-products from the steel dust and salt slags recycling processes in the form of iron oxide (Ferrosita) and  been sold and hence had to be dispossed of as a non-hazardous fi example, in the steel dust business unit,  iron-rich slag. The majority of the  (more than 99% of the total volume) is coming to salt slags from the  is entirely recycled internally.  company, 78% is recycled. Befesa targets to minimize the percentage fi increasing the usage of by-products and secondary materials. Waste Hazardous Ton Non-Hazardous Ton Total Ton % a) Total amount of waste generated 248.476,90 492. 859,13 741.336,03 100% b) the total amount by weight diverted from disposal 185.035,80 372.352,94 557.388,74 75,19% i) Preparation for reuse 26,49 84,51 111,11 0,01% ii) Recycling 184.895,45 327. 314,29 512.209,74 69,09% iii) Other recovery 113,86 44.954,14 45.069,00 6,08% c) the amount by weight directed to disposal by waste treatment type 63.441,10 120.506,19 183.947, 28 24,81% i) Incineration 442,86 304,14 747, 00 0,10 % fi 61.516,85 101.770,94 163.287,79 22,03% iii) Other disposal operations 1.481,39 18.431,11 19.912,50 2,69% Amount and % non-recycled waste 63.441,10 120.583,03 184.024,12 24,82% 1  fi  152 Befesa Annual Report 2024 Maximising circularity in Befesa’s processes Befesa strives to maximise circularity in its processes, diverting 75% of its fl recovery happens internally, and fl fl company maximises circularity and fl fi For instance, in the steel business unit, Waelz oxide produced in steel dust  Oxide Washing plants (e.g., Gravelines). On the other hand, in the aluminium business unit, the salt slags resulting from the melting process are used as fl sent back to the aluminium melting plant (e.g., Valladolid). fi produced in the steel dust sites is treated at the smelter in North Carolina,  metal zinc. There is also a project to send the sludge remaining from treating the Oxide back to the   has been testing in 2024 and Befesa hopes to introduce it in the next year. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 153Befesa Annual Report 2024 Social SBM2, SBM3  S1-1 Policies S1-2 Processes for engaging Befesa employees S1-3 Processes to remediate impact and channels to raise concerns S1-4 Actions to mitigate risks and pursuing opportunities S1-5 Targets S1-6 Befesa employee metrics S1-7  S1-8 Collective bargaining and social dialogue S1-9, S1-12 Diversity, equity and inclusion S1-10, S1-11, S1-15, S1-16  S1-13 Training and development S1-14 Health and safety metrics S1-17 Discrimination incidents and human rights violations SBM2, SBM3 Own workforce IROs Befesa recognises the importance of engaging its stakeholders, as their involvement is crucial to the company's success. Employees are key stakeholders of Befesa. They are the core of the company’s activity, and   to meet the challenges ahead. As a result of the Double Materiality Analysis conducted by the company in 2024, three social material topics have fi health and safety, and equal treatment and opportunities for all. (See ESRS 2 IRO-1, SBM2 and SBM3) For each of  fi material impacts, risks, and  154 Befesa Annual Report 2024 Impacts, Risks and Opportunities (IRO) associated with Working conditions Type Description Related policies and procedures Own operations/Value chain Positive Impact Fair and stable employment conditions  also addressing the needs and interests  for labour relations, such as collective agreements. –  – Human Resources Policy – Collective agreements Increased employee retention and higher fffl  –  – Human Resources Policy – Collective agreements Negative Impact Potential operational impact by reducing  of absenteeism in some locations –  – Integrated Safety, Health, Environment and Quality Policy – Human Resources Policy – Collective agreements Opportunity Greater commitment to tasks and fi  the Company’s culture and values. –  – Code of Conduct – Human Resources Policy Risk Loss of personal information of employees and stakeholders due to a cyberattack through online scamming –  – Corporate IT Security Policy Wage devaluation of employees due to high fl unleashing in strikes –  – Human Resources Policy – Collective agreements Impacts, Risks and Opportunities (IRO) associated with Health and Safety Type Description Related policies and procedures Own operations/Value chain Positive Impact  investments to implement safety measures and carrying out risk assessments of all plants, increasing the satisfaction of the employees –  – Integrated Safety, Health, Environment and Quality Policy Negative Impact  health and safety due to having to perform  outside the scope of application of the International Standard ISO 45001 –  – Integrated Safety, Health, Environment and Quality Policy Opportunity  inclusion of physical activities and emotional fi to greater productivity, job satisfaction and employee retention –  – Integrated Safety, Health, Environment and Quality Policy 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 155Befesa Annual Report 2024 Impacts, Risks and Opportunities (IRO) associated with Health and Safety Type Description Related policies and procedures Own operations/Value chain Risk  fi Company, including injury compensation, medical treatment expenses, and grounds for  –  – Corporate IT Security Policy Development of occupational diseases over  can have a negative economic impact over   health and safety –  – Human Resources Policy – Collective agreements Losing employees and hiring shortages at plants that have recently experienced accidents, leading to a decrease in productivity –  – Integrated Safety, Health, Environment and Quality Policy Impacts, Risks and Opportunities (IRO) associated with Equal treatment and opportunities for all Type Description Related policies and procedures Own operations/Value chain Positive Impact Promotion of diversity through recruitment and talent management practices, training and development of opportunities to cultivate a culture of inclusivity, and carry out campaigns on equality and diversity –  – Code of Conduct – Human Resources Policy – Diversity, Equity and Inclusion Policy Increase of gender diversity in senior management by increasing the percentage  – Code of Conduct – Human Resources Policy – Diversity, Equity and Inclusion Policy Negative Impact  fi –  – Code of Conduct – Human Resources Policy – Diversity, Equity and Inclusion Policy – Human Rights Policy Sector historically dominated by men,  and industry more broadly. –  – Code of Conduct – Human Resources Policy – Diversity, Equity and Inclusion Policy Social continued 156 Befesa Annual Report 2024 Impacts, Risks and Opportunities (IRO) associated with Equal treatment and opportunities for all Type Description Related policies and procedures Own operations/Value chain Opportunity Commitment to equality can generate a better reputation and a stronger brand,  customers by demonstrating a commitment to shared social and ethical values –  – Code of Conduct – Human Resources Policy – Diversity, Equity and Inclusion Policy Risk  Equity and Inclusion policy can cause fl  environment –  – Code of Conduct – Human Resources Policy – Diversity, Equity and Inclusion Policy – Human Rights Policy  and come directly from both Befesa's business model and the idiosyncrasies of the sector and the countries in  impacts and opportunities come fi out on an annual basis in Befesa's  sections of this chapter). Of the risks and opportunities mentioned above, none have fi material impacts. ff fi ff including White Collars and Blue Collars. All impacts apply to all  fi group, e.g. for health & safety issues, flff be more vulnerable. Non-salaried employees have also been considered fi fi  found during this chapter. All the impacts detected come from fi out continuously during its activity,  and implementation of policies, training fi ff kinds. These actions and initiatives can be seen in more detail in the section Actions to mitigate risks and pursuing opportunities of this chapter. No impacts, risks or opportunities  transition or other environment-related fi as of today. As indicated in the  identifying physical risks related to climate change, and therefore, those  and the actions to be considered  fi as having a risk of forced labour or child labour. S1-1 Policies Befesa is committed to achieve a safe,  all its employees, and that human rights are respected and upheld throughout its operations. The company has established various policies: y Code of Conduct y Human Resources Policy y Diversity, Equity and Inclusion Policy y Human Rights Remediation Policy y Integrated Environment, Health, Safety & Quality Policy y Workshop Agreements  and codes and the material impacts, risks and opportunities obtained from the analysis of Double Materiality has   details of the policies and codes can  Code of conduct Befesa’s Code of Conduct applies to all employees, encouraging a culture of respect, inclusivity, and integrity. Befesa expects its team members to embrace diverse values, respect individuality, uphold privacy, and prevent any form of human rights  ethnic background, culture, religion, age, disability, race, gender identity, 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 157Befesa Annual Report 2024 Social continued political opinion, national extraction, social origin, or any other characteristic. Befesa's Code of Conduct, among  Principles on Business and Human Rights, the Universal Declaration of   Labour Organisation’s Declaration on Fundamental Principles and Rights at Work and its core conventions. The Code of Conduct provides the  ffi fi  company and in relation to its business partners and the general public. It also fl pursued by Befesa, including in    The Code of Conduct also sets out ff any interested party can express complaints. These expectations extend beyond its organisation to its business partners,  Supplier Code of Conduct. The Code of Conduct has been approved by the Befesa board, and the rest of the policies have been approved by the Chairman and the CEO of Befesa. The HR Director and the ffi fi  analysing any potential breaches. The Code of Conduct is published on  visibility. The Code of Conduct is provided  are conducted, and an annual online training is carried out to ensure updates are thoroughly communicated. In addition to the Code of Conduct, the other aforementioned policies are accessible on the intranet. During 2024, the company developed an onboarding training programme that not only explains Befesa’ s principles  to Befesa’ s commitments regarding  these documents can be explicitly found. For further information please refer to Business Conduct chapter. Human Resources Policy  standards, Befesa’s Human Resources Department, through its Human Resources Policy, is dedicated to upholding the principles outlined in the Human Rights Act and the Befesa Code of Conduct. This commitment is integrated in all HR processes, from recruitment to promotion and career development. Befesa seeks that all practices are fair, respectful, and  rights standards. The policy places particular focus  is most likely to arise, including recruitment, retrenchment, promotion,   hours, and health and safety Human Rights Remediation Policy Befesa is committed to protecting and promoting human rights in all its operations. This commitment is embedded in Befesa's Code of Conduct and its Human Rights Remediation Policy, both strictly prohibiting any form of forced labour, ffi and child labour, among others. With a commitment to respecting internationally recognised human  responsible for its implementation and oversight, the policy not only establishes clear procedures for addressing instances of non- compliance but also provides various remediation options, tailored to the nature and severity of each issue. This policy applies to all Befesa   performing services at Befesa assets. Befesa does not tolerate any form of discrimination based on racial or ethnic origin, colour, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national extraction, social origin, or any other grounds.  implemented for reporting potential discrimination situations, including harassment, and as previously mentioned a Human Rights Remediation Policy is in place to address any violations of these rights. For more information regarding the remediation actions taking in place, please refer to the section on this report Processes to remediate impact and channels to raise concerns. Diversity, Equity and Inclusion Policy Befesa's Diversity, Equity, and Inclusion (DEI) policy plays a vital role in shaping recruitment processes, employee training, and promotion opportunities. This policy seeks that fairness and inclusivity are integrated into every 158 Befesa Annual Report 2024 stage of an employee's journey, from   can thrive. To truly embrace diversity, it is essential that Befesa employees are not only respectful but also genuinely   launched by the company in recent   initiatives and ongoing training in this  values and embraces diversity. Integrated Safety, Health, Environment and Quality Policy At Befesa, safety is not just a priority but a fundamental value integral to its business operations. Befesa is dedicated to the continuous enhancement of health and safety  Befesa's safety management systems  employees, non-employees and contractors. These systems are  standards, including ISO 45001and OSHAS, in addition to Befesa’s Corporate Safety Standards. All Befesa's European locations are fi   legal requirements, and all its locations  corporate standards. To ensure compliance and the implementation of the corporate standards, all its locations are also audited internally by the corporate team every 3 years. Workshop agreements   considered as policies, as they contain measures that directly impact the IROs (Impacts, Risks, and Opportunities) fi assessment.  range of important topics, including  shift systems, holidays, employee fi protocols, among others. All of these elements contribute to fostering  S1-2 Processes for engaging Befesa employees In Befesa, there are mechanisms in place to foster and promote employee engagement, these mechanisms are  they belong to a vulnerable group or  1. Informative: Befesa aims to keep employees   updates are regularly shared through the company intranet and notice boards at each plant. The intranet ff  safety protocols, HR policies, and  The IT department tracks intranet visits and analyses the most visited sections to identify topics of greatest interest to Befesa employees and  make use of this information system. 2. Consultative:  legal representatives of employees, such as the Works Council and trade unions, to discuss topics such as impact employee engagement. Additionally, Health & Safety (H&S) Committees, composed of company and safety representatives, addresses safety concerns. The frequency of the meetings may vary depending on the topic under discussion. The most common frequency is monthly, (peg Health& Safety meetings) but if there is no fi are held at least quarterly. Psychosocial surveys are also fi circumstances, such as changes  concerns, or employee requests. At Befesa, these surveys are generally conducted every three  they may be carried out annually.  in the negotiation process and the implementation of measures resulting from these discussions or surveys. This try to ensure that any commitments made are properly 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 159Befesa Annual Report 2024   councils are authorised to sign agreements independently, they keep employees informed about the status of negotiations through informative meetings. In some regions, they even ff by conducting votes in assemblies. Collective agreements address issues that are important to Befesa  them as a valuable tool for measuring ff engagement channel. 3. Participative: Befesa has established employee ff initiatives. For example, suggestion boxes are installed at all plants,    opportunities for feedback and discussions about professional development. Befesa also conducts psychosocial surveys, inviting employees to express their opinions  training, and manager relations. Other participate initiatives to promote corporate culture and to enable employees to actively communicate ff include the charity contest and the  employees can submit a social or environmental project they feel connected to. The top three charity   further fostering engagement and involvement in social and environmental causes. ff initiatives is generally measured by the number of participants in each initiative, the voter turnout in related decisions, and the feedback received fi The above-described mechanisms are available to all Befesa employees throughout their professional journey  frequencies depending on the nature of the topic addressed. In addition to the channels mentioned  fi   legal representatives and HR employees. These serve as the primary communication channels for all Befesa employees, particularly  express their concerns. One of the key goals of the Befesa HR community is to foster an equitable  achieved by caring for employees,  and addressing any special needs they may have. All the measures taken by Befesa to support climate change mitigation do   S1-3 Processes to remediate impact and channels to raise concerns Channels to raise concerns As the Code of Conduct indicates,  she has been, or is being subjected to  behaviour or harassment could  Channel. Any such complaints are promptly investigated. If the investigation substantiates the discrimination, abusive behaviour or harassment, immediate corrective  complaining in good faith shall not be reprimanded or adversely treated because of having made the complaint.  anonymous, and available among Befesa employees and other interested parties. Through it, fi concerns about unfair or potentially Social continued 160 Befesa Annual Report 2024  All complaints received through the  results of their investigations, are subsequently presented to Befesa’s Board of Directors. Detailed information about this tool can be found in section G1-1 (Corporate culture and Business conduct policies and G1-3 Prevention and detection of corruption or bribery).  the only mechanism available to employees for submitting complaints: y Most of the collective bargaining ff fi procedure for handling potential human rights violations y To better understand any fi  considered vulnerable, employees can express their concerns to the  Human Resources employees, their relevant Supervisor and the ffi S1-4 Actions to mitigate risks and pursuing opportunities Regarding the negative impacts fi Materiality analysis, Befesa has implemented actions to prevent and mitigate their materialisation. These actions contribute to the development and reinforcement of key policies, including the Code of Conduct, the Diversity, Equity, and Inclusion Policy, the Human Resources Policy, the Integrated Safety, Health, Environmental & Quality Policy, and the Safety Corporate Standards. Befesa develops various initiatives, most of them carried out in   established for each sub-theme fi y Processes implemented in relation to working conditions, fi impact of absenteeism: – Absence Analysis: A plant- fi typologies (long-term, short- term, and other leaves) to identify trends and address underlying causes. – Absence Talks & Operational Integration Management: In some plants, for example those found in Germany, have implemented structured discussions and reintegration processes to support employees  absences, – Restricted Work Opportunities:   facilitate employees' return to duty. – Flexible Work Arrangements: fffl manufacturing employees and  fl  feasible based on the role). y Processes implemented in relation to working conditions, fi fl  – Social Dialogue: In countries  flfi  salary agreements have been reached through negotiations  y Processes implemented in relation health and safety: – Ergonomic Campaigns & Training:  initiatives and training programmes. – Health & Safety Committees:  representatives in Health & Safety committees to ensure  environment. – Health & Safety risk reduction programmes: Befesa has also instituted targeted risk reduction programmes, such as the Fatal and Serious Injuries Prevention ffi initiatives, and Hand Injuries Prevention measures. – Psychological Surveys: Psychosocial surveys must fi circumstances, such as changes  related concerns, or employee requests. At Befesa, these surveys are generally conducted  some locations, they may be carried out annually. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 161Befesa Annual Report 2024 y Processes implemented in relation to equal treatment and opportunities for all, in particular inclusion of people with disabilities: – Awareness Campaigns & Training: Befesa annually  and training course and the Purposeful Inclusion to promote the integration of employees  – Support for Autism Research:  sponsorship of the Autism Chair at the University of Seville, supporting all initiatives promoted by the institution. – Participation in Inclusive Sports & Advocacy: As part of its commitment to inclusion, Befesa has once again participated in the Copa del Rey  fi Paralympic athlete to compete as a skipper. Additionally, Befesa sponsored the Death Valley  the president of the NGO Dale ff by ALS, and his friends cycled 565 km across Death Valley over seven days. Their journey  the importance of supporting ff  ALS research line in Bilbao. y Processes implemented in relation to equal treatment and opportunities for all, in  attraction of female talent. – Job advertisements using neutral wording to ensure that no candidate self-excludes from the process for any reason  required technical skills. – All résumés from female candidates are carefully  the technical requirements  fi candidates are being taken into  same technical capabilities – Befesa requires headhunter agencies and temporary ffi recruitment processes to strictly  policies, ensuring fair and equal opportunities for all candidates. – Increasing company visibility at job fairs and technical universities to attract diverse talent and participating in various employment fairs,  can be performed equally by individuals of any gender. Furthermore, Befesa has designed and implemented a series of measures to mitigate risks and take advantage of    Working conditions Action Period Resources Scope  Operations and Culture  Corporate HR&CSR department  Step Challenge Initiative 2024-2025 Corporate HR&CSR department All Befesa employees   Corporate IT department  roughly 800 employees fi Social continued 162 Befesa Annual Report 2024 Initiatives regarding Befesa’s Operations and Culture Befesa remains committed to strengthening its culture and     ff Befesa, the training highlights the company’s core values, including its commitment to Diversity, Equity, and Inclusion (DEI).  joiners understand Befesa’s mission, ethical standards, and key policies from the start, and to generate a sense    In 2024, Befesa carried out various global initiatives to create a positive  the Step Challenge – a health,  initiative. More than 550 participants from across the Befesa community took part in this challenge, promoting  building and friendly competition. Together, they covered in just one month, the equivalent of circling the  highest average number of steps    breakfast for all employees. The communication department publishes a quarterly Befesa Newsletter Business, R&D, H&S, Environmental, and Social Activities involving Befesa  email and posted on the Befesa   an email address. Cybersecurity awareness Programme The Befesa IT Corporate department maintains an annual cybersecurity programme. The program is based on a previous assessment conducted      This proactive approach underscores Befesa’s commitment to cultivating a cybersecurity-conscious culture,  frontline defender against potential threats. As a consequence, the       Snaps Series: Social Media Health and safety Actions Action Period Resources Scope Fatality prevention program  H&S department All Befesa employees   H&S department All Befesa employees Corporate Safety Standards  H&S department All Befesa employees Corporate safety Initiatives to reduce fi ffi  H&S depart All Befesa employees  fi 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 163Befesa Annual Report 2024 Fatal & serious injuries prevention: The fatal & serious injuries (FSI) prevention programme, aims to: y Increase the focus on the higher  y Extend the scope of risk fi tasks, places and operations, e.g.  y Give visibility to those risks at all levels of the organisation, from fl  y Allocate the appropriate time and fi  y Ensure that robust controls are in place, and that those controls are fi Befesa Safety Excellence Awards 2024 y Every year Befesa recognises the achievement of Befesa employees and locations that contribute to  Safety Excellence Award: y  the exceptional safety improvement and Zero lost time injuries. y  their safety projects. Traffic safety & Hand injuries prevention:   risks at Befesa.  equipment’s for material and people    and pedestrians, and implement robust controls to prevent accidents, such as segregation, blind spots elimination, ff procedures and trainings to reduce these risks. In almost all Befesa's locations, it transports materials internally using conveyor belts, there are many risks inherent to these equipment’s such as nip points, electric hazards and falling materials. The project aimed to identify all these risks on the conveyor belts and implemented action plans to get robust controls in place. Social continued Equal treatment and opportunities Actions Action Period Resources Scope Training on Code of Conduct  Compliance department  roughly 800 employees   Compliance department  roughly 800 employees     HR team All Befesa employees  Equity and Inclusion  Corporate HR department All Befesa employees Diversity, Equity and Inclusion Training  Corporate HR&CSR department  roughly 800 employees  Chair Sponsorship 2024-2025 Corporate HR&CSR department  Autism Spectrum  (In Foundation) sponsorship 2024-2025 Corporate HR&CSR department    fi 164 Befesa Annual Report 2024 Compliance Management System and Diversity, Equity and Inclusion actions During 2024, Befesa has been developing actions to minimise the  of Conduct requirements in general,  prevention in particular. All the compliance-related actions and their content and scope are detailed in G1-3: Prevention and Detection of Corruption or Bribery. Other actions related to Diversity, Equity, and Inclusion are led by the Corporate HR & CSR Department  including Non-Discrimination, Cultural  Day, and the International Day of  DEI training covers topics such as Microaggressions, Age-Based Diversity, Purposeful Inclusion, and Overcoming Unconscious Bias. On Cultural Diversity Day, a video highlighting the company’s  on the intranet and posted on plant notice boards, featuring a QR code for  previous years, Befesa also published its Intercultural Calendar at the fl ffff locations to help avoid scheduling  certain regions. ff ff fi  although only in this report data of ffi fi Befesa understands that normalising   In this spirit, and in honour of the International Day of People with Disabilities, Befesa organised an online workshop, open to all employees. The session focused on sleep hygiene psychologist and expert from an NGO specialising in the labour integration of     manage sleep-related challenges. Befesa also joined the 2024 World Autism Awareness Day by participating in the Light It Up Blue campaign, initiated by Autism Speaks. This global initiative encourages individuals, organisations, and landmarks to illuminate their buildings in blue to symbolise support for  understanding and acceptance of   the cause.   needs to be comprehensive and sponsors various activities that, fi gain employment opportunities and access adapted sports. In this regard, Befesa has introduced several online training programmes in 2024, covering topics such as Microaggressions, Age-Based Diversity, Purposeful Inclusion, and Overcoming Unconscious Bias.  and training on disability-related topics, Befesa has continued sponsoring the Autism Chair at Seville University throughout 2024, supporting various initiatives that help university students on the autism spectrum gain full access to the labour market. S1-5 Targets Equity, Diversity, and Inclusion As described in Disclosure Requirement S1-4 Befesa implemented various actions in 2024 linked to its strategic goals on  by the Befesa Chairman and CEO, approved in the HR & CSR Committee, and later communicated to the regional CEOs during the Health & Safety, Human Resources, and Corporate Social Responsibility committees. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 165Befesa Annual Report 2024 I RO´s Initiative Target Scope 2024 2025 2026 Protect the company against Potential Cyberattack Cybersecurity training Ensure Bimonthly Training  email address roughly 800 employees Done Bimonthly Training Bimonthly Training Measures against potential non-  code of conduct Code of Conduct Training  Training  email address roughly 800 employees Done   Measure to prevent non-compliance of DEI Policies and topics DEI  Campaigns Launch 4 Campaigns  email address roughly 800 employees Done 5 Campaigns to all Befesa employees 6 Campaigns to all Befesa employees Measure to prevent non-compliance of DEI Policies and topics DEI Training Ensure Quarterly Training  email address roughly 800 employees Done Quarterly Training Quarterly Training Measures to reduce Absenteeism Step Challenge initiative Achieve 75M Steps All Befesa employees Done Positive feedback,  planned for 2025  planned for 2026 Measures to reduce Absenteeism Wings for Life race 700 hundred Kilometres All Befesa employees Done Positive feedback,  planned for 2025 Health and safety objectives: Befesa based its safety strategy on  y Progressively achieve the excellence in the safety management systems. y Identify and control the process safety risks y Promote the safety culture at all the levels of the organisation. Befesa has established the goal of achieving zero fatalities, achieved in 2024, and progressively reducing the accident rates (for more information see section S1-14). To attain this goal, Befesa has implemented several programmes, as outlined in sections S1-3. These programmes are  leading indicators, among others: y  the fatality prevention programme:  (Achieved) y  corporate standards: The objective  y  fi corporate audits: The objective for  These leading indicators are evaluated  conducted every three years, and  annually. These audits involve a  all corporate safety standards. The objectives are established during the annual health and safety strategic  participate in formulating BEFESA’s  from the locations are summarised and sent back as the annual strategy for fi The strategic goals are also presented for approval at the Regional CEO’s health and safety committee, led by Befesa's CEO and the board of Befesa. Once approved, the strategy and objectives are incorporated into the action plans of each location and monitored at the corporate level  meetings and location audits. Social continued 166 Befesa Annual Report 2024 S1-6 Befesa employee metrics Country Number of employees (headcount) 31 Dec 2023 Number of employees (headcount) 31 Dec 2024 HC difference FTE 31 Dec 2024 2024 distribution South Korea 71 75 6% 75 4% Turkey 81 86 6% 86 5%  83 91 10% 90 5% China 104 96 -8% 96 6% France 156 163 4% 162 9% Spain 401 406 1% 380 21% Germany 417 427 2% 416 23% United States 477 488 2% 479 27% Total 1,790 1,832 2% 1,784 100% Gender Number of employees (headcount) 31 Dec 2023 Number of employees (headcount) 31 Dec 2024 HC difference FTE 31 Dec 2024 2024 FTE distribution Female 216 218 1% 207 12% Male 1, 574 1,614 3% 1,577 88% Other 0 0 0% 0 0% Not reported 0 0 0% 0 0% Total Employees 1,790 1,832 2% 1,784 100% 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 167Befesa Annual Report 2024 FTE 31 Dec 2024 Female Male Other Not disclosed Total % Number of employees 207 1,577 – – 1,784 100% Number of permanent employees 187 1,416 – – 1,603 90% Number of temporary employees 20 161 – – 181 10% Number of non-guaranteed hours employees – – – – – 0% Number of full-time employees 186 1,557 – – 1,743 98% Number of part-time employees 21 20 – – 41 2% Turnover Voluntary termination Other termination Total termination Leavers 124 116 240 HC Average 1,615 1,615 1,615 Total 7.68% 7.18% 14.86% * fi Number of employees The total number of employees is expressed as headcount at the end of fi    the number of employees is expressed as Full-Time Equivalent (FTE). FTE FTE is calculated based on the  fi full-time employee in the same location. This methodology ensures fl  Social continued 168 Befesa Annual Report 2024 Turnover Employee turnover measures the  company over a given period. It is calculated by comparing the number  left the company to the average number of permanent employees fi Employees Overview As of December 31, 2024, Befesa had a total of 1,832 employees (1,784 FTE), representing a 2% increase compared   ff employee bases in the United States (27%), Germany (23%), and Spain (21%), together accounting for more than 70% of the total of employees. Befesa remains committed to job fl percentage of permanent contracts,  employment. Temporary contracts  ensuring a stable and engaged employee base. Befesa also continues to improve ff positions, even though the majority  Among part-time employees (2%    part-time, compared to only 1% of male employees. Regarding gender distribution, the  of employees identifying as female and 88% as male. Manufacturing positions account for 75.82 % of the company’s   primarily due to the limited number of applications received. Despite operating in a traditionally male-dominated industry, Befesa continues to promote gender diversity, ff retain female talent, as is indicated in previous sections of this report. As a result of these measures, the number of female employees in manufacturing has increased by 12% over the past year, rising from 26 in 2023 to 29 in 2024. S1-7 Non-employee workforce HC Non-employee workforce 23 Total headcount 1,832 % 1.3% Number of non-employees’ workers The total number of non-employee  fi fi Methodology To collect the information regarding  reached out to each plant, and they provided the active headcount  December 31, 2024. As of December 31, 2024, non-   23 individuals out of a total headcount  temporary agency employees, engaged by Befesa to address flffi  employed to cover temporary absences such as sick leave or vacation periods, and during periods  employees are leaving the company.  the company to reach out to these fi permanent positions become available, as they have already gained  its operations. This approach helps ffi ffflffi 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 169Befesa Annual Report 2024 Befesa fully recognises employees' right to freedom of association and collective bargaining. As a testament to this commitment, 75% of the  bargaining agreements. In the European Economic Area (EEA),  80-100% of employees in each country falling under such agreements. Outside the EEA, in regions such as Asia and North America, collective    agreements are not in place, Befesa  regulated through alternative means. These include employee handbooks fi   a positive social dialogue. In the European Economic Area (EEA),  established, 80-100% of employees are represented through social dialogue. S1-9, S1-12 Diversity, equity andinclusion Top management gender diversity Top management No. % Female 5 21% Male 19 79% While female employees constitute  presence in top management positions is higher, reaching 21%. Collective bargaining coverage Social dialogue Employees – EEA Employees – non-EEA Workplace representation (EEA only) Coverage rate (For countries with >50 empl. representing >10% total empl.) (Estimate for regions with >50 empl. representing >10% total empl.) (For countries with >50 empl. representing >10% total empl.) 0–19% 20–39% Asia, North America 40–59% 60–79% 80–100% Spain, Germany, Sweden, France Spain, Germany, Sweden, France Generational Diversity Headcount Row Labels Female Male Grand Total % Up to 30 28 201 229 12.5% 30 – 50 111 820 931 50.8% Over 50 79 593 672 36.7% Grand Total 218 1,614 1,832 100% People with disability PWD Total workforce % PWD Female 1 218 0.5% Male 23 1,614 1.4% People with disabilities 24 1,832 1.3% S1-8 Collective bargaining and social dialogue %HC % Employees Covered by CBA 75% Social continued 170 Befesa Annual Report 2024  it is important to recognise that there is   legislation, so the approach must be   global level to normalise the situation  regardless of the degree of disability, seeking their full integration. This goes beyond removing physical barriers    comfortable expressing their condition if they choose to do so. Methodology Every year, Befesa´s Human Resources department collect information on the   operations. This includes details on  data on alternative measures such as fi fi if legal requirements are not met. While this process ensures regulatory compliance, it is not the only method Befesa uses to monitor progress in disability inclusion across ff y Germany (DE):fi Section 2 (1) SGB IX. A person is considered disabled if they have a physical, mental, intellectual, or sensory impairment that fi society for more than six months. A degree of disability (GdB) of 50+fi  consideration. y China (CN): Disability is described in the Law on the Protection of Persons with Disabilities but fi formal recognition. y Spain (ES):fi Royal Legislative Decree 1/2013,  recognized disability degree of 33% or higher is considered disabled. y South Korea (KOR): A quota system 50+ employees to have 3.1% of their workforce comprised of  y Sweden (SWE):fi fi y United States (US): A disability fi impairment that substantially limits major life activities. y France (FR): Recognition as a (RQTH) grants support for employment and requires an assessment by the CDAPH (Commission for the Rights and Autonomy of Disabled People). y Turkey (TK): A person is considered disabled if they experience at least 40% loss of body functions. Although Befesa tracks the number of ffi fi ff  campaigns focus not only on those  ffi fi to their disabilities. S1-10, S1-11, S1-15, S1-16 Compensation and wellbeing Commitment to fair and adequate compensation Befesa is committed to ensuring fair and adequate compensation for all its     legislation, and sector or local collective bargaining agreements. Methodology for adequate wage assessment  Befesa is conducted at the country level,  y Legal Minimum Wage: Employees’ base salaries are compared against  each location. y Collective Bargaining Agreement:   are assessed to ensure compliance  these agreements. y Benchmarks: Where additional  benchmarks exist, Befesa evaluates the competitiveness of salaries against market standards. The calculation is based on the fi ensuring that only base pay is  elements such as bonuses, overtime fi This methodology ensures alignment  collective bargaining agreements, providing a clear and objective  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 171Befesa Annual Report 2024 Evaluation results  salaries applied against reference   fi y 100% of Befesa employees receive  fi y  all employees earn at least the  applicable, meet the conditions set by collective bargaining agreements. These reference indices are based on a combination of publicly available sources, such as government reports, HR publications, and internet-  compensation data from specialised  needed, and informal insights from recruiters and job candidates.   developments, ensuring that all employees receive fair compensation  applicable legislation in each region. Gender Pay Gap The Gender Pay Gap has been  set out in AR 98 of ESRS, using the formula: (Average gross hourly pay of men –   men x 100. The calculation includes all employees  throughout the reporting period. fi received during the year have been included to ensure a comprehensive  hourly pay level has been used as the basis for comparison, ensuring  Gender Pay Gap (%): -12,57 The reported consolidated GPG fl of the gender pay gaps across all countries and sites, as required under CSRD methodology. Befesa’s fl   Social continued     Total Remuneration Ratio Befesa reports an Annual Total Remuneration Ratio of 50.57 for the 2024 reporting period. This ratio fl of the highest-paid employee compared to the median total remuneration of all other employees  The ratio has been calculated using the  fi fi ESRS S1-16. 172 Befesa Annual Report 2024 flff of several structural and organisational factors, including: y  ff   consolidated average remuneration. y fi  roles in industrial sites typically  compared to management positions. y The size and geographic spread of the company, operating across Europe, Asia, and the Americas, introduces currency volatility and ff fl Work–life balance metrics  all employees are entitled to family- related leave. In the past year, 6% of the total   fi Social protection  local regulations in each country,  social protection against major life   In all locations, employees are covered for employment injury, acquired disability, parental leave, unemployment, and retirement. Sickness coverage is provided in  In South Korea, public provisions   are managed through a combination of employer policies and statutory leave entitlements. S1-13 Training and development Befesa is committed to the continuous ff a variety of training and development programmes. These programmes aim to enhance technical skills, leadership fi  competencies, ensuring sustainable talent development. A key element of Befesa’s talent   has been conducted continuously since 2021. The programme is designed for  of experience at Befesa and a higher education background or equivalent fi fi of tenure, this upper limit is applied fl     programme to further develop their leadership skills.   and 2024 and focuses on developing intercultural competencies and strategic business insights. The key topics of the programme include: y Intercultural Communication in Business – Training on cultural ff ff in an international corporate environment. y   management (Executive Chaiman, CEO and CFO) and presentations by corporate directors on key business areas such as human resources, health & safety, IT and compliance.   programme in April 2025. Work-life balance metrics Female Male Total  23 87 110 Nº of employees entitled to leave 218 1,614 1,832 % of entitled employees that took family-  11% 5% 6% 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 173Befesa Annual Report 2024    graduates and continues in 2024. It focuses on leadership development  challenges. The core components of the programme are: y Leadership Development – Training  recognised management consulting fi operational leadership skills. y Practical Business Challenge –  problems under the guidance of business mentors, developing analytical and strategic decision- making abilities. y Highlight: Final presentation of their solutions to the Chairman, CEO and CFO. y   insights into current business challenges and corporate strategies.   y Group 1 started in September 2023 and completed the programme in June 2024. y Group 2 began in March 2024 and  May 2025. By combining intercultural communication, corporate strategy, and hands-on leadership development,  provides a comprehensive and sustainable development path for future leaders at Befesa. Regular performance and career development reviews In addition to global HR initiatives, local  across various Befesa locations to  performance evaluation systems are in place in almost all Befesa locations ensuring regular feedback and development opportunities. These local performance evaluations complement the global HR initiatives, ensuring that all employees, regardless of location or job level, receive structured feedback, development  support. In most locations, individual companies    year, an estimated 42% of the total headcount participated in regular performance and career development  While most countries conduct annual evaluations, some have additional  y  certain employee groups. y China conducts monthly evaluations for blue-collar employees alongside annual  White-collar employees typically  Blue-collar employees often undergo more frequent or informal evaluations (e.g., in China, Germany, and Spain). Additionally, most Blue-collar have an incentive system tied to annual production targets, reinforcing  shared accountability. This fosters  collective success is valued. Befesa’s commitment to employee training and professional development fl and local programmes. Through  Professionals Programme, Global      ff both individual career progression and Befesa’s long-term success in a competitive global market. Annual Performance Review Befesa aims for a culture of continuous improvement and professional development through  Programme. This structured process plays a crucial role in assessing employee performance, setting development goals, and aligning  company's strategic objectives. In 2024, a total of 217 employees (calculated by headcount) participated in the Global Annual Performance  by the Global HR team. Female Male Total 53 164 217 Social continued 174 Befesa Annual Report 2024 Focus Group: Employees eligible for a performance-based bonus.  key components: 1. Goal Setting & Performance Assessment • Setting targets for the next year based on business objectives and individual career aspirations. •  year’s targets to assess progress and identify areas for improvement. 2. Evaluation of Befesa Core Competencies. Employees are assessed based on the following core competencies: • Engagement • Health & Safety Commitment • Adaptability • Leadership • Working Relationships • Result-Oriented Approach • Analytical Capability • Strategic Vision 3. Professional Development • Identifying training needs to support employees in improving skills and advancing in their roles. • Discussing potential learning opportunities tailored to their  4. Career Development and Potential • Evaluating the employee’s career   • Discussing possible career paths and development opportunities based on performance and competencies.  is a key element of Befesa’s talent management strategy, ensuring that employees receive constructive Male Female Total Total training hours 34,496 6,542 41,038 No. Total of employees 1,577 207 1,784 Average training hours per employee 22 32 23 2024 Total training hours 41,038 Blue collar (%) 50% White collar (%) 50% Training hours average per employee 23 Gender breakdown (hours) Male 22 Female 32 Age group breakdown (hours) Up to 30 26 30 – 50 28 Over 50 15 Training hours per category General Training 10,449 Health and Safety 23,586 Languages 7,003 feedback, clear development plans, and opportunities for career  company’s long-term success. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 175Befesa Annual Report 2024 2024 Total training cost 513,717€ Blue collar (%) 39% White collar (%) 61% Training Cost average per employee € 288€ Training Cost per Category € General Training 196,090€ Health and Safety 241,448€ Languages 76,178 € The company is committed to      training and development. On average,         Befesa’s dedication to supporting female employees’ professional  In terms of age distribution, employees aged 30-50 years receive the highest  under 30 and over 50. Regarding the distribution by training category, Health & Safety (H&S) training represents the largest share, accounting for 57% of total training fl commitment to maintaining a safe and         to identify and mitigate risks. S1-14 Health and safety metrics Befesa's safety management systems  and contractors. These systems are     standards, including ISO 45001, and OSHAS, in addition to Befesa’s Corporate Safety Standards. Befesa has also instituted targeted risk reduction programmes, such as the Fatal and Serious Injuries Prevention  ffi   and Hand Injuries Prevention measures.   include, but are not limited to: y Life Saving Rules y Inspections & Audits and Safety Observations y Internal Training & Communication y Accident Investigations and Learning Lessons y Plant-level Safety Standards and Work Instructions y Risk Evaluations of Works, Including Periodical Revisions y Procedures & Communications   y Continuous Management Attention y Annual Budget Allocations for Safety Measures Implementation Befesa has maintained a record of no  over the past decade, resulting in zero  2023 2024 Fatalities  0 0 Contractors 0 0 Total 0 0 Professional illness  0 0 Contractors 0 0 Total 0 0 Number of lost time incidents  9 13 Contractors 0 0 Total 9 13 Number of lost work days  580 753 Contractors 0 0 Total 580 753 Befesa has been using the OSHA fi calculating the accident’s rates: Accident rate = Number of accidents    Social continued 176 Befesa Annual Report 2024 OSHA based calculations: 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Lost Time Injury Rate (LTIR)  5.30 3.57 2.88 2.67 2.16 1.34 1.03 0.73 0.55 0.73 Contractors 8.06 0.98 3.88 5.47 1.60 0.66 0.43 0.00 0.00 0.0 Total 5.71 3.11 3.08 3.22 1.98 1.26 0.81 0.55 0.45 0.66 Severity Rate (SR) Total 0.77 0.77 0.31 0.44 0.41 0.48 0.16 0.12 0.15 0.19    Total employees & contractors 2023 2024 Number of recordable incidents Total 49 81 Total recordable rate per 200.000 working hours Total (a) 2.46 4.03  fi  Accident rate = Number of accidents x 1000.000 /Number of reported working hours S1-17 Discrimination incidents and human rights violations Four incidents of alleged discrimination or harassment have been reported  fi as such. CSRD based calculations: Own employees 2024 Number of recordable accidents (including commuting accidents) Total 84 Total recordable rate per 1.000.000 working hours (including commuting accidents) Total ( b) 25.45   Number of recordable accidents (including   Own employees 2024 Number of lost time accidents (including commuting) Total 13 Lost time injury rate per 1.000.000 working hours Total (c) 3.94     01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 177Befesa Annual Report 2024 Governance G-1 Business Conduct ESRS 2 GOV-1 The role of the administrative, supervisory and management bodies ESRS 2 IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities G1-1 Corporate culture and business conduct policies G1-3 Prevention and detection of corruption or bribery G1-4 fi corruption or bribery ESRS 2 GOV-1 The role of the administrative, supervisory and management bodies The Code of Conduct and the General Compliance Policy outline the responsibilities and ethical standards for ffi Befesa, including the role of Befesa's  governs their business conduct and ensures adherence to legal and ethical standards, both internally and in  These policies are implemented  Befesa's daily operations are carried  responsibility. As explained in all its public documentation they form the foundation of its ethical and compliance  critical aspect of its business conduct ff refer to Chapter “GOV-1 + GOV-2 Role of Management & Sustainability  The duties and responsibilities of the ff  Board of Directors y The Board of Directors of Befesa S.A. is responsible for developing ff Compliance Management System  and procedures in place to ensure  and regulations y This responsibility is delegated to the Audit Committee of the Board of Directors that reports to the full Board. This Committee holds regular meetings to monitor the ff four meetings have been held in this regard, and the results of these meetings are reported to the Board. For more information regarding the  GOV-2 of the ESRS 2 chapter. y The Board of Directors not only asks for regular compliance reports from the Audit Committee and ffi   compliance issues raised. y The Board of Directors has already ffi (a corporate manager directly reporting to the Executive Chair) to support the CMS implementation. y Compliance is part of the agenda of the Board of Directors meetings,  fl compliance matters discussed and  Senior Executive Management (Executive Chair and CEO) y The Executive Chair and CEO are committed to ensure compliance and communicate this commitment throughout the organization. y The Executive Chair and CEO are responsible for ensuring that: (i) appropriate guidelines and policies are developed, issued and continuously monitored   respect to those guidelines and   and (iv) non-compliance issues are appropriately sanctioned. 178 Befesa Annual Report 2024 y ffi  compliance matters (in particular regarding time and budget). Compliance Officer y As mentioned above, the Board has ffi  meetings to support the ff of the CMS. y These internal compliance meetings, ensure that all relevant compliance matters are adequately  persons participate: Executive ffi and Global Controller. In addition, other corporate managers (e.g. personnel of the legal department, internal audit, IT department, fi controlling, Environmental, Health,  department, the data protection ffi the business (or various business   practices are) could participate in those meetings depending on the agenda. y ffi   and procedures    employees have questions  iii. implements appropriate training  Befesa’s code of conduct and other material compliance    and Befesa’s other compliance guidelines and policies at regular intervals and proposes amendments or additional compliance guidelines or  v. informs the organisation about important legal developments   vi. if any non-compliance issue is suspected, they investigate  vii. ensures that non-compliance   viii. is responsible for proposing compliance audits to the Executive Chair and for  be made the subject of a  ix. provides regular or ad hoc compliance reports to the Executive Chair and has a reporting line to the Board of  x. is given the responsibility of informing the Board of Directors   non-compliance issue. y The responsibilities and tasks delegated to the Compliance ffi normally done by an appointment letter from Senior Executive Management addressed to, and countersigned by, the ffi Compliance audits y In order to ensure that the CMS is ff implemented to detect potential non-compliance issues has been instead. Befesa has therefore established an audit compliance process led by the Internal Audit Department The Internal Audit Department audits compliance matters in addition to its other matters. y Alternatively, outside professionals fi specializes in compliance audits or fi also conduct compliance audits) could be engaged. y The Internal Audit Director proposes, on an annual basis, a compliance audit plan to the  describes the selected compliance matters to be made subject to an audit. y The results of the compliance audit are reported to the Executive Chair and CEO. An executive summary  submitted to the Audit Committee before being presented to the Board of Directors. All members of the Board of Directors of Befesa S.A. are required to have fi background, experience and ability to adequately perform the duties of the fi fl matrix (ESRS-2 GOV-1 21c + AR5),  members of the Board have ethics and governance skills. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 179Befesa Annual Report 2024 Governance continued ESRS 2 IRO-1 Impacts, risks and opportunities The process to identify material impacts, risks and opportunities is disclosed in section 53 of the ESRS 2 IRO-1, that includes business conduct  EFRAG double materiality guideline, including the context analysis (internal and external communication, analysis fi internal and external stakeholders), the fi impact, risk and opportunities and the evaluation and prioritization of the IROs. G1-1 Corporate culture and business conduct policies Corporate culture in Befesa is mainly covered by the Befesa Compliance Management System (CMS). Befesa is committed to achieving success and fi must, at all times, fully respect all   Befesa’s CMS includes, but is not limited to, internal guidelines and policies such as the code of conduct and guidelines that address  anti-corruption, anti-money laundering, IT services, EHS issues, fl sanctions. These measures, in addition  members in ensuring that Befesa  and values In the next page are the material impacts, risks and opportunities related to Governance: Corporate culture and complaints mechanisms fi materiality, and the policies implemented that relate to them (see the table on the next page) Befesa’s general compliance policy The general compliance policy provides guidance to Befesa and its  ff fl concepts and guidelines that are fi tools and procedures. It covers several topics such as commitment of management, code of conduct, ffififi fi compliance policies, training and the  Befesa’s general compliance policy establishes the foundation for the ff   content of the complete compliance system. It is supported by monthly compliance committees, and by communication and training for the entire organisation. Code of conduct Befesa has in place a code of conduct that is binding for all employees and  is available to all employees and third      The code provides the legal and ethical  directors, executives, managers and fi   document is available in the eight languages spoken in the countries   y  regulations of each jurisdiction. y Do not compromise your integrity. Do not use your position at Befesa fi family or your friends. y ff invitations that could create the fl commercial judgement of the recipient. y Do not deliberately mislead anyone. Never attempt to falsify any record. y  fairness and respect. Any form of discrimination based on race, colour, religion, gender, age, marital status, sexual orientation or disability is unacceptable. y Respect Befesa’s commercial relationships. Treat Befesa’s clients  at all times. Be a good neighbour. y Look out for the safety of others. Health and safety standards and procedures are intended to protect you, your colleagues and all others.  y Respect and protect the environment. y  180 Befesa Annual Report 2024 Below are the material impacts, risks and opportunities related to Governance: Corporate culture and complaints mechanisms identified as a result of the double materiality, and the policies implemented that relate to them: Impacts, Risks and Opportunities (IRO) associated with Governance: Corporate culture and complaints mechanisms and corruption and bribery Type Description – Related policies and procedures Own operations/Value chain Positive Impact Enhancement of employee engagement by fostering a sense of belonging and purpose among employees derived from compliance  – Code of Conduct  Improved corporation reputation through the implementation of policies and procedures focused on transparency, truthfulness, good practices and ethical behaviour. – Code of Conduct – fl – Security Dealings Code – International Sanctions – Diversity, equality and inclusion  fi Befesa through the establishment of secure fi  –  –     regulations through the availability of    purpose of being useful to suppliers. – Supplier Code of Conduct – Code of Conduct – Anti-Corruption & Anti-Bribery – Anti-Trust – International Sanctions – fl  Reduction of corruption and bribery crimes by  anti-money laundering rules and policies established by Befesa. – Anti-Corruption & Anti-Bribery Value chain Foster transparency, accountability and good governance practices by obtaining the UNE fi   ff compliance management systems. – fi  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 181Befesa Annual Report 2024 Governance continued Impacts, Risks and Opportunities (IRO) associated with Governance: Corporate culture and complaints mechanisms and corruption and bribery Negative Impact Absence of Integrated Management Systems, directly affecting the expectations of interest groups in terms of quality, environment, health and safety management. – Befesa CMS Own operations/Value chain Decline in employee trust towards Befesa, stemming from fears of potential repercussions, leads to employees feeling inhibited about reporting problems through the whistle-blowers channel. – Whistleblowing Channel – Whistleblowing Channel Protocol & Whistleblower Protection Policy Own operations The insufficient compliance training implies that employees make unintentional mistakes or even act negligently. While compliance training programs are in place, they may not be comprehensive enough for all employees. – CMS Training – Code of Conduct Training – Quarterly Newsletters – QR Posters – Guidelines of conduct brochures – Compliance web & intranet section Own operations Violation of employee privacy, exposure of sensitive information, and the possibility of this information being used for retaliation, by not having the adequate management system to prevent leakage of personal data of employees. – Confidentiality, and industrial & intellectual property – Privacy Policy Own operations Possible rise in the cases of corruption and bribery due to insufficient compliance training withing employees. While training is provided, it may not be sufficient or comprehensive enough to cover for all countries. – Code of Conduct – Anti-Corruption & Anti-Bribery Own operations Negative impacts to the reputation/image towards Befesa's stakeholders due to potential illegal or ethically questionable activities, such as money laundering, corruption or greenwashing. – Code of Conduct – Anti-Corruption & Anti-Bribery – Anti-money laundering Own operations/Value chain 182 Befesa Annual Report 2024 Impacts, Risks and Opportunities (IRO) associated with Governance: Corporate culture and complaints mechanisms and corruption and bribery Risk Failure to consider business conduct risks can lead to operational issues such as supply chain disruptions due to scarcity of natural resources, labor disputes related  or risk management issues arising from poor governance. – Befesa CMS  ff and regulatory changes can result in a loss of brand value. – Befesa CMS   and governance can damage the reputation of the organization, productivity among employees, and a decrease in market share and income of the organization. – Befesa CMS  Possible rise in the cases of corruption and ffi  mistakes or negligent acts. – General Compliance Policy – Anti-Corruption & Anti-Bribery  Reputational issues derived from the leakage fi  potentially result in legal consequences such as defamation or unfounded accusations. – Code of Conduct – General Compliance Policy –   – fi intellectual property   Directors of Befesa S.A. acts against  internal policies. – Befesa CMS  fi  given its status as a listed company. – Security Dealings Code –  Value chain ffi  and regulations at a global level, incurring possible future sanctions. – Befesa CMS Value chain fi ff anticipation of regulatory requirements. – Befesa CMS  Economic sanctions due to activities considered unfair competition. – Anti-Corruption & Anti-Bribery – Anti-money laundering  01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 183Befesa Annual Report 2024 Governance continued Impacts, Risks and Opportunities (IRO) associated with Governance: Corporate culture and complaints mechanisms and corruption and bribery Opportunity fi generate a strategic positioning in response to the demand of interest groups. – fi   policies for this opportunity management  Competitive positioning as leaders through the introduction and management of ethical  of Befesa. – Befesa CMS  A corporate culture fosters creativity and innovation among employees, driving the generation of innovative solutions to industrial challenges. – Code of Conduct  Enhancement of transparency and accountability, attracting like so investors and fi stakeholders, by ensuring comparability of information through the reporting of sustainability reports. – Befesa CMS  ffi   fi – Anti-Corruption & Anti-Bribery – Anti-money laundering  Protection from potential litigation and legal ff   –  –    Improvement of transparency and accountability as an opportunity to increase the comparability of information and therefore makes investing in Befesa more attractive. Furthermore, this implies that more  Befesa, improving their prices. – Befesa CMS Value chain Strengthening the culture of ethics and integrity as an opportunity to increase the comparability of information and therefore makes investing in Befesa more attractive. – Befesa CMS   fi penalties, and an improvement in operational ffi eliminate corrupt practices that may hinder ffi Furthermore, this implementation helps protect the company's reputation and maintain the trust of customers, suppliers, and investors. – Anti-Corruption & Anti-Bribery – Anti-money laundering – Supplier Code of Conduct  184 Befesa Annual Report 2024  regulations or the infringement of the code of conduct by any employee at  subject to disciplinary measures. Complementary-specific compliance policies Based on the results from the risk fi has developed and updated compliance-relevant documents  Anti-corruption and anti-bribery policy: One of Befesa’s core principles is to    operates. Befesa’s principle is to compete by making deals and providing services to its customers based on the quality and price of its ff providing undue advantages or fi Anti-money laundering policy: Befesa is committed to carrying out its   perform their activities legally and  sources. Accordingly, all employees of  pertinent anti-money laundering   detect and prevent suspicious payment methods. All Befesa employees are obliged to report any suspicious behaviour by clients or trading partners, either to the ffi   guidelines regarding accounting and fi cash and other forms of payment in relation to the transactions that need to be made. Anti-trust policy: It is the unconditional policy of Befesa   enforce compliance throughout the organisation. In this policy, a guideline summarises the basic rules of the    and strictly observe the basic rules fi  ff their operations. Non-compliance   personal consequences for the relevant employee(s). Conflicts of interest policy: The purpose of this policy is to identify  fl fl and its subsidiaries. Every employee ff loyalty to Befesa and make business decisions only in the best interests of the Company, not based on their potential personal interests. All employees must avoid any relationship ff independent judgement in the conduct fl Company’s interests or could reasonably give the appearance of fl Group security dealings code: This code applies to all employees, managers and Directors of Befesa and its fully consolidated subsidiaries and joint ventures. These rules are designed to ensure that employees do not misuse, or place themselves under suspicion of misusing, information about Befesa that they have access to,  investors. This code also includes a  ff International sanctions policy: International sanctions or restrictive measures take the form of economic instruments that seek to modify policies or activities in other countries  rights. The implemented measures are ff that form part of the organisation that adopts them. In the case of the EU, they are obligatory for all its member states. Befesa believes that all its  these restrictive measures, insofar ff aforementioned CMS of Befesa fi systems and controls in relation to international sanctions. Diversity, equality and inclusion policy: Befesa seeks to strengthen diversity, equality and inclusion among its  discrimination. The policy’s purpose is to provide equality, fairness and respect for all the employees of the Company. It seeks to oppose and avoid all forms of discrimination by ensuring that recruitment, remuneration and promotion at Befesa is based on fi 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 185Befesa Annual Report 2024 Confidentiality, and industrial and intellectual property policy:  assets, in particular the industrial and intellectual property rights inherent in  during the progress of its activities. The Company strives to protect this by adopting appropriate measures   establishes the operational rules and standards to be applied at Befesa, as  ff industrial and intellectual property of Befesa, guaranteeing a high level  current legislation. Privacy policy There is in place a privacy policy that applies to all personal data submitted to Befesa through any means of communication. In this policy, ff as the obligation to provide data, data responsible, purpose, type of data and rights, among others. It also covers the measures implemented to protect data security and to prevent the alteration, loss, processing or unauthorised access,  of applicable regulations. Supplier code of conduct During 2020, Befesa implemented a code of conduct for suppliers that must be accepted and signed by all suppliers. Befesa expects its suppliers to implement the principles set out in this code of conduct throughout their   expects suppliers to use their best ff  and to take these principles into  The supplier code of conduct covers ff environmental protection and energy ffi  business integrity and corporate governance standards. The supplier code of conduct is available on     implementation of the code. In addition to the aforementioned policies and codes, Befesa also has ff complement the internal control system: Internal procedures Concept The internal procedures of Befesa take the form of a suitable internal control system that represents the internal  an internal system of communication and authorisation. The main goal is to have a common method of operating, assessing and mitigating the business risks inherent in Befesa’s activities.  y Consistency of actions y Reinforcement of corporate identity y Risk control and reduction y Optimisation of management y Creation of value for stakeholders y fi Covered areas The internal procedures cover ff  place and include controls for the  – Financial management – Legal matters and insurance management – Human resources and CSR – IT management – General expenses – Corporate identity Other aspects covered by Befesa’s CMS In addition to the above aspects, as part of Befesa’s CMS, there are other relevant areas in the system, such as internal controls, risk analyses, insurance coverages and data protection regulations. Internal controls In addition to the compliance policies mentioned, Befesa has in place an internal control matrix that contains fifi control and processes. This cover the fi y Purchases y Fixed assets y Stocks y Sales y Treasury y Human resources y Taxes y Hedging y Equity Governance continued 186 Befesa Annual Report 2024 y Closing and reporting y Legal and ethics Risk analysis and insurance coverage Included in the CMS, Befesa has an Risk Management System in place,   and sustainability matters addressed section of this Annual Report.  the EU General Data Protection Regulation (GDPR) that came into force in May 2018, Befesa has carried out an analysis of the Company’s data-  goal of adapting those standards to  Criminal compliance certification UNE 19601 The Spanish criminal code establishes that legal persons may have criminal responsibility. To avoid this from happening at Befesa, a criminal compliance programme (Criminal Risks  implemented. This programme comprises a set  preventing a breach of the rules of  possible sanctions that could generate responsibility for the Company. fi standard UNE 19601 concerning criminal compliance that Befesa Medio Ambiente S.L.U. satisfactorily achieved  fi  Whistleblowing Channel   to all employees and external third   platform. This platform is available in eight languages: English, German,  Korean and Chinese.   leading company in Europe and the fifi   ff ff   included in the CMS annual training and is also covered in the compliance printed guidelines of conduct that every employee receives. The policy for training in the organisation on business conduct is developed later in this section. fi in UNE 19601 Criminal Compliance, fi  channel, the protocol established and the capability of the people in charge of the channel.  security standards: double security fi ISO 27001, state-of-the-art encryption algorithms, high-security data centres and manual penetration testing. Befesa has a policy called the    reporting of any incident under the policy, permit any form of retaliation or reprisal (including discharge, demotion, transfer, suspension, threat, intimidation, harassment or any other form of discrimination) by any person or group, directly or   and in good faith, reports an incident  Befesa has a structured and comprehensive process to investigate business conduct incidents, including cases of corruption and bribery,  and objectivity. Key aspects of Befesa's investigation procedures include: y Confidentiality and anonymity: All reports are treated as fi identities are protected to the  y Independent oversight: ffi  and ensures investigations are fl of interest. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 187Befesa Annual Report 2024 y Thorough investigation process:  fi analysed to determine the need for an investigation. 2. If required, additional information is gathered from the  parties. 3. Investigations may be  external specialised resources, ensuring impartiality. y Decision-making and corrective actions:  management or the Board of  appropriate actions.  on business conduct is detailed in section G1-3 of this report. In terms of risk regarding corruption  risks are: plant managers, purchases & sales areas employees, employees in fi and managers. Basically those employees that have relationships   fi compliance and business conducts  Governance continued REC Whistle-blower Telephone call Voice intake BKMS system Internal examiner Web report Web platform 188 Befesa Annual Report 2024 These audits cover: y Befesa’s consolidated and fi statements y Company processes and policies y Compliance, ESG policies and ethical standards In 2024, a total of 29 audits (2023:  this internal control matrix. Among others, these include: y fi compliance policies of Spanish  y Training for employees on compliance policies, the code of  y  y Anti-money laundering, payments and collections, and cash  y   y  customers and other business partners, in addition to existing  y   y ff y Training and compensation of  y  y Health and safety. Befesa’s internal audit team is also involved in investigations concerning complaints received through the  The results and progress on internal  Audit Committee every quarter. Whistleblowing channel:  in addition to the preventive and detective measures, Befesa has the   third party can send potential irregularities. In every investigation carried out, the investigators are independents and separated from the people investigated. fi for violation of anti-corruption and  place in Befesa. Corporate review: Compliance culture in Befesa is   approved by management and the Board of Directors. After that, a  both bodies. Communication and promotion are key for a positive development of the corporate culture through the organisation. G1-3 Prevention and detection of corruption or bribery The process that Befesa has in place to prevent, detect and address allegations or incidents of corruption  y Preventive measures: A CMS and all policies and procedures previously detailed. All of them are available to all employees on the  training is provided annually. y Detective measures: Befesa has an Internal Audit Department that carries out an annual audit programme in all subsidiaries, supervised by the Audit Committee. Internal controls and processes included in Befesa’s internal control fi fi is audited by Befesa’s Internal Audit  audit plan approved by Befesa’s Audit Committee. Befesa’s Internal Audit Department conducts audits fi  years for all other operations. Integrated audits conducted by Befesa’s internal audit team provide Befesa’s investors and stakeholders fi fifi information published every quarter. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 189Befesa Annual Report 2024 As it has been mentioned, corporate culture in Befesa is mainly covered by the Befesa CMS. The CMS is reported  ff a) Internal meetings: On a monthly ffi the Executive Chair have a meeting fi  approved. b) The CMS plan and status are  as a regular part of the agenda. c) Audit Committee: A more detailed CMS status is presented in the Audit Committee. Its members supervise the compliance tasks and CMS performance, including   Training and engagement: Befesa has implemented four tools to guarantee that everyone in the organisation has access to the latest compliance initiatives: quarterly    guidelines and QR compliance posters. In addition to these tools, all the compliance information is available to all empoyees in the Befesa intranet.   compliance documentation can  Quarterly newsletters:    fi  employees. These topics are agreed  circulated via email throughout the organisation. Training: The continuous training of Befesa’s employees is key for the future and the development of the organisation. Compliance is an important aspect for the Company. Befesa has therefore developed annual training for employees,     courses and training tests are updated  compliance-related contents. All the topics included in the Befesa CMS are covered by the training tool, including policies regarding business conduct. fi  employees on the CMS and the code          fi   tool, supported by live interactions and questionnaires. Befesa divides its employees into   y White collar employees (roughly 800 employees): Every employee  the annual corporate compliance online training through the       that cover business conducts: Compliance Management System (H1) and Code of Conduct (H2). The CMS training covers the theory and practical exercises relating to the Befesa compliance policies and requirements. In the CMS training, anti-corruption and anti-bribery topics are covered, among others. The code of conduct training is fi covering the contents of the Befesa Code of Conduct. The Compliance  percentage of accomplishment of the training. We understand that  risks in terms of corruption and  fi and business conduct online training courses every year. Governance continued 190 Befesa Annual Report 2024 y All employees (blue collars and white collars) receive a printed  conduct. These brochures are available in the eight languages of Befesa. In addition, every plant and ffi  codes, all compliance and business conduct policies and procedures are available to employees.   makesure that every employee has accomplished the training fi  hundred per cent of employees     Management receives same compliance training as the remaining employees. Board members do not fi but they are informed about the compliance topics in the Board and audit meetings. Brochures on conduct guidelines: Printed brochures on the conduct guidelines are in place and have been sent to all Befesa’s employees. These brochures are available in the eight languages of Befesa. The brochure covers the main aspects of Befesa’s code of conduct and CMS in a visual format that can be easily checked by all personnel. QR compliance posters: With the goal of strengthening  Befesa has designed printed posters  available in eight languages and are  employee can scan the QR codes of fi  y Code of conduct y fi compliance policies y Compliance training y Procedures tool y  G1-4 Confirmed incidents of corruption or bribery There have not been convictions or fi    01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 191Befesa Annual Report 2024 Independent auditor's report KPMG Audit S.à r.l. Tel: +352 22 51 51 1 39, Avenue John F. Kennedy Fax: +352 22 51 71 L-1855 Luxembourg E-mail: info@kpmg.lu Internet: www.kpmg.lu ©2025 KPMG Audit S.à r.l., a Luxembourg entity and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. R.C.S Luxembourg B 149133 To Board of Directors of Befesa S.A. 68-70, Boulevard de la Pétrusse L-2320 Luxembourg, Luxembourg Limited Assurance Conclusion We conducted a limited assurance engagement on the Sustainability Statement of Befesa S.A. (“the Group”) included in section Sustainability Report of the Management Report (the “Sustainability Statement”) as at 31 December 2024 and for the year then ended. Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the accompanying Sustainability Statement is not prepared, in all material respects, in accordance with: — article 29(a) 4 of EU Directive 2013/34/EU (“Directive”); — the European Sustainability Reporting Standards (“ESRS”), including that the process carried out by the Group to identify the information reported in the Sustainability Statement (the “Process”) is in accordance with the description set out in note IRO-1 Double Materiality Analysis; — the disclosures in subsection “The EU Taxonomy” within the environmental section] of the Sustainability Statement with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”); altogether the “Criteria”. Basis for Limited Assurance Conclusion We conducted our limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (revised) (“ISAE 3000”), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, established by the International Auditing and Assurance Standards Board (“IAASB”) as adopted for Luxembourg by the Institut des Réviseurs d’Entreprises (“IRE”). We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Our responsibilities under this standard are further described in the Responsibilities of réviseur d’entreprises agréé’s section of our report. We have complied with the independence and other ethical requirements of the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier” (CSSF), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Our firm applies International Standard on Quality Management (”ISQM”) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements as adopted for Luxembourg by the CSSF and accordingly maintains a comprehensive system of quality control including the design, implementation and operate a system of quality management, of audits or reviews of financial statements, or other assurance and related services engagements. 192 Befesa Annual Report 2024 Emphasis of Matter - New sustainability reporting standards We draw attention to the section “General disclosures” of the Sustainability Statement. Subsection “Basis for preparation” sets out that the Sustainability Statement has been prepared in a context of new sustainability reporting standards requiring entity-specific and temporary interpretations and addressing inherent measurement or evaluation uncertainties. The disclosures in the subsections “GOV-4 Statement on due diligence”, “GOV-5 Risk management and internal controls” and “IRO-1 Double materiality analysis” in section “General disclosures” of the Sustainability statement explain possible future changes in the ongoing due diligence and double materiality assessment process. Due diligence is an on-going practice that responds to and may trigger changes in the Group’s strategy, business model, activities, business relationships, operating, sourcing and selling contexts relevant for stakeholders as a group. The double materiality assessment process may also be impacted in time by sector- specific standards to be adopted. The Sustainability Statement may therefore not include every impact, risk and opportunity or additional entity-specific disclosure that each individual stakeholder may consider important in its own assessment. Our conclusion is not modified in respect of this matter. Emphasis of Matter - Data limitation We draw attention to the fact that the Group encountered data availability limitation when measuring Scope 3 emissions across its locations and value chain. Details regarding material estimation uncertainties and the plan to address data availability and estimation challenges for Scope 3 measurement are provided in Disclosure E1-6. Our conclusion is not modified in respect of this matter. Other Matter The corresponding information in the Sustainability statement and thereto related disclosures with respect to previous years have not been subject to limited assurance procedures. Our conclusion is not modified in respect of this matter. Responsibilities of for the Board of Directors for the Sustainability Statement The Board of Directors of the Group is responsible for: — the preparation of the sustainability information in the Sustainability Statement in accordance with the Criteria, — designing, implementing and maintaining such internal control that determines is necessary to enable the preparation of the sustainability information in the Sustainability Statement, in accordance with the Criteria, that is free from material misstatement, whether due to fraud or error. This responsibility includes: — developing and implementing a process to identify the information reported in the Sustainability Statement in accordance with ESRS and for disclosing this process in note IRO-1 Double Materiality Analysis of the Sustainability Statement. — understanding the context in which the Group’s activities and business relationships take place and developing an understanding of its affected stakeholders; — the identification of the actual and potential impacts (both negative and positive) related to sustainability matters, as well as risks and opportunities that affect, or could reasonably be 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 193Befesa Annual Report 2024 Independent auditor's report continued expected to affect, Group’s financial position, financial performance, cash flows, access to finance or cost of capital over the short-, medium-, or long-term; — the assessment of the materiality of the identified impacts, risks and opportunities related to sustainability matters by selecting and applying appropriate thresholds; and — the selection and application of appropriate sustainability reporting methods and making assumptions and estimates about individual sustainability disclosures that are reasonable in the circumstances. The Board of Directors of the Group is further responsible for the preparation of the Sustainability Statement, which includes the information identified by the Process, in accordance with the Criteria. Inherent limitations in preparing the Sustainability Statement In reporting forward looking information in accordance with ESRS, the management of the Group is required to prepare the forward-looking information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by the Group. Actual outcome is likely to be different since anticipated events frequently do not occur as expected. . Forward-looking information relates to events and actions that have not yet occurred and may never occur. We do not provide assurance on the achievability of this forward-looking information. In determining the disclosures in the Sustainability Statement, the management of the Group interprets undefined legal and other terms. Undefined legal and other terms may be interpreted differently, including the legal conformity of their interpretation and, accordingly, are subject to uncertainties. The references to external sources or websites are not part of the sustainability information as included in the scope of our assurance engagement. We therefore do not provide assurance on this information. Responsibilities of the réviseur d’entreprises agréé Our responsibility is to plan and perform the assurance engagement to obtain limited assurance about whether the Sustainability Statement is free from material misstatement, whether due to fraud or error, and to issue a limited assurance report that includes our conclusion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence decisions of users taken on the basis of the Sustainability Statement as a whole. As part of a limited assurance engagement in accordance with ISAE 3000, we exercise professional judgement and maintain professional scepticism throughout the engagement. Our responsibilities in respect of the Sustainability Statement, in relation to the Process, include: — performing procedures, including obtaining an understanding of internal control relevant to the engagement, to identify risks that the process to identify the information reported in the Sustainability Statement does not address the applicable requirements of ESRS, but not for the purpose of providing a conclusion on the effectiveness of the Process, including the outcome of the Process; — designing and performing procedures to evaluate whether the Process to identify the information reported in the Sustainability Statement is consistent with the Group’s description of its Process as disclosed in note IRO-1 Double Materiality Analysis. 194 Befesa Annual Report 2024 Our other responsibilities in respect of the Sustainability Statement include: — performing risk assessment procedures, including obtaining an understanding of internal control relevant to the engagement, to identify where material misstatements are likely to arise, whether due to fraud or error, but not for the purpose of providing a conclusion on the effectiveness of the Group’s internal control; — designing and performing procedures responsive to where material misstatements are likely to arise in the Sustainability Statement. 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. Summary of the work performed A limited assurance engagement involves performing procedures to obtain evidence about the Sustainability Statement. The procedures performed in a limited assurance engagement vary in nature and form, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. The nature, timing and extent of procedures selected depend on professional judgement, identification of disclosures where material misstatements are likely to arise in the Sustainability Statement, whether due to fraud or error. In conducting our limited assurance engagement, with respect of the Process, we: — obtained an understanding of the Process by performing inquiries to understand the sources of the information used by management and reviewing the Group’s internal documentation of its Process; and — evaluated whether the evidence obtained from our procedures about the Process implemented by the Group was consistent with the description of the Process set out in note IRO-1 Double Materiality Analysis . In conducting our limited assurance engagement, with respect to the Sustainability Statement, we: — obtained an understanding of the Group’s reporting processes relevant to the preparation of its Sustainability Statement; — evaluated whether all material information identified by the Process is included in the Sustainability Statement; — evaluated whether the structure and the presentation of the Sustainability Statement is in accordance with the Criteria; — performed inquires of relevant personnel and analytical procedures on selected disclosures in the Sustainability Statement; — performed substantive assurance procedures based on a sample basis on selected disclosures in the Sustainability Statement; — where applicable, reconciled selected disclosures in the Sustainability Statement with the corresponding disclosures in the financial statements and management report; — evaluated selected methods, assumptions and data for developing estimates and forward- looking information; — analysed, on a limited sample basis, relevant internal and external documentation at the level of the Group for selected disclosures — obtained an understanding of the process to identify taxonomy-eligible and taxonomy- aligned economic activities and the corresponding disclosures in the Sustainability Statement; 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 195Befesa Annual Report 2024 Independent auditor's report continued Other information The management of the Group is responsible for the other information. The other information comprises information included in the consolidated Annual report 2024 but does not include the Sustainability Statement and our assurance report thereon. Our conclusion on the Sustainability Statement does not cover the other information and we do not express any form of assurance conclusion thereon. Luxembourg, 29 April 2025 KPMG Audit S.à r.l. Cabinet de révision agréé Stephan Lego-Deiber 196 Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 197Befesa Annual Report 2024 05 Consolidated financial statements 200 Consolidatedstatementoffinancialposition 202 Consolidatedincomestatement 203 Consolidatedstatementofcomprehensiveincome 204 Consolidatedstatementofchangesinequity 205 Consolidatedstatementofcashflows 206 Notestotheconsolidatedfinancialstatements 272 Responsibilitystatement 273 Independentauditor’sreport 198 Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 199Befesa Annual Report 2024 Assets Note(s) 2024 2023 Non-current assets: Intangible assets Goodwill 7 6 4 5 ,13 7 629, 643 Otherintangibleassets 8 1 09,5 03 10 8 , 0 3 0 75 4, 6 40 73 7 ,6 73 Right-of-use assets 11 37,594 3 1, 9 4 5 Property, plant and equipment 9 736, 555 7 02,660 Non-current financial assets Othernon-currentfinancialassets 10 15 , 8 4 6 3 5 ,13 8 15,846 3 5 ,13 8 Deferred tax assets 19 1 0 2 ,18 2 9 6 ,70 8 Total non-current assets 1, 6 4 6 , 817 1 , 6 0 4 ,1 2 4 Current assets: Inventories 12 10 0, 33 2 101, 0 8 9 Trade and other receivables 13 10 2 , 42 9 7 5 , 818 Trade receivables from related companies 13 354 409 Accounts receivable from public authorities 13–20 10 , 4 8 7 2 0,7 26 Other receivables 13 14 , 6 4 3 22 , 201 Other current financial assets 10 4 61 14 , 6 2 6 Cash and cash equivalents 4 10 2 , 52 0 10 6 , 6 92 Total current assets 3 31, 2 2 6 34 1 ,561 Total assets 1,978 ,0 43 1, 9 4 5 , 6 8 5 The accompanying Notes1 to 28 and the Appendix are an integral part of the consolidated financial statements. Consolidated statement of financial position as at 31 December 2024 (Thousands of euros) 200 Befesa Annual Report 2024 Equity and liabilities Note(s) 2024 2023 Equity: Parent Company 14 Sharecapital 111,048 111,048 Sharepremium 532,867 532, 86 7 Hedgingreserves (20,787) 36,888 Otherreserves 132,254 96 ,49 0 Translationdifferences 24,017 (11 , 7 3 8) Netprofit/(loss)fortheyear 50,820 5 7, 9 7 2 Equity attributable to the owners of the Company 830,219 823,527 Non-controlling interests 14 15,518 53, 829 Total equity 845,737 877 ,356 Non-current liabilities: Long-term provisions 18 16,071 18 , 0 5 3 Loans and borrowings 15 664,086 6 55 , 6 10 Lease liabilities 11–15 20,475 17, 0 8 0 Other non-current financial liabilities 17 16,207 – Other non-current liabilities 16 4,908 6 ,70 7 Deferred tax liabilities 19 110,296 11 3 , 8 4 5 Total non-current liabilities 832,043 8 11 , 2 9 5 Current liabilities: Loans and borrowings 15 25,422 2 8 ,79 8 Lease liabilities 11–15 11,493 9,28 3 Other current financial liabilities 17 26,162 2,22 9 Trade and other payables 169,646 171 , 0 8 4 Other payables Accountspayabletopublicadministrations 16–20 23,590 14 ,1 0 3 Othercurrentliabilities 16 43,950 31, 53 7 67,540 45,64 0 Total current liabilities 300,263 2 5 7, 0 3 4 Total equity and liabilities 1,978,043 1, 9 4 5 , 6 8 5 The accompanying Notes1 to 28 and the Appendix are an integral part of the consolidated financial statements. Consolidated statement of financial position as at 31 December 2024 continued 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 201Befesa Annual Report 2024 Note(s) 2024 2023 Continuing operations: Revenue 5, 22.1 1,239,030 1 ,18 0 , 6 0 0 Changesininventoriesoffinishedgoodsandworkinprogress (4,256) 15 0 Rawmaterialandconsumables 22.2 (575,284) (5 78 ,2 73) Otheroperatingincome 22.3 7,412 3 7,1 0 1 Personnelexpenses 22.4 (145,323) (1 46,278) Otheroperatingexpenses 22.5 (317,020) (304 ,4 90) Amortisation/Depreciation,impairmentandprovisions 22.6 (91,703) (8 2 ,1 6 9) Operating profit 112,856 10 6 , 6 41 Financeincome 23 1,476 2,635 Financecosts 23 (46,713) (39,029) Netexchangedifferences 3.17 7,231 (2 ,17 9) Net finance income/(loss) (38,006) (3 8, 573) Profit/(Loss) before tax 74,850 68,068 Corporateincometaxexpense 19 (20,764) (10 , 5 0 0) Profit/(Loss) for the year from continuing operations 54,086 5 7, 5 6 8 Profit/(Loss) for the year 54,086 5 7, 5 6 8 Attributable to: ParentCompany’sowners 50,820 5 7, 9 7 2 Non-controllinginterests 3,266 (40 4) Earnings/(Losses) per share from continuing and discontinued operations attributable to owners of the Parent (expressed in euros per share) Basicearningspershare: 27 1.27 1. 4 5 The accompanying Notes1 to 28 and the Appendix are an integral part of the consolidated financial statements. Consolidated income statement for the year ended 31 December 2024 (Thousands of euros) 202 Befesa Annual Report 2024 Note(s) 2024 2023 Consolidated profit/(loss) for the year 5 4,086 5 7, 5 6 8 Other comprehensive income from continuing operations: Items that may subsequently be reclassified to income statement: Income and expense recognised directly in equity (17, 9 0 0) 34,48 1 -Cashflowhedges 17 (7 5, 87 0) 79 , 878 -Translationdifferences 3 8 , 74 8 (31, 8 9 8) -Taxeffect 19 19,222 (13 , 4 9 9) Transfers to the income statement (1, 0 27) (2 6 , 918) -Cashflowhedges 17 2, 659 (2 6 , 6 10) -Taxeffect 19 (3 ,68 6) (3 08) Other comprehensive income/(loss) for the year, net of tax (18 , 92 7) 7, 5 6 3 Total comprehensive income/(loss) for the year 3 5 ,1 5 9 6 5 ,1 3 1 Attributable to: ParentCompany’sowners 28, 90 0 6 5,49 8 Non-controllinginterests 6 ,259 (3 67) The accompanying Notes1 to 28 and the Appendix are an integral part of the consolidated financial statements. Consolidated statement of comprehensive income for the year ended 31 December 2024 (Thousands of euros) 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 203Befesa Annual Report 2024 Attributable to the owners of the Parent Net profit/ Non- Share Share Hedging Other Translation (loss) for controlling capital premium reserves reserves differences the year interests Total (Note14) (Note14) (Note14) (Note14) (Note14) (Note14) (Note14) equity Balances at 31December 2022 111 , 0 4 8 532, 86 7 (2, 573) 37,340 2 0 ,1 9 7 10 6 , 2 2 0 14 ,1 5 3 819 , 25 2 Totalcomprehensiveincome for the year – – 39,461 – (31,935) 5 7, 9 7 2 (367) 6 5 ,1 3 1 Non-controllinginterests operations Business combination (Notes6 and 14) – – – – – – 40,043 40,0 43 Distributionofprofitfortheyear Reserves – – – 10 6 , 2 2 0 – (1 0 6,22 0) – – Dividends(Note14) – – – (5 0,000) – – – (5 0,000) Othermovements(Note3.17) – – – 2, 930 – – – 2,93 0 Balances at 31December 2023 111 , 0 4 8 532, 86 7 36,888 96, 490 (11 , 7 3 8) 57,972 53, 829 877,356 Total comprehensiveincome for the year – – (57 ,675) – 3 5 ,75 5 50 ,820 6 , 259 3 5 ,15 9 Non-controllinginterests operations Acquisitionsofshares (Note14) – – – 4, 356 – – (4 4, 570) (4 0 , 2 14) Distributionofprofitfortheyear Reserves – – – 5 7, 9 7 2 – (5 7, 9 7 2) – – Dividends(Note14) – – – (29,2 00) – – – (29,2 00) Othermovements(Note3.17) – – – 2,6 36 – – – 2,636 Balances at 31December 2024 111 , 0 4 8 532, 86 7 (20 ,7 87) 13 2 , 25 4 2 4 , 0 17 50, 820 15 , 518 8 45 ,73 7 The accompanying Notes1 to 28 and the Appendix are an integral part of the consolidated financial statements. Consolidated statement of changes in equity for the year ended 31 December 2024 (Thousands of euros) 204 Befesa Annual Report 2024 01 02 03 04 05 06 07 Befesa at a glance To Befesa’s Management Sustainability Consolidated Statutory financial Additional shareholders report financial statements statements information Consolidated statement of cash flows for the year ended 31 December 2024 (Thousands of euros) 2024 2023 () Cash flows from operating activities: Profit/(Loss) for the year before tax 74 , 8 5 0 68 ,068 Adjustments for: Amortisation,impairmentandothers(Note22.6) 91,7 0 3 8 2 ,16 9 Changesinprovisions (1, 9 82) (4 65) Interestincome (1, 4 76) (2 ,635) Financecosts(Note23) 4 6 , 713 39,029 Otherprofitandloss(Notes2.6and6) (8 19) (2 3 , 24 5) Exchangedifferences(Note3.17) (7, 2 3 1) 2 ,17 9 Changes in working capital: Tradereceivablesandothercurrentassets (2 0 ,1 8 5) 4 4 , 113 Inventories (3 ,12 6) 1, 6 0 7 Tradeandotherpayables 9 ,17 0 (4 6, 829) Other cash flows from operating activities: Taxespaid/collected 4,20 5 (16 , 5 6 5) Net cash flows from/(used in) operating activities 191, 8 22 1 4 7, 4 2 6 Cash flows from investing activities: Investmentsinintangibleassets(Note8) (4 ,12 4) (3 , 425) Investmentsinproperty,plantandequipment(Note9) (7 4,444) (101, 3 8 7) Collectionfromfinancialassets – 11 3 (Acquisition)/Disposalofnewsubsidiaries(Note6) – 13 , 8 4 8 Net cash flows from/(used in) investing activities (78,5 68) (9 0 , 8 51) Cash flows from financing activities: Cashinflowsfrombankborrowingsandotherliabilities(Note15) 24 , 0 14 3,8 48 Cashoutflowsfrombankborrowingsandotherliabilities(Note15) (29 ,697) (24 , 5 8 4) Dividendspaidtoshareholders(Note14) (29 ,200) (5 0,000) Interestpaid (42 , 3 9 0) (30, 102) Transactionsinvolvingnon-controllinginterest(Note14) (40, 000) (9,50 0) Net cash flows from/(used in) financing activities (117, 2 7 3) (11 0 , 3 3 8) Effect of foreign exchange rate changes on cash and cash equivalents (15 3) (1 ,296) Net increase/(decrease) in cash and cash equivalents (4 ,17 2) (55,0 59) Cashandcashequivalentsatthebeginningoftheyear 10 6 , 6 92 16 1 ,7 51 Cashandcashequivalentsattheendoftheyear 10 2 , 5 2 0 10 6 , 6 9 2 () Interestpaidhasbeenreclassifiedfromcashflowsfromoperatingactivitiestocashflowsfromfinancingactivities(pleaserefertoNote3.23). The accompanying Notes1 to 28 and the Appendix are an integral part of the consolidated financial statements. BefesaAnnualReport2024205 1. General information Befesa, S.A. (hereinafter the “Parent Company” or the “Company”) was incorporated in Luxembourg on 31 May 2013 as a “société à responsabilité limitée”, subject to Luxembourg law for an unlimited period of time. The registered office of the Company is 68-70 Boulevard de la Pétrusse, L-2320 Luxembourg. The Company’s statutory activity is the acquisition, holding and disposal of interests in Luxembourg and/or in foreign companies and undertakings, as well as the administration, development and management of such interests. The Company may provide loans and financing in any other kind or form or grant guarantees or security in any other kind or form, for the benefit of the companies and undertakings forming part of the Group of which the Company is a member. The Company may also invest in real estate, in intellectual property rights or in any other movable or immovable assets in any kind or form. The Company may borrow in any kind or form and issue bonds, notes or any other debt instruments as well as warrants or other share subscription rights. In general, the Company may carry out any commercial, industrial or financial operation that it may deem useful in accomplishing and conducting its statutory activity. The Company’s financial year starts on 1 January and ends on 31 December. The Company’s shareholders, at their General Meeting held on 18 October 2017, agreed to convert the Company from a private limited liability company to a public limited company. On the same date, it was also agreed at the Company’s General Meeting to change the name of the Company from Bilbao Midco, S.à.r.l. to Befesa, S.A. The principal place of business of the Group is located in Asúa – Erandio, Bizkaia (Spain). The Company and its subsidiaries (“Befesa” or the “Group”) is an international industrial group (see Appendix) that engages mainly in the management and treatment of industrial residues (see Note 5) . The majority of the systems, equipment and facilities included in the Group’s property, plant and equipment should be deemed to be assigned to the management and treatment of industrial residues and, in general, to the protection and improvement of the environment, either because of the business activities carried out by the Group or because of their nature (industrial residues). Most of the expenses and revenues for 2024 and 2023 should be understood to accrue in the normal course of the aforementioned activities. Any information on possible provisions for contingencies and charges and on possible contingencies, liabilities and grants, if any, arising from the normal performance of the activities constituting the Group’s statutory activity, and other environmental measures are described, as and when appropriate, in the related notes to the consolidated financial statements. Since 3 November 2017, Befesa, S.A. has been listed on the Frankfurt Stock Exchange (Germany) (Note 14) (ISIN code LU1704650164 ). Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) 206 Befesa Annual Report 2024 2. Basis of presentation of the consolidated financial statements and basis of consolidation The consolidated financial statements have been prepared on the basis of the accounting records of Befesa, S.A. and its consolidated subsidiaries. The consolidated financial statements for 2024 have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as adopted by the European Union (IFRS-EU) and other applicable provisions of the applicable financial reporting framework, to give a true and fair view of the consolidated equity and consolidated financial position of Befesa, S.A. and subsidiaries at 31 December 2024, and the consolidated results of operations, consolidated cash flows and changes in consolidated equity for the year then ended. Details of the Group’s accounting policies are included in Note 3. The Directors of the Parent Company consider that the consolidated financial statements for the year ended 31 December 2024, authorised for issue on 29 April 2025, will be approved with no changes by the shareholders at their Annual General Meeting (AGM) to be held on 19 June 2025. 2.1 Fair presentation The consolidated statement of financial position, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and the notes thereto for the 2024 financial year include comparative figures for the prior year, which formed part of the 2023 consolidated financial statements approved by the shareholders of the Parent at their AGM held on 20 June 2024. The Group’s consolidated financial statements for 2024 were formally prepared: y In accordance with Accounting Standards (“IFRS”) as adopted by the European Union (IFRS-EU), in conformity with the regulation (EC) of the European Parliament and of the Council, including International Accounting Standards (IAS) and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and by the Standing Interpretations Committee (SIC). The principal accounting policies and measurement bases applied in preparing the accompanying consolidated financial statements are summarised in Note 3 . y Considering all the mandatory accounting policies and rules, and measurement bases with a material effect on the consolidated financial statements, as well as the alternative permitted by the relevant standards in this connection, which are specified in Note 3. y So that they present fairly the Group’s consolidated equity and consolidated financial position at 31 December 2024 and the consolidated results of its operations, changes in consolidated equity and consolidated cash flows for the year then ended. y On the basis that the accounting records are kept by the Parent and by the other Group companies. However, because the accounting policies and measurement bases used in preparing the Befesa, S.A. consolidated financial statements (IFRS-EU) differ from those used by the Group companies (local standards), the required adjustments and reclassifications were made on consolidation to unify the policies and methods used and to make them compliant with IFRS-EU. y The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 2.4. y The consolidated financial statements have been prepared in accordance with Luxembourg’s legal and regulatory framework and on the going concern assumption . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 207Befesa Annual Report 2024 2. Basis of presentation of the consolidated financial statements and basis of consolidation continued 2.2 Adoption of new standards and interpretations issued a) First-time application of standards The following new and amendments to standards and interpretations, which are applicable for the first time in 2024, are either not material or do not have a material impact on the consolidated financial statements of the Group as adopted by the EU: – Amendments to IAS 1 Presentation of Financial Statements: y Classification of Liabilities as Current or Non-current y Classification of Liabilities as Current or Non-current – Deferral of Effective Date y Non-current Liabilities with Covenants – Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback – Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements b) Standards, amendments and interpretations issued but not yet effective At the date these consolidated financial statements were authorised for issue, standards, amendments and interpretations issued but not yet effective, and which the Group expects to adopt for annual periods beginning on or after 1 January 2025, are as follows, as adopted by the EU: – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability In light of the Group’s activities, the effect of applying the new standards, amendments or interpretations to the consolidated financial statements when they are applied for the first time is not deemed to be relevant for the Group. c) Standards, amendments and interpretations to existing standards that have not been adopted by the European Union At the date these consolidated financial statements were authorised for issue, the IASB and the IFRS Interpretations Committee had published the following standards, amendments and interpretations, which are pending adoption by the European Union: – Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7): Disclosures – Annual Improvements Volume 11 to IFRS Accounting Standards – Amendments to: y IFRS 1 First-time Adoption of International Financial Reporting Standards y IFRS 7 Financial Instruments: Disclosures and its Accompanying Guidance on Implementing IFRS 7 y IFRS 9 Financial Instruments y IFRS 10 Consolidated Financial Statements y IAS 7 Statement of Cash flows – Amendments to IFRS 9 and IFRS 7: Contracts Referencing Nature-dependent Electricity – IFRS 18 Presentation and Disclosure in Financial Statements – IFRS 19 Subsidiaries without Public Accountability: Disclosure The Group is in the process of reviewing these standards; however, it estimates that the effect of applying new standards, amendments or interpretations to the consolidated financial statements when applied for the first time is not considered to be material for the Group . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 208 Befesa Annual Report 2024 2.3 Functional currency These consolidated financial statements are presented in thousands of euros, as the euro is the currency used in the main economic area in which the Group operates. Foreign operations are recognised in accordance with the policies established in Note 3. The main currencies other than the euro in which the Group carries out its transactions are the US dollar, Korean won, Swedish krona, Turkish lira and Chinese yuan. 2.4 Use of estimates and judgements The information in these consolidated financial statements is the responsibility of the Board of Directors of the Parent Company. In the Group’s consolidated financial statements for the year ended 31 December 2024, estimates are occasionally made by senior management of the Parent Company and of the consolidated companies, and later ratified by the Directors, in order to qualify certain assets, liabilities, income, expenses and obligations reported herein. Relevant accounting estimates and assumptions These estimates relate to the following: Impairment losses on goodwill and certain assets (see Notes 7, 8, 9 and 11) The Group verifies annually whether there is an impairment loss in respect of goodwill and other assets, in accordance with the accounting policy described in Note 3. When calculating the value in use of the principal items of goodwill and licences with indefinite useful life, the assumptions used were as follows: y Projections of the cash flows of the cash-generating unit (CGU) or group of CGUs in question are made for periods of five years (when based on past experience it is possible to predict cash flows accurately over a period longer than five years), calculating a residual value based on flow for the last year projected, provided that this flow is representative of a normalised flow to reflect margin and cash flow experience in those businesses, as well as future expectations. The projections are based on the budgets for next year, increased in accordance with the assumptions estimated by management. y The gross margins used in the calculation are in line with the profit expected to be obtained, based on past experience of profits of each of the segments and on new contracts existing in each case. y To discount the flows, a discount rate is used based on the weighted average cost of capital for assets of this type, adjusted where necessary, on the basis of the additional risk that could be contributed by certain types of activity. y In any case, further sensitivity analyses are conducted, particularly regarding the discount rate used and the residual growth rate, to ensure that the effect of possible changes in estimates of these rates does not have an impact on the recoverability of the recognised goodwill and licences with indefinite useful life. Recoverability of deferred taxes (Notes 3.18 and 19) Deferred tax assets are recognised for all deductible temporary differences and unused deductions for which it is probable that the companies of the Group will have future tax profits against which they can be utilised. To determine the deferred tax assets eligible for recognition, their amount, the dates on which the future tax profits are expected to be obtained and the reversal period of the temporary differences are estimated. If the final outcome (on judgement areas) differs unfavourably by 10% from management estimates, deferred assets would decrease and no material income tax expense would be recorded. If these changes evolved favourably, these deferred tax assets would increase and no material income tax expense would be recorded. Fair value of derivatives The fair value of financial instruments that are not quoted in an active market (e.g. OTC derivatives) is determined by using valuation techniques. The Group uses judgement to select a series of methods and makes assumptions that are mainly based on the market conditions existing at each balance sheet date . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 209Befesa Annual Report 2024 2. Basis of presentation of the consolidated financial statements and basis of consolidation continued Estimates made in the context of share-based payments (Note 24) To calculate the liability for the obligation derived from share-based compensation plans with certain employees, at year-end the Group estimates the fair values of the liabilities based on Befesa, S.A.’s share price, and the degree of target achievement. Estimates made in the context of the Purchase Price Allocation (Notes 3.1 and 6) Estimating the fair value of assets acquired and liabilities assumed in business combinations and Purchase Price Allocations in acquisitions requires significant judgements by management. Although these estimates were made on the basis of the best information available at 31 December 2024 on the events analysed, events that take place in the future might make it necessary to change these estimates (upwards or downwards) in coming years. Changes in accounting estimates would be applied prospectively in accordance with the requirements of IAS 8, recognising the effects of the change in estimates in the related consolidated income statement . 2.5 Changes in the scope of consolidation The following is a description of the main changes in the scope of consolidation in 2024 and 2023: 2024 There was no change in the scope of consolidation in 2024. 2023 On 1 January 2023, the Group proceeded to re-evaluate control over its French subsidiary Befesa Zinc Recytech, S.A.S., concluding that it obtains control over Befesa Zinc Recytech, S.A.S., and therefore becoming consolidated by the global integration method as from 1 January 2023 (Note 6). Until 31 December 2022, the Group considered this agreement as a joint agreement, sharing control over the economic activity. Meanwhile, on 10 February 2023, the Group proceeded with the sale of the UK subsidiary Befesa Salt Slags Ltd., which at 31 December 2022 was out of activity. The sale price amounted to 100 thousand of British pounds. Therefore, Befesa Salt Slags Ltd. no longer belongs to the scope of consolidation of the Group. This sale does not have any material impact on the consolidated financial statements. 2.6 Alternative performance measures The Group regularly reports alternative performance measures (APMs) not defined by the IFRS Accounting Standard that management believes are relevant indicators of the performance of the Group. Alternative performance measures are used to provide readers with additional financial information that is regularly reviewed by management and is used to make decisions about operating matters. These measures are also used for defining senior management’s variable remuneration. The measures are useful in discussions with the investment analysts’ community. However, these APMs are not uniformly disclosed by all companies, including those in the Group’s industry. Accordingly, it may not be comparable with similarly titled measures and disclosures by other companies. In addition, certain information presented is derived from amounts calculated in accordance with the IFRS Accounting Standard but is not itself an expressly permitted GAAP measure. Such measures should not be viewed in isolation or as an alternative to the equivalent IFRS Accounting Standard measure. Definitions used and reconciliations to the closest IFRS Accounting Standard measures are presented below . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 210 Befesa Annual Report 2024 a) Net debt Net debt is defined as current and non-current financial debt plus current and non-current lease liabilities less cash and cash equivalents and less other current financial assets adjusted by non-cash items. The Group believes that net debt is relevant to investors, as it gives an indication of the absolute level of non-equity funding of the business. This can be compared to the income and cash flows generated by the business, and available undrawn facilities. The following table reconciles net debt to the relevant statement of financial position line items: 2024 2023 Non-current financial debt (Note 15) 664,086 655,610 Non-current lease liability (Notes 11 and 15) 20,475 17,080 Current financial debt (Note 15) 25,422 28,798 Current lease liability (Notes 11 and 15) 11,493 9,283 Cash and cash equivalents (Note 4) (102,520) (106,692) Other current financial assets adjusted by non-cash items (Note 10) – (71) Net debt 618,956 604,008 b) EBITDA, Adjusted EBITDA and EBITDA margin EBITDA is defined as operating profit for the period before the impact of amortisation, depreciation, impairment and provisions. Adjusted EBITDA is defined as EBITDA adjusted by any non-recurrent costs/incomes. EBITDA margin is defined as EBITDA divided by revenue. The Group believes that EBITDA and EBITDA margin are useful supplemental indicators that may be used to assist in evaluating the Group’s operating performance. The following table reconciles EBITDA to the consolidated income statement line items from which it is derived: 2024 2023 Revenue (Note 5) 1,239,030 1,180,600 Income/Expenses from operations (except revenue, depreciation and amortisation/depreciation charge and provisions) (Note 22) (1,034,471) (991,790) Amortisation/Depreciation, impairment and provisions (a) (Note 22.6) (91,703) (82,169) EBIT (operating profit/(loss)) (b) 112,856 106,641 EBITDA (operating profit/(loss) before amortisation/depreciation and provisions) (a+b) 204,559 188,810 Non-recurrent costs/incomes () 8,803 (6,828) Adjusted EBITDA 213,362 181,982 () This amount mainly includes other non-recurrent costs related to Befesa Zinc Metal, LLC. and the estimated amount of the impact of hyperinflation on the Group’s EBITDA (2023: this amount mainly included the impact of the takeover in Befesa Zinc Recytech, S.A.S. Notes 6 and 22.3. The estimated amount €3,678 thousand of the impact of hyperinflation on the Group’s EBITDA and other non-recurrent costs related to the ramp-up of Befesa Zinc Metal, LLC., Befesa Zinc Environmental Protection Technology Henan Co, Ltd., and the plant of Hanover of Befesa Salzschlacke GmbH.) 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 211Befesa Annual Report 2024 2. Basis of presentation of the consolidated financial statements and basis of consolidation continued The following table provides a reconciliation of EBITDA margin and Adjusted EBITDA margin: 2024 2023 Revenue (a) 1,239,030 1,180,600 EBITDA (b) 204,559 188,810 Non-recurrent costs/incomes 8,803 (6,828) Adjusted EBITDA (c) 213,362 181,982 EBITDA margin (%) (b/a) 17% 16% Adjusted EBITDA margin (%) (c/a) 17% 15% c) EBIT, Adjusted EBIT and EBIT margin EBIT is defined as operating profit for the year. The Group uses EBIT to monitor its financial return after both operating expenses and a charge representing the cost of usage of its property, plant and equipment and finite-life intangible assets. Adjusted EBIT is defined as EBIT adjusted by any non-recurrent costs/incomes. EBIT margin and Adjusted EBIT margin are defined as EBIT and Adjusted EBIT as a percentage of revenue, respectively. The Group believes that these ratios are useful measures to demonstrate the proportion of revenue that has been realised as EBIT and Adjusted EBIT, and therefore indicators of profitability. The following table reconciles EBIT and Adjusted EBIT to the income statement line items from which it is derived: 2024 2023 Revenue (Note 5) 1,239,030 1,180,600 Income/Expenses from operations (except revenue, depreciation and amortisation/depreciation charge and provisions) (Note 22) (1,034,471) (991,790) Amortisation/Depreciation, impairment and provisions (Note 22) (91,703) (82,169) EBIT (operating profit/(loss)) 112, 856 106,641 Non-recurrent costs/(income) EBIT (Note 3.17) 2,748 1,906 Non-recurrent costs/(income) EBITDA (Note 2.6) 8,803 (6,828) Adjusted EBIT 124,407 101,719 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 212 Befesa Annual Report 2024 The following table provides a reconciliation of EBIT margin and Adjusted EBIT margin: 2024 2023 Revenue (a) 1,239,030 1,180,60 0 EBIT (b) 112,856 106,641 Non-recurrent costs/(income) EBIT (Note 3.17) 2,748 1,906 Non-recurrent costs/(income) EBITDA (Note 2.6) 8,803 (6,828) Adjusted EBIT (c) 124,407 101,719 EBIT margin (%) (b/a) 9% 9% Adjusted EBIT margin (%) (c/a) 10% 9% d) Net debt/Adjusted EBITDA (adjusted leverage ratio) Net debt/Adjusted EBITDA ratio is defined as net debt divided by Adjusted EBITDA. The Group believes that this ratio is a useful measure to show its ability to generate the income needed to be able to settle its loans and borrowings as they fall due. The following table reconciles the net debt/Adjusted EBITDA ratio to net debt and Adjusted EBITDA: 2024 2023 Net debt (Note 4) 618,956 604,008 Adjusted EBITDA 213,362 181,982 Net debt/Adjusted EBITDA 2.9 3.3 e) Capex Capex is defined as the cash payments made during the period for investments in intangible assets, property, plant and equipment, and right-of-use assets. The Group believes that this measure is useful to understand the effort made by the Group each year to acquire, upgrade and maintain physical assets such as property, industrial buildings and equipment. The following table reconciles capex to the cash flow statement line items from which it is derived: 2024 2023 Cash flows from investing activities: Investments in intangible assets (Note 8) 4,124 3,425 Investments in property, plant and equipment (Note 9) 74,444 101,387 Capex 78,568 104,812 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 213Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied All accounting principles and policies are consistently applied by the Group. 3.1 Business combination The Group applies the acquisition method for business combinations. The Group has applied IFRS 3 “Business Combinations” revised in 2008 to transactions carried out from 1 January 2010. The acquisition date is the date on which the Group obtains control of the acquiree. The consideration transferred in a business combination is calculated as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred or assumed, the equity instruments issued and any consideration contingent on future events or compliance with certain conditions in exchange for control of the acquiree. The consideration transferred excludes any payment that does not form part of the exchange for the acquired business. Acquisition costs are recognised as an expense when incurred. The Group recognises the assets acquired and liabilities assumed at their acquisition-date fair value. Liabilities assumed include any contingent liabilities that represent present obligations arising from past events for which the fair value can be reliably measured. The Group also recognises indemnification assets transferred by the seller at the same time and following the same measurement criteria as the item that is subject to indemnification from the acquiree, taking into consideration, where applicable, the insolvency risk and any contractual limitations on the indemnified amount. These criteria are not applicable to long-term defined benefit obligations, share-based payment transactions, or deferred tax assets and liabilities. The excess between the consideration given, plus the value assigned to non-controlling interests and the value of net assets acquired and liabilities assumed, is recognised as goodwill. Where applicable, the defect, after assessing the amount of consideration delivered, the value allocated to non-controlling interests and the identification and valuation of the net assets acquired, is recognised in a separate item in the consolidated income statement. The business combination has only been determined provisionally, so the identifiable net assets have initially been recognised at their provisional values, and adjustments made during the measurement period have been recognised as if they had been known at the acquisition date. Comparative figures for the previous year are restated where applicable. In any event, adjustments to provisional amounts only reflect information obtained about facts and circumstances that existed at the acquisition date and, if known, would have affected the measurement of the amounts recognised at that date. For business combinations achieved in stages, the excess of the consideration given, plus the value assigned to non- controlling interests and the fair value of the previously held interest in the acquiree, over the net value of the assets acquired and liabilities assumed, is recognised as goodwill. Any shortfall, after assessing the consideration given, the value assigned to non-controlling interests and to the previously held interest, and after identifying and measuring the net assets acquired, is recognised in profit or loss. The Group recognises the difference between the fair value of the previously held interest in the acquiree and the carrying amount in consolidated profit or loss or in other comprehensive income . 3.2 Subsidiaries Subsidiaries are entities, including structured entities, over which the Group, either directly or indirectly, exercises control. The Group controls a subsidiary when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The Group has power over a subsidiary when it has existing substantive rights that give it the ability to direct the relevant activities. The Group is exposed, or has rights, to variable returns from its involvement with the subsidiary when the returns from its involvement have the potential to vary as a result of the subsidiary’s performance . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 214 Befesa Annual Report 2024 The income, expenses and cash flows of subsidiaries are included in the consolidated financial statements from the date of acquisition, which is the date on which the Group obtains effective control of the subsidiaries. Subsidiaries are no longer consolidated once control ceases. Transactions and balances with Group subsidiaries and unrealised gains or losses have been eliminated on consolidation. Nevertheless, unrealised losses have been considered as an indicator of impairment of the assets transferred. The accounting policies of subsidiaries have been adapted to Group accounting policies for transactions and events in similar circumstances. The consolidated financial statements or financial statements of the subsidiaries used in the consolidation process have been prepared as of the same date and for the same period as those of the Group . 3.3 Non-controlling interests Non-controlling interests in subsidiaries acquired as of 1 January 2004 are recognised on the acquisition date at the percentage participation in the fair value of identifiable net assets. Non-controlling interests in subsidiaries acquired prior to the transition date were recognised at the percentage participation in their equity on the date of first consolidation. Non-controlling interests are disclosed in consolidated equity separately from equity attributable to shareholders of the Parent. Non-controlling interests in consolidated profits for the year (and in consolidated comprehensive income for the year) are also presented separately in the consolidated statement of comprehensive income. The consolidated total comprehensive income for the year and changes in equity of the subsidiaries attributable to the Group and non-controlling interests after consolidation adjustments and eliminations are determined in accordance with the percentage ownership at year-end, without considering the possible exercise or conversion of potential voting rights and after discounting the effect of dividends, agreed or not, on cumulative preference shares classified in equity accounts. However, Group and non-controlling interests are calculated taking into account the possible exercise of potential voting rights and other derivative financial instruments which, in substance, currently give access to the returns associated with the interests held in the subsidiaries. The results and each component of other comprehensive income are allocated to equity attributable to the shareholders of the Parent and to non-controlling interests in proportion to their investment, although this implies a balance receivable from non-controlling interests. The increase and decrease of non-controlling interests in a subsidiary while maintaining control is recognised as a transaction with equity instruments. Therefore, no new acquisition cost arises from the increases, and no results are recognised from the decreases. Instead, the difference between the consideration paid or received and the carrying amount of the non-controlling interests is recognised in the investor’s reserves . 3.4 Goodwill This heading in the consolidated financial statement reflects the difference between the price paid to acquire certain consolidated subsidiaries and the Group’s interest in the fair value of the net assets (assets, liabilities and contingent liabilities) of those companies at the date of acquisition. Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the Company acquired over the acquisition cost of the investment is allocated to income on the date of acquisition. Goodwill is recognised as an asset and at the end of each reporting period it is estimated whether any impairment has reduced its value to an amount lower than its carrying amount. If so, impairment losses are recognised for the goodwill, which must not be reversed in a subsequent period. Goodwill is allocated to CGUs for the purpose of impairment testing. The goodwill is allocated to the CGUs that are expected to benefit from the business combination in which the goodwill arises. On disposal of a subsidiary or associate, the attributable amount of goodwill is included in the determination of the gain or loss on disposal . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 215Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied continued 3.5 Other intangible assets Intangible assets are recognised initially at acquisition or production cost and are subsequently measured at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets – research and development expenditure Expenditure on research activities is recognised as an expense in the year in which it is incurred. In conformity with IFRS Accounting Standards, the Group classifies as internally generated intangible assets the expenses incurred in the development of projects that meet the following conditions: y The expenditure is specifically identified and controlled by project, and its distribution over time is clearly defined. y The Directors have well-founded reasons for believing that there are no doubts as to the technical success or the economic and commercial viability of the projects, on the basis of their level of completion and order book. y The Group has the necessary technical, financial and other resources to complete the development work. y The development cost of the asset, which includes, where appropriate, the personnel expenses of the Group’s personnel working on the projects, can be measured reliably. Internally generated intangible assets are amortised on a straight-line basis over the period that they are expected to generate income, which is generally five years. The technical, economic and financial potential of each project is reviewed at each year-end. If a project is progressing negatively or if there are no financing plans to assure effective completion, the related amount is charged to income in full. Where no internally generated intangible asset can be recognised, development expenditure is accounted for as an expense in the year in which it is incurred. The Group has recognised the work performed on its intangible assets in relation to the development of new technologies for which there is a high probability of technical and economic success as a decrease in the income statement headings which reflect the carrying amount of capitalised expenses for an amount of €3,053 thousand (2023: €2,948 thousand). The amounts capitalised during the year mainly relate to projects aimed at improving aluminium scrap treatment processes, developed by the subsidiary Befesa Aluminio, S.L., amounting to €1,897 thousand, and to a project in Befesa Holding US, Inc. focused on converting a residue into a new product for reuse in production, amounting to €1,156 thousand (2023: the capitalised amounts primarily related to projects aimed at improving aluminium scrap treatment processes, developed by Befesa Aluminio, S.L.). Computer software The acquisition and development costs incurred in relation to the basic computer systems used in the management of the Group are recognised with a charge to “Other intangible assets” in the consolidated financial statement. Computer system maintenance costs are recognised with a charge to the consolidated income statement for the year in which they are incurred. Computer software is amortised on a straight-line basis over the useful life of the assets (five years). Concessions, patents, licences and similar items In general, the amounts recognised by the Group in connection with concessions, patents, licences and similar items relate to the cost incurred in acquiring them, which is amortised on a straight-line basis over the estimated useful life based on the concession arrangement. The capitalised concessions have a maximum estimated useful life of 25 years. Licences acquired in a business combination are recognised at fair value at the acquisition date and have an indefinite useful life. Licences with an indefinite useful life are tested for impairment at least annually (Note 8). The useful life, in accordance with IAS 38, is considered indefinite due to the fact that those licences represent the amount that any producer willing to enter the market at any moment would have to pay in order to obtain the needed environmental authorisation to start the activity and have no maturity . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 216 Befesa Annual Report 2024 3.6 Property, plant and equipment Property, plant and equipment are recognised at acquisition cost less any accumulated depreciation and any recognised impairment losses. However, prior to the date of transition to IFRS Accounting Standards, the Group revalued certain items of property, plant and equipment as permitted by the applicable legislation. In accordance with IFRS Accounting Standards, the Group considered the amount of the restatements as part of the cost of the assets. The costs of expansion, modernisation or improvements, leading to increased productivity, capacity or efficiency or to a lengthening of the useful lives of the assets, are capitalised. Repairs that do not lead to a lengthening of the useful life of the assets and maintenance expenses are charged to the consolidated income statement for the year in which they are incurred. In-house work on non-current assets is recognised at accumulated cost (external costs plus in-house costs, determined on the basis of in-house warehouse materials consumption and manufacturing costs allocated using hourly absorption rates, similar to those used for inventory valuation). In 2024, €68 thousand was recognised in this regard (2023: €2,055 thousand, primarily related to works carried out by Befesa Salzschlacke GmbH for the reconstruction of the plant following the 2021 fire) (Note 22.3). The work performed by the Group on its property, plant and equipment is recognised under “Other operating income” in the consolidated income statement. The Group depreciates property, plant and equipment using the straight-line method (land is not subject to depreciation), distributing the cost of the assets over the following years of estimated useful life: Average years of estimated useful life Buildings 16–50 Plant and machinery 10–35 Other property, plant and equipment 4–10 Because the Group has to meet certain costs in relation to the closure of its facilities, the accompanying consolidated financial statement includes the provisions raised for such costs (Note 18). Assets’ residual values and useful lives are reviewed, and adjusted as appropriate, at each consolidated financial statement date. Gains and losses on disposals are determined by comparing the proceeds to the carrying amount of the items sold. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 9) . 3.7 Leases Identification of a lease At the inception of a contract, the Group assesses whether it contains a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for a consideration. The period of time during which the Group uses an asset includes consecutive and non-consecutive periods of time. The Group reassesses the conditions if the contract is changed. Lessee accounting For contracts that contain one or more lease components and non-lease components, the Group considers all the components as a single lease component. The right-of-use asset comprises the amount of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs incurred and an estimate of dismantling and restoration costs to be incurred, as described in the accounting policy for provisions . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 217Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied continued The Group measures the lease liability at the present value of the lease payments that are not made at the commencement date. The Group discounts the lease payments using the appropriate incremental borrowing rate, unless the interest rate implicit in the lease can be reliably determined. In this regard, for initial measurement of the lease liability, the incremental borrowing rate has been used, which represents the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment (2–5%). Pending lease payments comprise fixed payments, less any lease incentives receivable, variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date, amounts expected to be payable by the lessee under residual value guarantees, the exercise price of the purchase option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The Group measures the right-of-use asset at cost, less any accumulated depreciation and any accumulated impairment losses, adjusted for any remeasurement of the lease liability. If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the right-of-use asset includes the price of the purchase option, the lessee will depreciate the right-of-use asset following the depreciation criteria for property, plant and equipment from the commencement date of the lease to the end of the useful life of the underlying asset. Otherwise, the lessee will depreciate the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset and the end of the lease term. The Group measures the lease liability by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Group recognises remeasurements of the lease liability as an adjustment to the right-of-use asset, until this is reduced to zero and then in profit or loss. A lessee will remeasure the lease liability by discounting the revised lease payments using a revised discount rate if there is a change in the lease term or a change in the assessment of an option to purchase the underlying asset. The Group remeasures the lease liability if there is a change in the amounts expected to be payable under a residual value guarantee or a change in an index or a rate used to determine those payments, including a change to reflect changes in market rental rates following a market rent review . 3.8 Non-financial asset impairment At each reporting date, the Group reviews non-financial assets to determine if there is any indication that they might have undergone an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset itself does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the CGU to which the asset belongs. In addition, at each statement of financial position date, the possible impairment of goodwill and of any intangible assets that have not yet come into operation or which have an indefinite useful life is analysed. The recoverable amount is the higher of fair value, less costs to sell and value in use, which is taken to be the present value of the estimated future cash flows. In order to calculate value in use, the assumptions used include discount rates, growth rates and forecast changes in selling prices and costs. The Directors estimate post-tax discount rates, which reflect the time value of money and the risks specific to the CGU. The growth rates and the changes in selling prices and costs are based on in-house and industry forecasts, and experience and future expectations, respectively . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 218 Befesa Annual Report 2024 If the recoverable amount of an asset is less than its carrying amount, an impairment loss is recognised for the difference, with a charge to “Amortisation/Depreciation, impairment and provisions” in the consolidated income statement. Impairment losses recognised for an asset in prior years are reversed, with a credit to the aforementioned heading when there is a change in the estimates concerning the recoverable amount of the asset, increasing the carrying amount of the asset, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised, except in the case of the impairment of goodwill, which cannot be reversed . 3.9 Financial instruments Recognition and classification of financial instruments Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial asset, a financial liability and an equity instrument in IAS 32 “Financial Instruments: Presentation”. For measurement purposes, the Group classifies financial instruments in the following categories of financial assets and financial liabilities according to the business model and the characteristics of the contractual cash flows. y Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows solely represent payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in the income statement and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the consolidated income statement. This category includes the loans, trade and other receivables, and security deposits. y Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows solely represent payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in the income statement. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to the income statement and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as a separate line item in the consolidated income statement. This category corresponds with the hedging derivatives. y Fair value through profit or loss (FVPL): Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in the income statement and presented net in other gains/(losses) in the period in which it arises. This category includes the factoring and equity instruments. The business model is determined by key Group personnel and on one level reflects the manner in which they jointly manage groups of financial assets to reach a specific business objective. The Group’s business model represents the manner in which it manages its financial assets to generate cash flows. The Group initially designates a financial liability at FVPL if doing so eliminates or significantly reduces an inconsistency in the measurement or recognition that would otherwise arise if measurement of the assets of liabilities or recognition of the results thereof were made on different bases, or if a group of financial liabilities or financial assets and financial liabilities is managed, and their return is evaluated, based on fair value, in accordance with an investment strategy or documented risk management strategy, and information on this group is provided internally on the same basis to the Group‘s key management personnel. The Group classifies the remaining financial liabilities, except financial guarantee contracts, commitments to extend below-market rate loans and financial liabilities resulting from a transfer of financial assets that do not qualify for derecognition or are recognised using the continued involvement approach, as financial liabilities at amortised cost . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 219Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied continued Measurement At initial recognition, the Group measures a financial asset and financial liability at its fair value, plus, in the case of a financial asset not at FVPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in the consolidated statement of income statement. Financial assets with embedded derivatives are considered in their entirety when determining if their cash flows are solely payment of principal and interest. Subsequent measurement of debt instruments, financial assets and financial liabilities depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. Impairment The Group recognises an impairment loss for expected credit losses on financial assets at amortised cost, FVOCI, lease finance receivables, contractual assets, loan commitments and financial guarantees. For trade receivables, the Group applies the simplified approach permitted under IFRS 9, which requires that expected lifetime losses be recognised from the initial recognition of the receivable. Derecognition, modification and extinguishment of financial assets Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Derecognition and modifications of financial liabilities The Group derecognises all or part of a financial liability when it either discharges the liability by paying the creditor or is legally released from primary responsibility for the liability, either by a process of law or by the creditor. The exchange of debt instruments between the Group and the counterparty or substantial modifications of initially recognised liabilities are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, providing the instruments have substantially different terms. The Group considers the terms to be substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the exchange is accounted for as an extinguishment of the original financial liability, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange is not accounted for as an extinguishment, the modified flows are discounted at the original effective interest rate, and any difference in the previous carrying amount is recognised in the income statement. Any costs or fees incurred adjust the carrying amount of the financial liabilities and are amortised using the amortised cost method over the remaining term of the modified liability. The Group has contracted reverse factoring facilities with various financial institutions to manage payments to suppliers. The Group applies the above criteria to determine if it should derecognise the original trade payable and recognise a new liability with the financial institutions. Trade payables settled under the management of financial institutions are recognised under trade and other payables only if the Group has transferred management of the payment to the financial institutions but retains primary responsibility for settling the debt with the trade creditors. At 31 December 2024, the amount is €1,394 thousand (2023: €2,176 thousand). The Group does not identify any type of material liquidity risk related to these reverse factoring agreements. Despite this, the Group uses only entities that have been given a high independent credit rating and have proven solvency on the market. Factoring receivables Befesa derecognises trade receivables for the amount transferred to financial institutions, providing the factor assumes all the risk of insolvency and default (non-recourse factoring). At 31 December 2024 and 2023, balances receivable not due, which were extinguished as a result of the aforementioned non-recourse factoring operations, amounted to €61,466 thousand and €49,894 thousand, respectively. Unlike above, Befesa does not derecognise amounts receivable transferred to financial institutions for which it substantially retains the associated risks . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 220 Befesa Annual Report 2024 3.10 Hedge accounting Derivative financial instruments are initially recognised using the same criteria as for financial assets and financial liabilities. Derivative financial instruments that do not qualify for hedge accounting are classified and measured as financial assets and financial liabilities at fair value through profit or loss. Derivative financial instruments that qualify for hedge accounting are initially measured at fair value, plus any transaction costs that are directly attributable to the acquisition, or less any transaction costs directly attributable to the issue of the financial instruments. Nonetheless, transaction costs are subsequently recognised in profit and loss as they do not form part of the changes in the effective value of the hedge. At the inception of the hedge, the Group formally designates and documents the hedging relationships and the objective and strategy for undertaking the hedges. This documentation includes identifying the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group measures hedge effectiveness. Hedge accounting applies only when there is an economic relationship between the hedged item and the hedging instrument. The effect of credit risk does dominate the value changes that result from that economic relationship, and the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually uses to hedge that quantity of hedged item. However, that designation does not reflect an imbalance between the weightings of the hedged item and the hedging instrument that would create hedge ineffectiveness, irrespective of whether or not it is recognised, which could result in an accounting outcome that would be inconsistent with the purpose of hedge accounting. For cash flow hedges of forecast transactions or a component thereof, the Group assesses whether these transactions are highly probable and if they present an exposure to variations in cash flows that could ultimately affect profit or loss for the year. At the inception of the hedging relationship, and on an ongoing basis, the Group evaluates if the relationship meets the effectiveness qualifying criteria prospectively. The Group assesses the effectiveness at each accounting close or when there are significant changes affecting the effectiveness requirements. The Group performs a qualitative assessment of effectiveness, providing that the fundamental conditions of the instrument and the hedged item are the same. When the fundamental conditions are not exactly the same, the Group uses a hypothetical derivative with fundamental conditions equivalent to the hedged item to assess and measure efficiency. The Group records changes in the time value of the options, hedging an item related to a transaction in other comprehensive income. If the hedged item results in the recognition of a non-financial asset or liability, the Group includes the accumulated amount in other comprehensive income with an adjustment to the non-financial asset or liability. For the remaining hedging relationships, the amount deferred in other comprehensive income is reclassified to profit or loss in the same period or periods in which the expected hedged cash flows affect profit or loss. Nonetheless, if the Group expects that part of the amount will not be recovered in one or more future periods, this is immediately recognised in profit or loss. However, if the hedge is interrupted, the amount deferred in other comprehensive income is reclassified immediately to profit or loss. Cash flow hedges The Group recognises the portion of the gain or loss on the fair value measurement of a hedging instrument that is determined to be an effective hedge in other comprehensive income. The ineffective portion and the specific component of the gain or loss or cash flows on the hedging instrument, excluding the measurement of the hedge effectiveness, are recognised under finance income or costs. The separate component of other comprehensive income associated with the hedged item is adjusted to the lesser of the cumulative gain or loss on the hedging instrument from the inception of the hedge and the cumulative change in fair value or present value of the expected future cash flows on the hedged item from the inception of the hedge. However, if the Group expects that all or a portion of a loss recognised in other comprehensive income will not be recovered in one or more future periods, it reclassifies the amount that is not expected to be recovered into finance income or finance expenses . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 221Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied continued If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gains or losses that were recognised in other comprehensive income are reclassified to profit or loss in the same period or periods during which the asset acquired or liability assumed affects profit or loss and under the same caption of the consolidated income statement . 3.11 Cash and cash equivalents This item includes cash on hand, current bank accounts and, where applicable, deposits and reverse repurchase agreements that meet all of the following requirements: y They may be converted into cash. y They have a maturity of three months or less on the date of acquisition. y They are not subject to a significant risk of changes in value. y They form part of the Group’s usual cash management policy. Bank overdrafts are recognised in the consolidated financial statement as current borrowings . 3.12 Inventories “Inventories” in the consolidated financial statement includes the assets that the Group: y holds for sale in the ordinary course of its business; y has in the process of production, construction or development for such sale; or y expects to consume in the production process or in the provision of services. Raw materials and goods held for resale are measured at the lower of FIFO cost and market. Ancillary products, consumables and spare parts are measured at the lower of the price per the last invoice and market value, which does not differ significantly from FIFO cost. Work in progress and finished goods are measured at the lower of market value and average production cost. Average production cost is calculated as the specific cost of the supplies and services plus the applicable portion of the direct and indirect cost of labour and general manufacturing expenses. Other warehouse materials are measured at the lower of average acquisition cost and market value. Obsolete, defective or slow-moving materials have been reduced to their net realisable value . 3.13 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are presented in equity as a deduction, net of taxes, from resources obtained. Where any Group company purchases the Company’s share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to equity holders of the Company until the shares are cancelled, reissued or sold. Where such shares are subsequently disposed of or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity owners . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 222 Befesa Annual Report 2024 3.14 Provisions, contingent liabilities and contingent assets In the preparation of the consolidated financial statements, the Parent’s Directors drew a distinction between the following: y Provisions: Credit balances covering present obligations at the consolidated financial statement date arising from past events that could give rise to a loss for the companies, which are certain as to their nature but uncertain as to their amount and/or timing. y Contingent liabilities: Possible obligations arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of the consolidated companies and which do not meet the requirements for recognition as provisions. y Contingent assets: Possible assets that arise from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of the entities. The Group recognises provisions for the estimated amount required to suitably meet its liability, whether it is legal or constructive, probable or certain, arising from contingencies, litigation in process or obligations, which arise as a result of past events, for which it is more probable than not that an outflow of resources will be required, provided that it is possible to make a reasonable estimate of the amount in question. Provisions are recognised when the liability or obligation arises with a charge to the relevant heading in the consolidated income statement, based on the nature of the obligation, for the present value of the provision when the effect of discounting the obligation is material. Provisions for pensions and similar obligations Several Group companies have certain defined benefit obligations with their employees to supplement social security retirement pensions. These obligations had been externalised at 31 December 2024 and 2023. Subsidiaries’ obligations as pension plan promoters are established in the contribution of a percentage of employees’ pensionable salaries. These commitments are not significant on a Group scale . Dismantling, restoration and similar provisions In addition to the above, “Long-term provisions” in the accompanying consolidated financial statement also include, where applicable, the estimated amounts required to close certain facilities (Note 18), and the estimated amounts required to settle any liability that might arise from ongoing litigation and other significant obligations, when it is considered more probable than not that these obligations will have to be met, whereas any contingent liabilities (possible obligations that arise from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of Befesa) are not recognised in the consolidated financial statements, but rather are disclosed, as required by IAS 37 (see Note 22). Share-based payments The fair value of options granted under share-based compensation plans is recognised as an employee benefits expense with the corresponding increase in long-term liabilities. For cash-settled share-based payment transactions, the Group measures the goods or services acquired and the liability incurred at the fair value of the liability. Until the liability is settled, the Group remeasures the fair value of the liability at the end of each reporting period, with any changes in fair value recognised in the consolidated income statement. Services received or goods acquired, and the liability payable are recognised over the vesting period or immediately if vesting is immediate. The Group only recognises as personnel expenses the amount accrued in accordance with the vesting conditions of the fair value of the payment on the grant date, and the residual amount accrued is recognised as finance income or expense . 3.15 Revenue recognition a) Sale of goods Sales of Waelz oxide (WOX) and green zinc (Special High Grade, also known as SHG) and secondary aluminium are recognised when control of the products is transferred to the customers, mainly manufacturing companies, when the customer has full discretion over the products and there is no unfulfilled obligation that could affect the client’s acceptance of the products. Delivery occurs depending on the specific agreements with customers (incoterm), the risks of obsolescence and loss have been transferred to the customer, and the Group has evidence that all criteria for acceptance have been satisfied . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 223Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied continued Revenue is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due. The Group acts as the principal in all sales transactions. In addition, the Group has determined that its contracts with customers do not contain a significant financing component and Group sales have no variable component. No critical judgements in recognising revenue are identified. In relation to the revenue recognition of sales, the Group considers that under IFRS 15 there is only one kind of contract with customers. The assessment is supported by the fact that the main sales of the Group’s products have only one performance obligation: the delivery of WOX, green zinc “SHG” or secondary aluminium. Furthermore, the products are not dependent on or connected to other products or services. Consequently, as there are no delayed performance obligations, the revenue is recognised fully after passing control to the customer. The performance obligations for this type of sale reflect the delivery of distinct goods defined in each contract and the price of each delivery is established in each separate contract, having been indexed to various market variables on the payment dates. b) Sale of services Revenue from customer contracts is recognised based on the amount expected to be received from the customer when the transfer of control of a customer service occurs. Control transfer can occur at a specific time or over time. The performance obligations for this type of sale correspond to the collection of waste, the collection of the salt slags and SPLs, and the delivery of the defined product in each technology contract. The Group considers that the performance obligation related to this type of service is satisfied at a specific point in time except for technology contract sales, where the performance obligation is satisfied over time. The price of each service is established in each separate contract. Each contract has a unique performance obligation, which means that the price is estimated on an individual contract basis. A contract is not considered to contain a significant financing component when the period between when the customer’s committed service is transferred and when the customer pays for that service is one year or less. There are no incremental costs for any of this type of rendering of services to secure the contract. Consequently, as there are no delayed performance obligations, the revenue is recognised fully after passing control to the customer. Based on this, the Group discloses revenue by reporting segment and geographical area (Note 5). The different type of services provided by Befesa are: Steel Business Services In the Steel Dust Recycling Services segment, the Group collects and recycles crude steel dust and other steel residues generated in the production of crude, stainless and galvanised steel through EAF steel production. The Group sells the WOX produced in the recycling of crude steel dust to zinc smelters and, to a lesser extent, returns metals – mainly nickel, chromium and molybdenum – recovered in the recycling of stainless steel residues to stainless steel producers for a tolling fee or sells such recovered metals on the marke t. Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 224 Befesa Annual Report 2024 In this segment, in addition to the Group revenues from the sales of WOX, the other revenue sources are: y The service fees the Group charges for collecting and recycling crude steel dust. The performance obligations for this type of sale correspond to the collection of waste as defined in each contract; the price of the service is established in each separate contract. y The tolling fees the Group charges for collecting and recycling stainless steel residues and for returning the recovered metals to the stainless steel producers. Most of the services of this type are with the return of recovered metals. If there are no returns, the service is the same as in the previous point (collecting). The performance obligations for this type of sale correspond to waste collection. The Group invoices customers a tolling/conversion fee per tonne of dust treated. The plant receives stainless steel dust from its customers, treats this dust and returns the alloys contained in this dust to the customers. Collection of salt slags and SPLs In the Salt Slags operations of the Aluminium Salt Slags Recycling Services segment, the Group recycles salt slags that it receives from customers for a service fee or generates during its own production of secondary aluminium. In addition, the Group recycles SPLs generated by primary aluminium producers. The basis for the Aluminium Salt Slags Recycling Services segment is the secondary aluminium production market in Europe. The secondary aluminium production market produces salt slags, which are categorised as a hazardous waste in Europe and other markets. The performance obligations for this type of sale reflect the collection of the salt slags and SPLs. The treatment price per tonne is a fixed price indicated in each contract, based on the tonnes received during the year. Technology division The Secondary Aluminium subsegment has a small technology division which designs, constructs, assembles and starts up the facilities so that they are ready for use in the aluminium, zinc and lead cast houses. The performance obligation for this type of sale reflects the delivery of the defined product in each contract, with each contract containing a purchase order with all of the specifications of the project and a fixed price for it. Note 13 to the consolidated financial statements for 2024 reflects a breakdown of “Contract assets” at 31 December 2024, which amounts to €4,839 thousand (2023: €6,468 thousand) . c) Interest income Interest income is accrued on a time-proportion basis by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s carrying amount. d) Income from dividends Income from dividends is recognised when the shareholder’s right to receive payment is established . 3.16 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of assets, in accordance with IAS 23 for assets that necessarily take a substantial period of time to be prepared for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in the consolidated income statem ent in the year in which they are incurred . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 225Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied continued 3.17 Foreign currency Foreign currency transactions, balances and cash flows Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies have been translated into euros at the foreign exchange rate ruling at the financial statement date, whereas non-monetary assets and liabilities valued at historical cost are translated at the rates prevailing at the transaction date. For these purposes, advances to suppliers and customers are deemed non-monetary items and are translated at the exchange rate on the date the payment or collection took place. Subsequent recognition of the receipt of the inventories or the advance on the income from sales is translated at the original exchange rate and not at the transaction date. Non-monetary assets measured at fair value have been translated into euros at the exchange rate at the date that the fair value was determined. Exchange gains and losses arising on the settlement of foreign currency transactions and the translation into euros of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Translation of foreign operations Foreign operations whose functional currency is not the currency of a hyperinflationary economy have been translated into euros as follows: y Assets and liabilities, including goodwill and net asset adjustments derived from the acquisition of the operations, including comparative amounts, are translated at the closing rate at the reporting date. y Income and expenses, including comparative amounts, are translated at the exchange rates prevailing at each transaction date. y All resulting exchange differences are recognised as translation differences in other comprehensive income. Translation differences recognised in other comprehensive income are accounted for in profit or loss as an adjustment to the gain or loss on the sale using the same criteria as for subsidiaries. Foreign operations in hyperinflationary economies The financial statements of Group companies whose functional currency is the currency of a hyperinflationary economy are restated in terms of the measuring unit at the reporting date. If the reporting date of the consolidated companies’ financial statements is different to that of the Company, the former is adjusted to the measuring unit at the Group’s reporting date. The results and financial position of the Group’s foreign operations whose functional currency is the currency of a hyperinflationary economy are translated into euros as follows: y Assets and liabilities, including goodwill and net asset adjustments derived from the acquisition of the operations, assets and liabilities, income and expenses, and cash flows, are translated at the closing rate at the most recent reporting date. y Comparative amounts are those that were included in the prior year’s consolidated annual accounts and are not adjusted for subsequent changes in the price level or in exchange rates. The effect of the adjustment on the prior year’s balances is recognised as a revaluation reserve in other comprehensive income/translation differences in other comprehensive income/reserves under equity. Given the economic situation in Turkey, and in accordance with the definition of a hyperinflationary economy established in IAS 29, the country has been considered hyperinflationary since 1 January 2022. The Group holds investments in Turkey through the subsidiaries Befesa Silvermet İskenderun Çelik Tozu Geri Dönüşümü, A.S. and Befesa Silvermet Dış Ticaret, A.S . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 226 Befesa Annual Report 2024 An application of IAS 29 for the first time in Turkey in the Group’s 2022 consolidated annual accounts was carried out in accordance with the following criteria: y The comparative figures for 2021 were not subject to modification. y Hyperinflationary accounting was applied to all assets and liabilities of subsidiaries before conversion. y The historical cost of non-monetary assets and liabilities and the different equity items of those companies was adjusted from the date of acquisition or incorporation into the consolidated statement of financial position until the end of the year to reflect the changes in the purchasing power of the currency resulting from inflation. y The initial equity presented in the stable currency is affected by the cumulative effect of restatement for inflation of non- monetary items from the date they were recognised for the first time and the effect of converting these balances at the closing rate at the beginning of the year. The effect of hyperinflation in the Turkish subsidiaries on the consolidated equity of the Group is €3.2 million and the “gains on the net monetary position” amounts to €5.2 million (2023: €4.4 million and the “gains on the net monetary position” amounts to €3.9 million), recognised under net exchange differences in the consolidated income statement for the year ended 31 December 2024 and 31 December 2023. 3.18 Income tax, deferred tax assets and deferred tax liabilities Expense for income tax and other similar taxes applicable to the foreign consolidated entities is recognised in the consolidated income statement, except when it results from a transaction the result of which is recognised directly in equity, in which case the related tax is also recognised in equity. Current income tax expense is calculated by aggregating the current tax arising from the application of the tax rate to the taxable profit (tax loss) for the year, after deducting allowable tax credits, plus the change in deferred tax assets and liabilities, and any tax loss and tax credit carry-forwards and deductions. Deferred tax assets and liabilities include temporary differences measured at the amount expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities and their tax bases, and tax loss and tax credit carry-forwards. These amounts are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled. Deferred tax liabilities are recognised for all taxable temporary differences, unless, in general, the temporary difference arises from the initial recognition of goodwill. In addition, deferred tax assets recognised for tax loss, tax credit carry-forwards and temporary differences are only recognised if it is considered probable that the consolidated companies will have sufficient future taxable profits against which they can be utilised. The Directors have also taken into account the Group’s ability to use tax benefits in different fiscal years, depending on their needs. Deferred tax assets and liabilities recognised are reassessed at each financial statement date in order to ascertain whether they still exist, and the appropriate adjustments are made based on the findings of the analyses performed (see Notes 19 and 20). In view of the Group’s international nature, there are several tax rates, depending on the applicable legislation, ranging mainly from 20% to 33% (2023: 20% to 33%) . 3.19 Environmental matters The Group carries out actions aimed mainly at preventing, reducing or repairing any damage its activities may cause to the environment. The Group recognises environmental investments at acquisition or production cost, net of the related accumulated depreciation/amortisation, and classifies them by nature in the appropriate non-current asset accounts. Expenses incurred in order to comply with the applicable environmental legislation are classified by nature under “Other operating expenses” in the accompanying consolidated income statemen t . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 227Befesa Annual Report 2024 3. Accounting principles and policies and measurement methods applied continued 3.20 Related party transactions The Group performs all its transactions with related parties at arm’s length. In addition, transfer prices are adequately supported and, therefore, the Parent’s Directors consider that there are no material risks in this regard that might give rise to significant liabilities in the future . 3.21 Dividend distribution The distribution of dividends to the Parent Company’s shareholders is recognised as a liability in the Group’s consolidated financial statements in the period in which the dividends are approved by the Parent Company’s shareholders . 3.22 Segment reporting The operating segments are presented consistently with the management approach, in accordance with the information used internally at the highest decision-making level. The maximum authority for decision-making is responsible for assigning resources to operating segments and evaluating the segment’s performance. Segment reporting is disclosed in Note 5. 3.23 Consolidated statement of cash flows The following terms are used in the consolidated statement of cash flows, which has been prepared using the indirect method, with the meanings specified: y Cash flows: Inflows and outflows of cash and cash equivalents, which are short-term, liquid investments that are subject to an insignificant risk of changes in value. y Operating activities: The principal revenue-producing activities of the Group companies and other activities that are not investing or financing activities. y Investing activities: The acquisition and disposal of long-term assets and other investments not included in cash and cash equivalents. y Financing activities: Activities that result in changes in the size and composition of the equity and borrowings that are not operating activities. In the year 2024, the Group changed the presentation criteria for the payment of financial interest, shifting them from being recorded as operating cash flow to financing cash flow. This change is due to management’s view that the financial statements provide more reliable and relevant information about the entity’s cash flows . 3.24 Earnings per share a) Basic earnings per share Basic earnings per share is calculated by dividing: y the profit attributable to the owners of the Company, excluding any costs of servicing equity other than ordinary shares; y the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares. b) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take the following into account: y The post-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares y The weighted average number of additional ordinary shares that would have been outstanding, assuming the conversion of all dilutive potential ordinary share s Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 228 Befesa Annual Report 2024 4. Financial risk management policy The activities carried out by the Group through its business segments are exposed to several financial risks: market risk (including foreign currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The risk management model used by the Group focuses on the uncertainty in financial markets and attempts to minimise the potential adverse effects on the Group’s earnings. Risk management is carried out by the Corporate Financial Department in accordance with internal management rules. This department identifies, assesses and hedges financial risks in close cooperation with the different operating units. The internal management rules provide written policies for global risk management and for specific areas such as foreign currency risk, interest rate risk, liquidity risk, the use of derivative and non-derivative instruments, and the investment of cash surpluses. There were no changes in risk management policies between 2024 and 2023. 4.1 Financial risk factors a) Market risk i) Foreign currency risk The Group companies operate internationally and are therefore exposed to foreign currency risks in foreign currency transactions (especially the US dollar). To control the foreign currency risk that arises from future commercial transactions and recognised assets and liabilities, Group companies use derivative contracts. Foreign currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that it is not the Group’s functional currency. For financial reporting purposes, each subsidiary designates hedges with the Corporate Financial Department as fair value hedges or as cash flow hedges, as appropriate. In addition, at the corporate level, external foreign currency hedges are designated as foreign currency risk hedges on certain assets, liabilities or future transactions. The Group’s main exposures to currency risk at 31 December 2024 and 2023 are shown below. The table reflects the carrying amount of the Group’s financial instruments or classes of financial instruments denominated in foreign currency: 2024 2023 Currency Trade and other receivables Treasury Short-term loans and borrowings Trade and other payables Trade and other receivables Treasury Short-term loans and borrowings Trade and other payables USD 15,377 12,540 6,264 3,139 8,968 4,945 8, 511 3,328 EUR 5,411 3,324 – 1,084 4,665 816 – 1,985 Other 292 – – 45 14 - – 62 Total 21,080 15,864 6,264 4,268 13,647 5,761 8,511 5,375 If the average exchange rate of the euro in 2024 and 2023 had depreciated or appreciated by 10% on all functional currencies other than the euro, with the other variables remaining constant, results for the year would not have changed significantly. The US dollar is the primary currency to which the Group is exposed. If, as at 31 December 2024, the euro had appreciated or depreciated by 10% against the dollar, while all other currencies and variables remained constant, the equity attributable to the Parent Company would have fluctuated by approximately €61 million. ii) Cash flow and fair value interest rate risk The Group’s interest rate risk mainly arises from variable interest financial debt. To manage interest rate risk, in certain situations the Group uses floating-to-fixed interest rate swaps (“IRSs”), either for the total amount or a portion of the loan and either for the full term or a portion thereof. In 2024 and 2023, had the average interest rates on the financial debt denominated in euros increased or decreased by 50 basis points, with all the other variables remaining constant, the profit after tax for the year would not have been significantly affected as a result of the hedging policies in place . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 229Befesa Annual Report 2024 4. Financial risk management policy continued The exposure of the Group’s financial debt to variations in interest rates is set out below: 2024 2023 Total external financial debt (Note 15) 721,476 710,771 Effect of interest rate swaps (Note 17) (316,000) (316,000) Financial debt subject to variable interest 405,476 394,771 iii) Price risk Earnings in the Steel Dust, Salt Slags and Secondary Aluminium segments are exposed to the movement of recycled metal prices (zinc and aluminium). The Group manages price risk through the acquisition of commodity swaps. Befesa’s target in the Steel Dust Recycling Services segment is to hedge between 60% and 75% of the sale transactions, which are subject to the risk of changes in selling prices. The objective of the Group is to secure a certain level of revenues that will ensure a reasonable return, given the risk of decline that these revenues may face in the event of a fall in zinc prices, which accounts for 85% of the price of the product sold (WOX). The Group uses zinc futures contracts at the London Metal Exchange (LME), hedging between 60% and 75% of the estimated sales, therefore the likelihood of the hedged transaction being executed is almost 100%, given that, due to the nature of the business, the sale of the entire production is assured. Establishing this limit protects the business against reductions in production due to once-off events, such as breakdowns, technical shutdowns or other similar circumstances. These financial instruments are initially analysed to assess if they can be treated as hedging instruments and, if so, the accounting rules specific to these instruments may be applied. Note 17 contains a breakdown of derivative financial instruments arranged on the selling prices of these metals . b) Credit risk Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortised cost and at FVOCI, favourable derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables. Regarding cash and cash equivalents, the Group’s credit policy is to use only entities that have been given high independent credit ratings. Most of the balances are held in credit institutions located in the eurozone, mainly in Spain and Germany, with their credit risk rated at least BBB or above. Most receivables and work in progress relate to several customers in various industries and countries. In most cases, the contracts provide for progress billings, billings at the beginning of the provision of service or billings upon delivery of the product. It is standard practice for the Group to reserve the right to cancel projects in the event of any material breach and, in particular, of default on payment. In addition, under most contracts the Group has a firm commitment from several banks for the acquisition, without recourse, of receivables. Under these agreements, the Group pays a fee to the banks for assuming its credit risk, plus interest and a spread on the financing received. In all cases, the Group assumes liability for the validity of the receivables. In this regard, factored receivables are recognised from the consolidated financial statement, provided that all the conditions established in IFRS 9 are met for their derecognition from the consolidated financial statement. An analysis is performed to determine if the risks and rewards inherent to ownership of the related financial assets have been transferred, comparing the Group’s exposure to changes in the amounts and timing of net cash flows from the transferred asset before and after the transfer. Once the exposure of the Group factoring the receivables to these changes has been eliminated or substantially reduced, the financial asset in question is deemed to have been transferred . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 230 Befesa Annual Report 2024 In addition, some Group companies work with insurance companies that establish the credit guaranteed, normally insuring around 95% of the risk hedged in case of insolvency. The Finance Department continually seeks to adjust the limits granted to business needs. The Group allows for an acceptable level of commercial risk, which is established based on each specific customer, market and circumstance (history of non-payment and solvency, among others). Consequently, regarding the balance of trade and other receivables, the potential effect of trade receivables, for which there are factoring agreements, would have to be excluded, as well as the effect of other trade receivables that can be factored but which have not yet been sent to the factor at year-end and assets that are covered by credit insurance and that are reflected in this balance. Through this policy, the Group minimises its credit risk exposure in relation to these assets. At 31 December 2024, the amount subject to credit risk amounts to €102,429 thousands (€75,818 thousands at 31 December 2023). Trade and other receivables, other receivables, current financial assets and cash are the Group’s main financial assets and represent its maximum exposure to credit risk, in the event that the counterparty does not meet its obligations . c) Liquidity risk The prudent management of liquidity risk entails the maintenance of sufficient cash and marketable securities, the availability of financing through a sufficient level of committed credit facilities and the capacity to settle market positions. Given the dynamic nature of the core businesses, the Group’s Treasury Department has the objective of maintaining flexible financing through the availability of committed credit lines. Management monitors the Group’s liquidity reserve projections and changes in net borrowings, calculated as follows at 31 December 2024 and 2023: 2024 2023 Cash and cash equivalents 102,520 106,692 Other current financial assets adjusted by non-cash items (Note 10) – 71 Undrawn credit facilities and unused financing (Note 15) 100,000 75,000 Liquidity reserve 202,520 181,763 Financial debt (Note 15) 689,508 684,408 Finance lease payables (Note 15) 31,968 26,363 Cash and cash equivalents (102,520) (106,692) Other current financial assets adjusted by non-cash items (Note 10) – (71) Net debt (Note 2.6) 618,956 604,008 Less non-current borrowings (Note 15) (684,561) (672,690) Current net financial debt (65,605) (68,682) One of the Group’s strategic objectives is the optimisation and most efficient possible use of its assets and resources assigned to the business. Therefore, the Group pays special attention to the net operating working capital invested in it. In this respect, as in previous years, during 2024 and 2023 the Group made significant efforts to control and reduce collection periods with customers and other debtors, and to optimise payment terms, thereby unifying policies and conditions across the Group . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 231Befesa Annual Report 2024 4. Financial risk management policy continued The table below presents an analysis of the financial liabilities that will be settled, which are grouped to reflect the term remaining from the date of the financial statements to contractual maturity. This breakdown does not include long-term provisions (Note 18). Within 1 year Between 1 and 2 years Between 2 and 5 years More than 5 years At 31 December 2024 Bank borrowings and lease liabilities (Note 15) 36,915 22,274 659,293 2,994 Other financial liabilities (derivatives) 26,162 16,151 56 – Trade and other payables () 237,186 1,387 – – Unaccrued interest payable 32,928 32,018 86,171 1,581 At 31 December 2023 Bank borrowings and lease liabilities (Note 15) 38,081 21,720 647,589 3,381 Other financial liabilities (derivatives) 2,229 – – – Trade and other payables () 216,724 1,533 1,219 – Unaccrued interest payable 30,191 24,226 15,810 1,167 () Long-term payables do not include capital grants amounting to €3.5 million and €3.9 million in 2024 and 2023, respectively . d) Capital risk The Group manages its equity investments to ensure that its subsidiaries have a guarantee of continuity in terms of their assets and financial position, maximising shareholder return by optimising the structure of equity and liabilities on the liabilities side of the subsidiaries’ financial statements. Capital management is the responsibility of the Group’s Management Committee, whose approach focuses on increasing the value of the business in the long term for shareholders and investors as well as for employees and customers. The objective is to achieve constant, sustained results through organic and, where necessary, inorganic growth. For this purpose, a balance in the businesses is required, with control of financial risks, combined with the necessary financial flexibility to achieve such objectives. The Group’s capital management policy focuses on achieving a financial structure that optimises the cost of capital while maintaining a solid financial position. This policy makes the creation of value for the shareholders compatible, with access to financial markets at a competitive cost in order to cover both debt-refinancing requirements and the investment plan financing needs not covered by the funds generated by the business. Details of the debt/equity ratios (excluding balances with Group companies) as at 31 December 2024 and 2023 are as follows: 2024 2023 Total bank borrowings and lease liabilities (Note 15) 721,476 710,771 Less: Cash and cash equivalents (102,520) (106,692) Other current financial assets adjusted by non-cash items (Note 10) – (71) Net debt 618,956 604,008 Total equity 845,737 877,356 Total capital invested 1,464,693 1,481,364 Borrowing ratio 42.3% 40.8% For a detailed definition of net debt, please refer to Note 2.6 . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 232 Befesa Annual Report 2024 4.2 Fair value estimation IFRS 13 establishes as fair value the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date, whether it is observable or has been estimated using a valuation technique. For this purpose, consistent data with features that market participants would consider in the transaction are selected. IFRS 13 maintains the principles of the other standards while setting the full framework for fair value measurement when it is mandatory under other IFRSs and establishes the additional information to be disclosed about fair value measurements. The requirements of IFRS 13 are met by the Group in the fair value measurement of assets and liabilities when fair value is required by other IFRSs. For financial assets and liabilities not valued at fair value, the Group breaks down the possible impacts between the fair value and the amortised cost if the impact is significant (Note 10). Based on the content of IFRS 13 and in accordance with IFRS 7 on financial instruments measured at fair value, the Group reports on estimating the fair value hierarchy levels as follows: y Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) y Inputs other than quoted prices included in Level 1 that are observable either directly (i.e. reference prices) or indirectly (i.e. derived from prices) (Level 2) y Inputs for the asset or liability that are not based on observable market data (unobservable market data) (Level 3) The table below shows the Group’s assets and liabilities that were measured at fair value at 31 December 2024 and 2023: 2024 Level 2 2024 Assets – Derivatives (Note 17) 11,256 11,256 Total assets at fair value 11,256 11,256 Liabilities – Derivatives (Note 17) 42,369 42,369 Total liabilities at fair value 42,369 42,369 2023 Level 2 2023 Assets – Derivatives (Note 17) 44,697 44,697 Total assets at fair value 44,697 44,697 Liabilities – Derivatives (Note 17) 2,229 2,229 Total liabilities at fair value 2,229 2,229 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 233Befesa Annual Report 2024 4. Financial risk management policy continued a) Financial instruments Level 2 The fair value of financial instruments not traded in an active market is determined using valuation techniques. The Group employs a variety of methods such as estimated discounted cash flows and uses assumptions based on the market conditions at each financial statement date. If all significant data required to calculate the fair value of an instrument are observable, the instrument is included in Level 2. Specific techniques for measuring financial instruments include the following: y The fair value of interest rate swaps is calculated as the present value of future estimated cash flows. y The fair value of currency forwards is determined using forward exchange rates quoted in the market at the consolidated financial statements date. y It is assumed that the book value of trade payables and receivables approximates their fair value. y The fair value of financial liabilities for financial reporting purposes is estimated by discounting future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The instruments included in Level 2 relate to derivative financial instruments (Note 17). 5. Segment reporting The Board of Directors is ultimately responsible for making the Group’s operational decisions, as the Board functions as the Chief Operating Decision-Maker (CODM). The Board of Directors reviews the Group’s internal financial information in order to assess its performance and allocate resources to the segments. The Board of Directors analyses the business based on the segments indicated: y Steel Dust Recycling Services (“Steel Dust”) y Aluminium Salt Slags Recycling Services – Salt Slags Recycling (“Salt Slags”) – Secondary Aluminium Production (“Secondary Aluminium”) These segments correspond to the Group’s principal activities (products and services), the sales of which (fee for the services and/or sale of the recycled waste) determine the Group’s revenue. The Board of Directors assesses the performance of the operating segments, based mainly on operating income before interest and taxes (EBIT), depreciation/amortisation and provisions (EBITDA). The financial information received by the Board of Directors includes finance income and costs tax aspects, cash flow and net debt only on a consolidated basis because this is the way the Group manages them. For a detailed definition of EBIT and EBITDA, please refer to Note 2.6. The accounting policies and measurement bases applied to the information furnished to the Board of Directors are consistent with those applied in the consolidated financial statements . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 234 Befesa Annual Report 2024 a) Segment reporting Set out below is the distribution by segment of EBIT and Adjusted EBIT for the year ended 31 December 2024 and for the year ended 31 December 2023 (thousands of euros). 2024 Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Revenue 825,550 105,874 367,296 (59,690) 1,239,030 Income/Expenses from operations (except revenue, depreciation and amortisation/ depreciation charge and provisions) (663,950) (74,095) (356,116) 59,690 (1,034,471) Amortisation/Depreciation, impairment and provisions (71,037) (11,90 9) (8,318) (439) (91,703) EBIT (operating profit/(loss)) 90,563 19,870 2,862 (439) 112,856 Non-recurrent costs/incomes EBIT (Note 3.17) 2,748 – – – 2,748 Non-recurrent costs/incomes EBITDA (Note 2.6) 8,803 – – – 8,803 Adjusted EBIT (operating profit/(loss)) 102,114 19,870 2,862 (439) 124,407 2023 Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Revenue 785,575 86,318 360,228 (51,521) 1,18 0,60 0 Income/Expenses from operations (except revenue, depreciation and amortisation/ depreciation charge and provisions) (643,373) (61,600) (338,586) 51,769 (991,790) Amortisation/Depreciation, impairment and provisions (64,667) (9,261) (7, 823) (418) (82,169) EBIT (operating profit/(loss)) 77,535 15,457 13,819 (170) 106,641 Non-recurrent costs/incomes EBIT (Note 3.17) 1,906 – – – 1,906 Non-recurrent costs/incomes EBITDA (Note 2.6) (8,111) 1,283 – – (6,828) Adjusted EBIT (operating profit/(loss)) 71,330 16,740 13,819 (170) 101,719 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 235Befesa Annual Report 2024 5. Segment reporting continued The reconciliation of Adjusted EBIT to results attributable to the Parent Company is as follows: 2024 2023 Adjusted EBIT 124,407 101,719 – Non-recurrent costs/(income) EBIT (Note 3.17) (2,748) (1,906) – Non-recurrent costs/(income) EBITDA (Note 2.6) (8,803) 6,828 EBIT (operating profit/(loss)) 112, 856 106,641 Finance income/(cost) (38,006) (38,573) Corporate income tax (20,764) (10,500) Profit/(Loss) attributable to continuing operations 54,086 57,568 Non-controlling interests (Note 14d) (3,266) 404 Profit/(Loss) attributable to the Parent Company 50,820 57,972 Set out below is the distribution by segment of EBITDA and Adjusted EBITDA for the years ended 31 December 2024 and 2023 (thousands of euros): 2024 Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Revenue 825,550 105,874 367,296 (59,690) 1,239,030 Income/Expenses from operations (except revenue, depreciation and amortisation/ depreciation charge and provisions) (663,950) (74,095) (356,116) 59,690 (1,034,471) Amortisation/Depreciation, impairment and provisions (a) (71,037) (11, 90 9) (8,318) (439) (91,703) EBIT (operating profit/(loss)) (b) 90,563 19,870 2,862 (439) 112,856 EBITDA (operating profit/(loss) before amortisation/depreciation and provisions) (a–b) 161,600 31,779 11,180 – 204,559 Non-recurrent costs/incomes (Note 2.6) 8,803 – – – 8,803 Adjusted EBITDA 170,403 31,779 11,180 – 213,362 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 236 Befesa Annual Report 2024 2023 Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Revenue 785,575 86,318 360,228 (51,521) 1,18 0,60 0 Income/Expenses from operations (except revenue, depreciation and amortisation/ depreciation charge and provisions) (643,373) (61,600) (338,586) 51,769 (991,790) Amortisation/Depreciation, impairment and provisions (a) (64,667) (9,261) (7, 823) (418) (82,169) EBIT (operating profit/(loss)) (b) 77,535 15,457 13,819 (170) 106,641 EBITDA (operating profit/(loss) before amortisation/depreciation and provisions) (a–b) 142,202 24,718 21,642 248 188,810 Non-recurrent costs/incomes (Note 2.6) (8 ,111) 1,283 – – (6,828) Adjusted EBITDA 134,091 26,001 21,642 248 181,982 The reconciliation of Adjusted EBITDA to results attributable to the Parent Company is as follows: 2024 2023 Adjusted EBITDA 213,362 181,982 Non-recurrent costs/incomes (Note 2.6) (8,803) 6,828 Amortisation/Depreciation, impairment and provisions (91,703) (82,169) Operating profit/(loss) 112,856 106,641 Finance income/(cost) (38,006) (38,573) Corporate income tax (20,764) (10,500) Profit/(Loss) attributable to continuing operations 54,086 57,568 Non-controlling interests (Note 14d) (3,266) 404 Profit/(Loss) attributable to the Parent Company 50,820 57,972 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 237Befesa Annual Report 2024 5. Segment reporting continued Other segment items included in the consolidated income statement are as follows: 2024 2023 Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Depreciation/ Amortisation charge: – Property, plant and equipment (Notes 9 and 22) (54,266) (7,973) (6,280) (121) (68,640) (53,325) (6,904) (6,192) (111) (66,532) – Intangible assets (Notes 8 and 22) (359) (890) (1,190) (64) (2,503) (421) (908) (728) (69) (2,126) – Right-of-use assets (Notes 11 and 22) (9,664) (1,458) (848) (254) (12,224) (9,608) (1,448) (712) (238) (12,0 06) – Reversal/ (Recognition) of impairment losses and other (Note 22) (6,748) (1,588) – – (8,336) (1,313) (1) (191) – (1,505) Total (71,037) (11,909) (8,318) (439) (91,703) (64,667) (9,261) (7,823) (418) (82,169) Details of segment assets and liabilities are as follows: 2024 2023 Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Assets Intangible assets 687,812 51,069 15,756 3 754,640 670,625 51,105 15,890 53 737,673 Property, plant and equipment 597,088 86,070 52,998 399 736,555 563,452 85,978 52,795 435 702,660 Right-of-use assets 31,026 4,646 1,470 452 37,594 25,879 4,310 1,140 616 31,945 Non-current financial assets and deferred tax assets 61,524 1,926 19,428 35,150 118 , 028 60,495 2,021 27,263 42,067 131,846 Current assets 241,316 12,979 65,746 11,185 331,226 244,045 23,466 61,539 12,511 341,561 Total assets 1,618,766 156,690 155,398 47,190 1,978,043 1,564,496 166,880 158,627 55,682 1,945,685 Equity and liabilities Net assets 652,701 60,916 23,767 108,353 845,737 642,164 85,394 40,359 109,439 877,356 Non-current liabilities 736,461 80,891 60,114 (45,423) 832,043 739,172 65,006 40,427 (33,310) 811,295 Current liabilities 229,603 14,883 71,517 (15,740) 300,263 183,160 16,480 77,841 (20,447) 257,034 Total equity and liabilities 1,618,766 156,690 155,398 47,190 1,978,043 1,564,496 166,880 158,627 55,682 1,945,685 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 238 Befesa Annual Report 2024 Investments in the corresponding year were as follows (excluding the effect of translation differences): 2024 2023 Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Steel Dust Salt Slags Secondary Aluminium Corporate, other minor and eliminations Total Additions to non-current assets (Notes 8 and 9) 68,031 9,232 7,743 98 85,104 76,343 22,910 5,312 25 104,590 Disposals of non-current assets (Notes 8 and 9) (5,012) (20,343) (25,074) – (50,429) (1,833) (122) (1,409) – (3,364) Net investments in the year (Notes 8 and 9) 63,019 (11,111) (17,331) 98 34,675 74,510 22,788 3,903 25 101,226 Investments in non-current assets include additions to property, plant and equipment (see Note 9) and intangible assets (see Note 8). In 2024, disposals mainly relate to the removal of fully amortised assets in the Salt Slags and Secondary Aluminium segments (Note 8 and 9). Inter-segment transfers and transactions (if any) are arranged under the same usual commercial terms and conditions as those that should also be available to unrelated third parties. Details of sales by geographical segment for the years ended 31 December 2024 and 2023 are as follows: Geographical area 2024 % 2023 % Spain 222,216 18% 193,394 16% Germany 133,388 11% 122,949 10% France 53,376 4% 48,985 4% Belgium 52,533 4% 46,717 4% Finland 44,408 4% 54,054 5% Norway 39,256 3% 32,920 3% Italy 31,532 3% 19,339 2% Netherlands 28,166 2% 33,253 3% Sweden 20,212 2% 18,536 2% Portugal 14,638 1% 19,058 2% Rest of Europe 54,741 4% 48,538 4% US 367, 530 30% 371,776 31% Japan 54,162 4% 62,134 5% South Korea 40,121 3% 27,405 2% Brazil 22,292 2% 20,320 2% Australia 16,542 1% 11,015 1% China 12,344 1% 17,643 1% Singapore 8,822 1% 12,400 1% Rest of the world 22,751 2% 20,164 2% 1,239,030 100% 1,180,600 100% 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 239Befesa Annual Report 2024 5. Segment reporting continued The distribution of property, plant and equipment, intangible assets (excluding goodwill and licences) and right-of-use assets is as follows: 2024 2023 US 393,797 351,091 Germany 122,024 119,774 China 93,036 93,961 Spain 84,219 85,139 France 35,407 36,625 South Korea 23,520 27,859 Turkey 17, 991 15,817 Sweden 14,598 14,389 784,592 744,655 b) Information on customers At 31 December 2024, only one customer from the Steel Dust segment represented over 10% of the Group’s total revenues; this customer represents approximately 37% (2023: 35%) of the Group’s total revenues. 6. Business combination Befesa Zinc Recytech, S.A.S. On 1 January 2023, the Group proceeded to re-evaluate control over its French subsidiary Befesa Zinc Recytech, S.A.S. in response to the liquidation procedure of the other partner, Recylex S.A. (see Note 2.5). Befesa Zinc Recytech, S.A.S. was established in 1991 by Befesa Steel Services GmbH (a company belonging to the Group) and Recylex S.A. Both parties holding 50% of the share capital respectively. Its activities consist of recycling steel dust and producing WOX, and until 31 December 2022 the Group considered this agreement as a joint operation. As a result of the liquidation process of the partner Recylex S.A., the latter no longer carries out commercial activities and the Group, throughout the financial year 2023, acquired 100% of the final product of Befesa Zinc Recytech, S.A.S. The main relevant activities related to the business fall under the decisions of the General Director of the Company, which directly depends on the European Chief Executive Officer of the Group and simultaneously has been appointed as General Director of the other French subsidiary. Moreover, given that the Group is in charge of the supply of the dust and is the client at the same time, the latter makes the decisions on these relevant activities. Given this situation, the Group re-evaluated the control it had over this business, concluding that it obtains control over Befesa Zinc Recytech, S.A.S., and therefore becoming consolidated by the global integration method as from 1 January 2023 (Note 2.5). This business generated revenue and a consolidated profit/(loss) of €38,900 thousand and €7,959 thousand, respectively, for the Group (before non-controlling interests) between 1 January 2023 and the end of the reporting period . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 240 Befesa Annual Report 2024 The breakdown of the fair value of the net assets and the excess of net assets over the cost of the combination was as follows: Thousands of euros Consideration transferred – Non-controlling interests 49,543 Fair value of previous investment in the business 49,543 Fair value of net assets acquired (38,793) Goodwill 60,293 The valuation at fair value of 50% of the previous net assets of the Befesa Zinc Recytech, S.A.S. business, which amounted to €29,044 thousand (including a goodwill amount of €9,649 thousand allocable to this business within the Steel CGU), had led to the recognition of a positive result for a total amount of €20,498 thousand, which was recognised in the “Other income” item of the consolidated income statement for the year 2023 (Note 22.3). The amounts recognised by significant class at the date of acquisition of the assets, liabilities and contingent liabilities (100% of net assets) are as follows: Thousands of euros Property, plant and equipment (Note 9) 8,812 Other intangible assets 1,534 Other financial assets 713 Cash and cash equivalents 27,697 Other current assets 8,518 Total assets 47,274 Other liabilities 2,978 Current liabilities 5,503 Total liabilities and contingent liabilities 8,481 Total net assets 38,793 Total net assets acquired (100%) (a) 38,793 Fair value of non-controlling interests 49,543 Fair value of net assets acquired 49,543 Total fair value (b) 99,086 Goodwill (b–a) 60,293 The criteria for calculating the main assets and liabilities existing at the date of taking over the operations of Befesa Zinc Recytech, S.A.S. were the following: Property, plant and equipment: Estimated the fair value of the tangible assets based on the cost method. Finally, in 2024, the Group signed a share purchase agreement and completed the acquisition of the remaining 50% stake in Befesa Zinc Recytech, S.A.S. for a price of €40 million (Note 14.d) . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 241Befesa Annual Report 2024 7. Goodwill Details of goodwill on the consolidated statement of financial position as at 31 December 2024 and 2023 are as follows: CGU Balance at 31/12/23 Business combination (Note 6) Translation differences Balance at 31/12/24 Befesa Zinc US, Inc. 243,435 – 15,494 258,929 Steel Dust 341,422 – – 341,422 Salt Slags 35,829 – – 35,829 Secondary Aluminium 8,957 – – 8,957 629,643 – 15,494 645,137 CGU Balance at 31/12/22 Business combination (Note 6) Translation differences Balance at 31/12/23 Befesa Zinc US, Inc. 252,289 – (8,854) 243,435 Steel Dust 290,778 50,644 – 341,422 Salt Slags 35,829 – – 35,829 Secondary Aluminium 8,957 – – 8,957 587,853 50,644 (8,854) 629,643 The increase in goodwill in 2023 was due to Befesa Zinc Recytech, S.A.S.’s control reassessment described in Note 6. Impairment analysis The Group has implemented a procedure where at each year-end, any impairment of goodwill and licences with indefinite useful life (Note 8) is analysed. The recoverable amount is the higher of fair value less costs to sell and value in use, which is taken to be the present value of estimated future cash flows. The measurement methods indicated in Note 2.4 led to discount rates used to perform the impairment test in a range for each CGU, as follows: – Befesa Zinc US, Inc.: 9.08% (2023: 8.9%). – Steel Dust: 7.34–13.3% (2023: 6.73–13.3%). – Salt Slags: 7.34–8.34% (2023: 6.73–7.25%). – Secondary Aluminium: 7.34–8.34% (2023: 6.73–7.25%). The discount rates used are pre-tax and reflect the risks specific to the significant CGU segments. The Directors consider that a change in the discount rate used (approximately 50 basis points) would not have a significant impact on these consolidated financial statements. The cash flow budget is determined by the Group’s management in their strategic plans, considering a similar activity structure as the present one and based on previous years’ experience. At the end of 2024 and 2023, estimates were made of the recoverable amounts of the CGUs to which goodwill and/or licences with indefinite useful life had been allocated, in accordance with Notes 3.4 and 3.5 and the methods described above. No impairment has been recognised in 2024 and 2023. The Group’s management carried out a sensitivity analysis of the recoverable amount of goodwill and licences (Note 8) in the event of variations of ±5% in key assumptions, and no signs of impairment were identified . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 242 Befesa Annual Report 2024 8. Other intangible assets Movements in “Other intangible assets” in the consolidated statement of financial position as at 31 December 2024 and 2023 are as follows: 2024 Development expenditure Licences Computer software Administrative concessions and others Total Cost: Balance at 31/12/23 17,493 97,98 0 5,808 5,033 126,314 Additions 3,053 79 115 877 4,124 Disposals (6,664) – (456) (845) ( 7,965) Transfers – – 16 (461) (445) Translation differences 48 1,081 9 6 1,144 Balance at 31/12/24 13,930 99,140 5,492 4,610 123,172 Accumulated amortisation Balance at 31/12/23 (10,855) – (4,592) (2,837) (18,284) Additions (Note 22.6) (2,059) – (444) – (2,503) Disposals 6,664 – 456 – 7,120 Transfers – – – – – Translation differences – – (2) – (2) Balance at 31/12/24 (6,250) – (4,582) (2,837) (13,669) Other intangible assets, net at 31/12/23 6,638 97,980 1,216 2,196 108,030 Other intangible assets, net at 31/12/24 7,680 99,140 910 1,773 109,503 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 243Befesa Annual Report 2024 8. Other intangible assets continued 2023 Development expenditure Licences Computer software Administrative concessions and others Total Cost: Balance at 31/12/22 14,544 98,591 5,489 2,793 121,417 Business combination (Note 6) – – 149 1,747 1,896 Change in scope of consolidation (Note 2.5) – – (233) – (233) Additions 2,949 – 374 102 3,425 Disposals – – (34) – (34) Transfers – – 93 400 493 Translation differences – (611) (30) (9) (650) Balance at 31/12/23 17,493 97,98 0 5,808 5,033 126,314 Accumulated amortisation Balance at 31/12/22 (9,231) – (4,248) (1,824) (15,303) Business combination – – (117 ) (1,013) (1,130) Change in scope of consolidation (Note 2.5) – – 233 – 233 Additions (Note 22.6) (1,624) – (502) – (2,126) Disposals – – 34 – 34 Transfers – – – – – Translation differences – – 8 – 8 Balance at 31/12/23 (10,855) – (4,592) (2,837) (18,284) Other intangible assets, net at 31/12/22 5,313 98,591 1,241 969 106,114 Other intangible assets, net at 31/12/23 6,638 97,980 1,216 2,196 108,030 Licences are intangible assets with an indefinite useful life. The recoverability of these licences has been evaluated by the Group’s management based on the impairment tests disclosure in Note 7. 2024 The most significant additions for the year relate to capitalised development expenses, with €1,897 thousand in the “Secondary Aluminium” segment and €1,156 thousand in Befesa Holding US, Inc. (Note 3.5). In 2024, disposal mainly relates to the removal of fully amortised assets in the subsidiary Befesa Aluminio, S.L.U. 2023 The most significant additions for the year relate to development expenses capitalised in the Secondary Aluminium segment, amounting to €2,949 thousand. Investment commitments At 31 December 2024 and 2023, the Group had no significant investment commitments . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 244 Befesa Annual Report 2024 9. Property, plant and equipment Movements in this consolidated statement of financial position as at 31 December 2024 and 2023 are as follows: 2024 Land Buildings Plant and machinery Other property, plant and equipment Fixed assets in progress Total Cost: Balance at 31/12/23 45,421 212,888 908,070 35,489 47,159 1,249,027 Additions – 275 9,139 453 71,113 80,980 Disposals (161) (724) (39,061) (2,508) (10) (42,464) Transfers – 7,777 29,306 2,374 (49,391) (9,934) Translation differences (112) 2,525 26,298 166 2,463 31,340 Balance at 31/12/24 45,148 222,741 933,752 35,974 71,334 1,308,949 Accumulated depreciation and provisions: Balance at 31/12/23 – (89,539) (425,143) (23,215) – (537,897) Additions (Note 22.6) – (7,928) (58,485) (2,227) – (68,640) Disposals – 528 38,809 2,506 – 41,843 Transfers – – 4,923 – – 4,923 Translation differences – (233) (3,801) (119) – (4,153) Balance at 31/12/24 – (97,172) (443,697) (23,055) – (563,924) Impairment losses at 31/12/23 (874) – (7,569) (27) – (8,470) Impairment losses at 31/12/24 (874) – (7,569) (27) – (8,470) Carrying amount at 31/12/23 44,547 123,349 475,358 12,247 47,159 702,660 Carrying amount at 31/12/24 44,274 125,569 482,486 12,892 71,334 736,555 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 245Befesa Annual Report 2024 9. Property, plant and equipment continued 2023 Land Buildings Plant and machinery Other property, plant and equipment Fixed assets in progress Total Cost: Balance at 31/12/22 45,942 175,462 785,167 33,700 147,976 1,188,247 Business combination (Note 6) 185 5,608 16,211 200 375 22,579 Change in scope of consolidation (Note 2.5) (79) (1,413) (34,670) (225) – (36,387) Additions – 2,652 2,934 622 94,957 101,165 Disposals (6) (158) (2,432) (700) (35) (3,331) Transfers 106 33,341 163,408 1,964 (191,594) 7,225 Translation differences (727) (2,604) (22,548) (72) (4,520) (30,471) Balance at 31/12/23 45,421 212,888 908,070 35,489 47,159 1,249,027 Accumulated depreciation and provisions: Balance at 31/12/22 – (80,021) (374,662) (21,703) – (476,386) Business combination (Note 6) – (4,354) (13,707) (111) – (18,172) Change in scope of consolidation (Note 2.5) – 1,413 16,302 225 – 17, 940 Additions (Note 22.6) – (7,492) (56,979) (2,061) – (66,532) Disposals – 152 2,382 670 – 3,204 Transfers – 295 (8,011) (2) – ( 7,718) Translation differences – 468 9,532 (233) – 9,767 Balance at 31/12/23 – (89,539) (425,143) (23,215) – (537,897) Impairment losses at 31/12/22 (874) – (28,151) (27) – (29,052) Reversal (Note 2.5) – – 20,582 – – 20,582 Impairment losses at 31/12/23 (874) – (7,569) (27) – (8,470) Carrying amount at 31/12/22 45,068 95,441 382,354 11,970 147,976 682,809 Carrying amount at 31/12/23 44,547 123,349 475,358 12,247 47,159 702,660 2024 The main additions for the year relate to investments made by Befesa Holding US, Inc. (€39.0 million), primarily driven by the Palmerton Project and recurring environmental and maintenance expenditures at each plant. In 2024, disposals mainly relate to the removal of fully amortised assets in the subsidiary Befesa Aluminio, S.L.U. “Transfers” for a net value of €5.0 million mainly include the amount of long-term spare parts transferred to short-term spare parts, included in the “Inventory” line of the consolidated statement of financial position due to their storage cycle of less than one year . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 246 Befesa Annual Report 2024 2023 The main additions for the year are related to the investments made by the new companies in the US (€56.5 million) and to works done in Befesa Salzschlacke GmbH, mainly related to the Hanover plant after the fire in 2021 (€20.4 million) and the recurring environmental and maintenance investments made at each plant every year. Impairment losses On 31 December 2024, there were no impairment additions. On 31 December 2023, the reversal of the impairment losses mainly relates to the sale of Befesa Salt Slags, Ltd. as at 31 December 2023 (€18 million) as a result of the sale of this company (Note 2.5). Insurance The Group takes out insurance policies to cover possible risks that its property, plant and equipment are subject to. The coverage is considered to be sufficient. Capitalisation of borrowing costs There are no significant borrowing costs capitalised in 2024 and 2023. Mortgaged property, plant and equipment At 31 December 2024 and 2023, there are no significant fixed assets pledged to secure loans. Investment commitments At 31 December 2024, the Group had investment commitments amounting to €50.9 million, mainly due to the expansion projects in Befesa Holding US, Inc. and in Befesa Aluminium Germany GmbH (2023: €41.4 million, mainly due to the expansion project in Befesa Holding US, Inc.). 10. Financial assets by category and class The classification of financial assets by category and class is as follows: 2024 2023 Current Non-current Current Non-current Financial assets at amortised cost Loans Variable rate – 1,666 – 1,666 Impairment – ( 741) – (924) Trade and other receivables (Note 13) 127, 913 – 119,154 – Security deposits 461 3,665 450 3,875 Financial assets measured at fair value Hedging derivatives (Note 17) – 11,256 14,176 30,521 Total financial assets 128,374 15,846 133,780 35,138 The fair value of financial assets does not differ significantly from their carrying amount . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 247Befesa Annual Report 2024 11. Right-of-use assets and lease liabilities Details of and movement in classes of right-of-use assets during 2024 and 2023 are as follows: Land Buildings Plant and machinery Other property, plant and equipment Total Cost: Balance at 31/12/22 17,594 6,842 10,981 10,830 46,247 Additions 688 1,905 4,962 7,606 15,161 Disposals 110 (293) (2,135) (2,255) (4,573) Translation differences (509) (73) (99) (517) (1,198) Balance at 31/12/23 17, 883 8,381 13,709 15,664 55,637 Additions 127 1,343 7,622 9,684 18,776 Disposals 81 (213) (5,087) (2,659) (7, 878) Translation differences 300 116 182 998 1,596 Balance at 31/12/24 18,391 9,627 16,426 23,687 68,131 Accumulated amortisation Balance at 31/12/22 (3,018) (3,743) (5,661) (2,930) (15,352) Additions (Note 22.6) (1,011) (1,463) (4,661) (4,871) (12,0 06) Disposals (158) 126 1,711 1,556 3,235 Translation differences 22 39 134 236 431 Balance at 31/12/23 (4,165) (5,041) (8,477) (6,009) (23,692) Additions (Note 22.6) (1,077) (1,333) (4,495) (5,319) (12,224) Disposals (81) 195 3,230 2,519 5,863 Translation differences (45) (76) (60) (303) (484) Balance at 31/12/24 (5,368) (6,255) (9,802) (9,112) (30,537) Right-of-use assets net at 31/12/2023 13,718 3,340 5,232 9,655 31,945 Right-of-use assets net at 31/12/2024 13,023 3,372 6,624 14,575 37,594 The short-term lease expense for 2024 amounts to €2,545 thousand (2023: €1,406 thousand). Details of lease payments and liabilities An analysis of the contractual maturity of lease liabilities, including future interest payable, is as follows: 2024 2023 Within 1 year 11,493 9,283 Between 1 and 2 years 7,134 5,799 Between 2 and 3 years 4,927 3,732 More than 3 years 8,414 7,549 31,968 26,363 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 248 Befesa Annual Report 2024 The changes in this liability from 1 January to 31 December are as follows: 2024 2023 Balance as at 1 January 26,363 24,286 Increase 18,776 15,838 Lease payments (13,385) (12, 826) Interest 1,257 980 Disposal (2,226) (1,224) Translation differences 1,183 (691) 31,968 26,363 12. Inventories Details of inventories in the accompanying consolidated statement of financial position as at 31 December 2024 and 2023 are as follows: 2024 2023 Finished goods 23,827 25,258 Goods in progress and semi-finished goods 5,822 7,807 Raw materials 26,017 31,889 Other 44,666 36,135 Total 100,332 101,089 “Other” at 31 December 2024 and 2023 mainly includes spare parts for the Group’s facilities. The Group has taken out insurance policies to cover risks relating to inventories. The coverage provided by these policies is considered to be sufficient. 13. Accounts receivable The breakdown of accounts receivable in the accompanying consolidated statement of financial position as at 31 December 2024 and 2023 is as follows: 2024 2023 Contract assets 4,839 6,468 Trade and other receivables 98,565 70,549 Trade receivables from related companies 354 409 Other receivables (Note 21) 11,631 19,342 Public authorities (Note 20) 10,487 20,726 Advances to suppliers 3,012 2,859 Expected credit loss (975) (1,199) Total 127,913 119,154 No significant impact of the applicability of the expected credit loss model has been identified on trade receivables . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 249Befesa Annual Report 2024 13. Accounts receivable continued Changes in the allowances for doubtful debts relating to the Group’s trade and other receivables for 2024 and 2023 are as follows: 2024 2023 Opening balance (1,199) (1,891) Write-off uncollectible accounts receivable and other transfers 263 712 Business combination (Note 6) – (28) Conversion differences (39) 8 Closing balance (975) (1,199) The credit quality of trade receivables that have not become impaired can be classified as highly satisfactory, because in substantially all of the cases the risks are accepted and covered by credit risk insurers and/or banks and financial institutions. The maximum exposure to credit risk at the date of presentation of the financial information is the fair value of each of the accounts receivable disclosed above and, in all cases, taking into consideration the aforementioned credit insurance coverage. 14. Equity a) Share capital The number of shares as at 31 December 2024 and 2023 is 39,999,998 with a par value of €2.78 each. All the shares are listed on the Frankfurt Stock Exchange. The authorised capital of the Company (including, for the avoidance of doubt, the Company’s issued share capital) is set at 39,999,998 shares. The shareholder structure as at 31 December 2024 and 2023 is as follows: Percentage of ownership 2024 2023 Free-float (including management) 100% 100% Total 100% 100% b) Share premium and other reserves Details in the consolidated financial statement are as follows: 2024 2023 Share premium 532,867 532,867 Hedging reserves (20,787) 36,888 Other reserves 132,254 96,490 Total 644,334 666,245 Share premium The share premium may be used to provide for the payment of any shares that the Parent Company may repurchase from its shareholders, to offset any net realised losses, to make distributions to its shareholders, in the form of a dividend, or to allocate funds to the legal reserve. Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 250 Befesa Annual Report 2024 Other reserves The Parent Company is required to transfer a minimum of 5% of its net statutory profit for each financial year to a legal reserve. This requirement ceases to be necessary once the balance of the legal reserve reaches 10% of the issued share capital. If the legal reserve later falls below the 10% threshold, at least 5% of net statutory profits must again be allocated to the reserve. The legal reserve is not available for distribution to the shareholders. At the AGM in June 2024, the shareholders resolved to approve the distribution of a dividend of €29,200 thousand from the net profit of the year 2023 (2023: in June 2023, the shareholders at their AGM resolved to approve the distribution of a dividend of €50,000 thousand from the net profit of the year 2022). c) Translation differences The breakdown, by company, of “Translation differences” at 31 December 2024 and 2023 is as follows: Company or group of companies 2024 2023 Befesa Zinc Korea, Ltd. (4,200) (1,448) Befesa Circular Alloys Sweden, AB (3,639) (3,137) Befesa Silvermet İskenderun Çelik Tozu Geri Dönüşümü, A.S. (17,203) (16,565) Befesa Silvermet Dış Ticaret, A.S. (1,135) (1,959) Befesa Zinc Environmental Protection Technology (Jiangsu) Co, Ltd. 799 426 Befesa Zinc Environmental Protection Technology (Henan) Co, Ltd. (11) (209) Befesa Holding US, Inc. 60,082 23,092 Befesa Zinc Metal, Inc. (9,708) (11,4 65) Other (968) (473) Total 24,017 (11,738) d) Non-controlling interests Details of equity – non-controlling interests are as follows: % non-controlling Thousands of euros 2024 2023 2024 2023 Steel Dust: Befesa Zinc Recytech, S.A.S. 0% 50% – 43,978 Befesa Silvermet Turkey, S.L. and subsidiaries 47.6% 46.4% 15,518 9,851 Total 15,518 53,829 On 4 March 2024, Befesa Steel Services GmbH acquired the remaining 50% stake in Befesa Zinc Recytech, S.A.S. (formerly Recytech, S.A.) for a price of €40 million (Note 6). The difference between the consideration paid and the carrying amount of the non-controlling interests was recognised in the “Other reserves” item of the consolidated equity of an amount of €4,356 thousand . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 251Befesa Annual Report 2024 14. Equity continued Movements in non-controlling interests are as follows: 2024 2023 Balance at 1 January of current period 53,829 14,153 Profit for the year 3,266 (404) Difference in foreign currency conversion 2,993 37 Dividends to non-controlling interests – (9,500) Variations in the perimeter and business combinations (Notes 2.5 and 6) (44,570) 49,543 Balance at 31 December of current period 15,518 53,829 Summary information on subsidiaries with non-controlling material shareholdings Below are the main figures of Befesa Zinc Recytech, S.A.S. expressed in thousands of euros. Befesa Zinc Recytech, S.A.S. 2024 2023 Non-current assets – 11, 953 Current assets – 21,908 Non-current liabilities – 2 Current liabilities – 6,110 Equity – 27,749 Sales 5,504 38,900 Profit before taxes 1,570 10,240 Profit after taxes 1,183 7,959 Below are the main figures of Befesa Silvermet Turkey, S.L. and its subsidiaries, expressed in thousands of euros. Befesa Silvermet Turkey, S.L. and its subsidiaries 2024 2023 Non-current assets 33,766 31,250 Current assets 13,266 9,736 Non-current liabilities 935 5,858 Current liabilities 13,523 13,869 Equity 32,574 21,259 Sales 29,389 19,535 Profit before taxes 6,575 (10,404) Profit after taxes 5,613 (9,459) e) Capital management The Group’s capital management focuses on achieving a financial structure that optimises the cost of capital while maintaining a solid financial position. This policy reconciles the creation of value for the shareholders, with access to financial markets at a competitive cost in order to cover both debt-refinancing requirements and investment plan financing needs not covered by the funds generated by the business (Note 4.1.d). The Group’s management considers that the leverage ratio (Note 2.6) is a good indicator of the degree to which the objectives set are being achieved. Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 252 Befesa Annual Report 2024 15. Financial debt Details of the related line items in the accompanying consolidated statement of financial position as at 31 December 2024 and 2023 are as follows: 2024 2023 Current maturity Non-current maturity Current maturity Non-current maturity Bank loans and credit facilities 20,533 664,086 22,580 655,610 Unmatured accrued interest 4,889 – 6,218 – Finance lease payables (Note 11) 11,493 20,475 9,283 17,080 Total 36,915 684,561 38,081 672,690 The fair values of borrowings are not materially different from their carrying amounts as the interest payable is close to current market rates. The main terms and conditions of borrowings are as follows: 2024 2023 Type Limit in nominal currency (thousands of currency) Interest rate Maturity date Current maturity Non- current maturity Current maturity Non- current maturity Facilities agreement EUR 785,000 Euribor+2.75% 2029 4,763 639,802 6,015 616,234 Jiangsu CNY 220,000 LPR(NBIC)+25 bps 2026 7,271 7,253 9,264 14, 011 Henan CNY 260,000 LPR(NBIC)+25 bps 2027 6,673 17,030 4,522 22,864 Other 18,208 20,476 18,280 19,581 36,915 684,561 38,081 672,690 At 31 December 2023, the facilities agreement consisted of a €626 million senior secured Term Loan B (TLB) which is a bullet with maturing in July 2026, a €75 million revolving credit facility (RCF) maturing in July 2025, and a €35 million guarantee facility maturing in July 2025. On 18 July 2024, the Company successfully completed the refinancing of its facilities agreement, which now consists of: – TLB facility commitment in an amount of €650 million, which is a bullet maturing in July 2029. – RCF in an amount of €100 million maturing in July 2028. – A guarantee facility commitment in an amount of €35 million maturing in July 2028. The Group has analysed whether there is a substantial modification of the conditions and concluded that the original liabilities are not cancelled, as the discounted present value of the cash flows under the new terms decreases by only 0.42% compared to the discounted present value of the remaining cash flows of the original financial liability. However, this modification resulted in the recognition of a finance cost of €0.8 million, as the new future cash flows were discounted at the original effective rate of 2.8%. Following the 2024 refinancing, the interest rate on the TLB was set at Euribor plus a 2.75% spread, whereas the RCF carried a spread of 2.25% (compared to the previous rates in 2023 of 2.00% and 2.25%, respectively, prior to the refinancing). These spreads could be adjusted downwards to 2.25% in the case of TLB and to 1.75% in the case of the RCF, depending on the ratio of net financial debt/Adjusted EBITDA . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 253Befesa Annual Report 2024 15. Financial debt continued The facilities agreement provides a financial covenant based on the net leverage which will not exceed the ratio 4.5:1 for any relevant period. The covenant applies only if the total amount of all drawings under the RCF exceeds 40% of the commitments. At 31 December 2024 and 2023, the RCF has not been drawn and no financial covenant applies. The facilities agreement was signed by the Parent of the Group (Befesa, S.A.) and has been designed to meet the financing needs of all Group companies. The facilities agreement limits the dividend distribution if any Group company incurs an event of default as defined in the agreement. In 2020, Befesa closed the financing structure for both plants under construction in China (Jiangsu and Henan). The notional and the rest of the conditions signed are shown in the table above. At 31 December 2024 and 2023, “Other” mainly includes the short-term financing of Befesa Silvermet İskenderun and debt related to the financial leases. At 31 December 2024, an amount of €100 million was undrawn from the syndicated financing arrangement (2023: €75 million) (Note 4.c). The evolution of net financial debt during the 2024 and 2023 is as follows: Cash and cash equivalents (Note 4) Other current financial assets (Note 10) Financial debt (Note 15) Total Net financial debt as at 31 December 2022 (161,751) (60) 710,772 548,961 Cash flows 56,355 – (20,736) 35,619 Exchange rate adjustments (1,296) – (373) (1,669) Other non-monetary movements () – (11) 21,108 21,097 Net financial debt as at 31 December 2023 (106,692) (71) 710,771 604,008 Cash flows 4,325 – (5,683) (1,358) Exchange rate adjustments (153) – 1,222 1,069 Other non-monetary movements () – 71 15,166 15,237 Net financial debt as at 31 December 2024 (102,520) – 721,476 618,956 () Other non-monetary movements: mainly due to the impact of the new contracts under IFRS 16. 16. Other current and non-current payables 2024 2023 Current maturity Non-current maturity Current maturity Non-current maturity Payable to asset suppliers 14,921 – 8,385 – Accounts payable to public authorities (Note 20) 23,590 – 14,103 – Remuneration payable (Note 18) 18,840 – 19,064 – Other 10,189 4,908 4,088 6,707 Total 67,54 0 4,908 45,640 6,707 “Other” mainly includes the capital grants not yet released to income, amounting to approximately €3.5 million (2023: €3.9 million), and the current financial liabilities related to the last derivative settlements of the year amounting to EUR 6.6 million (2023: €0.0 million) . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 254 Befesa Annual Report 2024 17. Financial derivatives The Group uses derivative financial instruments to hedge the risks to which its activities, operations and future cash flows are exposed, which are mainly risks arising from changes in exchange rates, interest rates and the market price of certain metals, mainly zinc. Details of the balances that reflect the measurement of derivatives in the accompanying consolidated statement of financial position as at 31 December 2024 and 2023 are as follows: 2024 2023 Cash flow hedges non-current assets (Note 10) Swap contracts for zinc – 8,796 Interest rate swap 11, 256 20,845 Equity swap – 880 11,256 30,521 Cash flow hedges current assets Swap contracts for zinc – 14,138 Foreign currency swap – 38 – 14,176 Total assets 11,256 44,697 Cash flow hedges non-current liabilities: Swap contracts for zinc 12,637 – Equity swap 3,570 – 16,207 – Cash flow hedges current liabilities: Swap contracts for zinc 26,079 2,229 Foreign currency SWAP 83 – 26,162 2,229 Total liabilities 42,369 2,229 Zinc derivative contracts Details of the tonnes hedged and of the maturity of the related contracts at 31 December 2024 and 2023 are as follows: Tonnes 31 December 2024 31 December 2023 2025 2026 and subsequent years 2024 2025 and subsequent years Hedge (in tonnes) Swap contract for zinc 165,901 152,925 145,733 40,375 165,901 152,925 145,733 40,375 During 2024, Befesa has extended its zinc hedges until and including January 2027 (2023: June 2025 ). 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 255Befesa Annual Report 2024 17. Financial derivatives continued Derivatives are designated to hedge highly probable forecast transactions (sales). The full effect of the hedge is recognised in equity, net of the tax effect, considering its assessment as highly effective hedging instruments. The portion transferred to profit/(loss) each year is recognised under “Revenue” in the income statement at each settlement date. Interest rate swaps (floating to fixed) The Company arranged an interest rate swap (“IRS”) in March 2020; the notional amount of the IRSs outstanding at 31 December 2024 and 31 December 2023 totalled €316,000 thousand (Note 4.1), which was classified as a highly effective hedging instrument. The fix interest rate is 0.236%, and the main benchmark floating rate was Euribor. This derivative matures in July 2026. Equity swap At the end of the year 2024, the Group has an ongoing equity swap agreement to acquire 293,228 shares. At the end of the year 2023, the Group had formalised an equity swap agreement to acquire 374,588 shares with the same schedule of the compensation plan (Note 24). Foreign currency cash flow hedges At 31 December 2024, currency purchase contracts (swaps or forwards) amounted to: – US dollar sales: USD 21,667 thousand – US dollar purchases: USD 4,900 thousand At 31 December 2023, currency purchase contracts (swaps or forwards) amounted to: – US dollar sales: USD 14,033 thousand – US dollar purchases: USD 7,873 thousand Highly probable future hedged transactions denominated in foreign currency are expected to take place on various dates within the next 12 months. The gains and losses recognised in the hedging reserve in equity in connection with forward foreign currency contracts at 31 December 2024 and 2023 are recognised in profit or loss in the year in which the hedged transactions affect the income statement. Gains and losses in equity in respect of currency forwards at 31 December 2024 will be transferred to the income statement over the next 12 months . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 256 Befesa Annual Report 2024 18. Long-term provisions Details of long-term provisions on the liability side of the accompanying consolidated financial statements and of movements in 2024 and 2023 are as follows: Provisions for litigation, pensions and similar obligations Other provisions for contingencies and charges Total long-term provisions Balance at 31 December 2022 9,795 8,723 18,518 Profit and loss impact 2,539 1,588 4,127 Transfers (3,889) – (3,889) Payments (284) (73) (357) Conversion differences (79) (267) (346) Balance at 31 December 2023 8,082 9,971 18,053 Profit and loss impact (143) 197 54 Transfers (1,837) – (1,837) Payments (340) (694) (1,034) Conversion differences 345 490 835 Balance at 31 December 2024 6,107 9,964 16,071 Provisions for litigation, pensions and similar obligations At 31 December 2024, the Group recognised a provision of €2.0 million (2023: €3.1 million) related to the compensation plans described in Note 24. “Transfers” in 2024 and 2023 mainly corresponds to the liability payable in 2025 and 2024, which has been recognised as “Remuneration payable” at 31 December 2024 and 2023. In 2024, the profit and loss impacts are related to a cancellation of a provision for Befesa Holding US, Inc. partially offset by the compensation plans described in Note 24. In 2023, the profit and loss impacts were mainly related to the compensation plans described in Note 24. Other provisions for contingencies and charges The Group company Befesa Circular Alloys France, S.A.S. (formerly Befesa Valera, S.A.S.) recognises a provision of approximately €1.9 million at 31 December 2024 and 2023 for the present value of the estimated costs of dismantling the concession for the performance of their activities at the Port of Dunkirk (France) following its termination. In addition, the Group recognised other provisions under “Other provisions for contingencies and charges” to meet liabilities, whether legal or implicit, probable or certain, due to contingencies, ongoing litigations and tax obligations, which arise as the result of past events and are more likely than not to require an outflow of resources embodying economic benefits from the Group to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation. Befesa Zinc US, Inc. recognises asset retirement obligations linked to its different facilities in the US of €7.0 million at 31 December 2024 (2023: €7.0 million) for the present value of estimated costs. The main asset retirement obligation relates to the ultimate closure of the former Monaca facility . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 257Befesa Annual Report 2024 19. Income tax The Group’s Parent Company, Befesa, S.A., is subject to Luxembourg law (Note 1). Befesa Medio Ambiente, S.L.U. heads the fiscal group of companies subject to Biscay tax regulation. That tax group comprises Befesa Medio Ambiente, S.L.U., MRH Residuos Metálicos, S.L.U., Befesa Aluminio, S.L.U., Befesa Aluminio Comercializadora, S.L.U., Befesa Zinc, S.A.U., Befesa Zinc Comercial, S.A.U., Befesa Zinc Óxido, S.A.U., Befesa Zinc Aser, S.A.U., Befesa Steel R&D, S.L.U., Befesa Zinc Sur, S.L.U. and Befesa Circular Alloys, S.L.U. The German companies Befesa Zinc Germany GmbH, Befesa Steel Services GmbH, Befesa Zinc Freiberg GmbH and Befesa Zinc Duisburg GmbH file consolidated tax returns under the tax legislation applicable to them in Germany; Befesa Zinc Gravelines, S.A.S. and Befesa Circular Alloys France, S.A.S. file consolidated tax returns under the tax legislation applicable to them in France; the German companies Befesa Salzschlacke GmbH and Befesa Aluminium Germany GmbH file consolidated tax returns under the tax legislation applicable to them in Germany; and in the US, the companies Befesa Holding US, Inc., Befesa Zinc US, Inc., Befesa Zinc Metal, LLC. and Chesnut Ridge Railroad, Corp. file consolidate tax returns under the tax legislation applicable to them in the US. The remaining Group companies file individual income tax returns in accordance with the tax legislation applicable to them. Group companies subject to Biscay tax legislation, including those that form part of the tax group, generally have open for review by the tax authorities the years that have not become statute-barred, the last four years for income tax and for the main taxes and tax obligations applicable to them, in accordance with current legislation. Fully consolidated foreign subsidiaries calculate income tax expense and tax charges for the taxes applicable to them in conformity with the legislation of, and at the tax rates in force in, their respective countries (Note 3.19). Pillar Two legislation has been enacted or substantively enacted in certain jurisdictions in which the Group operates. The legislation is effective for the Group’s financial year beginning 1 January 2024. The Group is in scope of the enacted or substantively enacted legislation and has performed an assessment of the Group’s potential exposure to Pillar Two income taxes. The assessment of the potential exposure to Pillar Two income taxes is based on the most recent tax filings, country-by- country reporting and financial statements for the constituent entities in the Group. Based on the assessment, the Group would meet at least one of the Transitional Safe Harbours tests for the following years (2024–2026) in all the jurisdictions except in France, where a capitalisation of tax loss carry-forwards coming from previous years has been carried out in 2024. Without this impact, the French jurisdiction also would meet at least one of the Transitional Safe Harbours tests. The Group does not expect a material exposure to Pillar Two income taxes in any jurisdiction . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 258 Befesa Annual Report 2024 The reconciliation of accounting profit/(loss) for the year to income tax expense for the year is as follows: 2024 2023 Profit/(Loss) before tax from continuing operations 74,850 68,068 Total accounting profit/(loss) before tax 74,850 68,068 Tax charge at the tax rate in force in each territory (20,253) (18,251) Tax credits (loss) generated/used in the year and not capitalised ( 7,311) (2,265) Off-balance tax credits recognition 4,849 2,402 Tax credit de-recognition (2,128) – Non-deductible expenses and non-computable income (Note 22.3) 426 4,445 Tax deductions generated/(used) in the year 1,241 893 Others 2,412 2,276 Income tax expense (20,764) (10,500) – From continuing operations (20,764) (10,500) 2024 Tax credits generated/used in the year and not capitalised mainly corresponds to tax loss carry-forwards generated in US companies. Off-balance tax credits recognition relates mainly to previous year tax loss carry-forwards capitalisation in companies in France. 2023 Non-computable income at 31 December 2023 mainly corresponds to the income from valuing the net asset of Befesa Zinc Recytech, S.A.S. at 31 December 2022 at fair value (Note 22.3) that does not have a tax impact. The detail of not reflected deferred tax assets and liabilities as of 31 December 2024 and 2023 is as follows: 2024 Tax loss carry-forwards Deductions Temporary differences (assets) Temporary differences (liabilities) Befesa, S.A. 8,908 – – – Befesa Holding US, Inc. 146,495 – 22,607 26,272 Befesa Circular Alloys Sweden, AB 8,343 – 53 174 Befesa Zinc Environmental Protection Technology (Henan) Co. Ltd 2,881 – – – Befesa Circular Alloys France, S.A.S. 279 – – – Others 1,398 600 267 – Total deferred tax 168,304 600 22,927 26,446 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 259Befesa Annual Report 2024 19. Income tax continued 2023 Tax loss carry-forwards Deductions Temporary differences (assets) Temporary differences (liabilities) Befesa, S.A. 8,866 – – – Befesa Holding US, Inc. 129,203 – 18,647 19,704 Befesa Circular Alloys Sweden, AB 7, 805 – – – Befesa Circular Alloys France, S.A.S. 4,452 – 144 – Others 2,321 458 316 – Total deferred tax 152,647 458 19,107 19,704 The majority of these tax credits (€155.5 million) expire in 2043 or later (2023: €142.6 million). Details of deferred tax assets and deferred tax liabilities in the accompanying consolidated financial statements for 2024 and 2023 are as follows: 2024 2023 Deferred tax assets arising from: Tax loss carry-forwards and tax credits and tax relief 74,148 76,793 Revaluation of derivative financial instruments 8,742 272 Other deferred tax assets 19,292 19,643 Total deferred tax assets 102,182 96,708 Deferred tax liabilities arising from: Asset revaluation 43,782 44,065 Revaluation of derivative financial instruments 2,701 6,264 Deferred tax liability arising from the tax deductibility of goodwill 55,454 50,801 Other deferred tax liabilities 8,359 12,715 Total deferred tax liabilities 110,296 113,845 Amounts corresponding to deferred tax assets are as follows: 2024 2023 Deferred tax assets Deferred tax assets recoverable in more than 12 months 88,798 91,486 Deferred tax assets recoverable within 12 months 13,384 5,222 Total deferred tax assets 102,182 96,708 The Directors of the Group companies consider that the tax assets recognised will be offset in the income tax returns of the Group companies taken individually or of the companies forming the consolidated tax group, as appropriate, within the applicable deadlines and limits . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 260 Befesa Annual Report 2024 Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the income taxes levied by the same tax authority. At 31 December 2024 and 2023, there was no material offset of deferred tax assets and liabilities. The Group recognises deferred tax assets, tax loss carry-forwards and unused tax credits and tax relief to the extent that their future realisation or utilisation is sufficiently assured. Movements in deferred tax assets and liabilities in 2024 and 2023 relate to: 2024 Recognised in Balance at 31/12/23 Income statement Equity Balance at 31/12/24 Deferred tax assets Tax loss carry-forwards and deductions 76,793 (1,472) (1,173) 74,148 Derivatives 272 (3,686) 12,156 8,742 Other 19,643 (343) (8) 19,292 Total deferred tax assets 96,708 (5,501) 10,975 102,182 Deferred tax liabilities Revaluations 44,065 (1, 211) 928 43,782 Derivatives 6,264 – (3,563) 2,701 Goodwill 50,801 4,653 – 55,454 Other (temporary differences) 12,715 (3,903) (453) 8,359 Total deferred tax liabilities 113,845 (461) (3,088) 110,296 2023 Recognised in Balance at 31/12/22 Income statement Equity Balance at 31/12/23 Deferred tax assets Tax loss carry-forwards and deductions 72,731 6,639 (2,577) 76,793 Derivatives 13,902 (308) (13,322) 272 Other 17,014 1,492 1,137 19,643 Total deferred tax assets 103,647 7,823 (14,762) 96,708 Deferred tax liabilities Revaluations 46,123 (1,498) (560) 44,065 Derivatives 7,474 – (1,210) 6,264 Goodwill 46,644 4,157 – 50,801 Other (temporary differences) 7,392 5,259 64 12,715 Total deferred tax liabilities 107,633 7,918 (1,706) 113,845 The main amounts and changes in deferred tax assets and liabilities in 2024 and 2023 were as follows : 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 261Befesa Annual Report 2024 19. Income tax continued 2024 y Movements recognised in equity relate mainly to the tax effect of the measurement of derivatives hedging zinc prices (Note 17), and to the impact of conversion difference, mainly from deductions in Turkey and Befesa Zinc US, Inc. y The movement in goodwill relates to the tax depreciation of the goodwill by Befesa Zinc. 2023 y Movements recognised in equity relate mainly to the tax effect of the measurement of derivatives hedging zinc prices (Note 17), and to the impact of conversion difference from deductions in Turkey (-€2.3 million) in assets, and from Befesa Zinc US, Inc. (€0.6 million) in liabilities. y The movement in income statement in tax loss carry-forwards and deductions is mainly related to tax loss carry-forwards generated in Befesa Management Services, Chinese and Korean companies (€8.4 million) and tax incentives regarding investments in fixed assets in Turkey (€2.2 million). Meanwhile, in Basque fiscal companies, tax loss carry-forwards and deductions amounting to €4.2 million have been used. y The movement in goodwill relates mainly to the tax depreciation of the goodwill by Befesa Zinc. 20. Public administrations Details of tax receivables and tax payables on the asset and liability sides, respectively, of the accompanying consolidated statement of financial position as at 31 December 2024 and 2023 are as follows: 2024 2023 Receivable (Note 13) Payable (Note 16) Receivable (Note 13) Payable (Note 16) VAT 8,420 7,232 7,812 5,979 Withholdings and interim payments 198 919 – 787 Corporate income tax 1,200 11,9 68 11,975 4,636 Social security 11 2,696 14 2,134 Other 658 775 925 567 Total 10,487 23,590 20,726 14,103 “Accounts payable to public authorities” on the liability side of the accompanying consolidated financial statements includes the liability relating to applicable taxes, mainly personal income tax withholdings, VAT and projected income tax relating to the profit for each year, mainly net of tax withholdings and pre-payments made each year. 21. Guarantee commitments to third parties and contingencies At 31 December 2024 and 2023, a number of Group companies had provided guarantees for an overall amount of approximately €71.9 million (31 December 2023: €74.0 million) to guarantee their operations vis-à-vis customers, banks, government agencies and other third parties. The Group has contingent liabilities for litigation arising in the ordinary course of business from which no significant liabilities are expected to arise other than those for which provisions have already been recognised. In November 2021, a fire broke out at the plant in Hanover (Germany) belonging to the subsidiary Befesa Salzschlacke GmbH. Because of this fire, some parts of the plant were seriously damaged and have consequently been amortised. The insurance policy in place fully covers the damage caused, so the Group recognised an income of €4,065 thousand in 2023 under “Other operating income” (Note 22.3). In 2024, the Group has not recognised any income related to this incident and at 31 December 2024, the Group has no outstanding amounts to collect under “Other receivables” (2023: €2,280 thousand) . Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 262 Befesa Annual Report 2024 22. Income and expenses 22.1 Revenues Details of revenues by category for 2024 and 2023 are as follows: 2024 % 2023 % Steel Dust 825,550 67% 785,575 67% – Sale of WOX and other metals 541,882 44% 480,778 41% – Service fees 83,527 7% 101,270 9% – Smelting: sale of metals and by–products (Note 6) 341,334 28% 326,935 28% – Eliminations () (141,193) (123,408) Salt Slags 105,874 9% 86,318 7% – Sale of aluminium concentrates and melting salt 62,947 5% 51,903 4% – Fees for recycling salt slags and SPL 42,927 3% 34,415 3% Secondary Aluminium 367,296 30% 360,228 31% – Sale of secondary aluminium alloys 342,717 28% 333,157 28% – Technology division and others 24,579 2% 27,071 2% Corporate, other minor eliminations (59,690) (51,521) Total 1,239,030 1,180,600 () Eliminations in the Steel Dust segment correspond to the elimination of sales between Befesa Zinc US, Inc. and Befesa Zinc Metal, Inc., as Befesa Zinc US, Inc. sells 100% of its production to Befesa Zinc Metal, Inc., which processes WOX and transforms it into SHG zinc. The Group discloses revenue by reporting segment and geographical area in Note 5. 22.2 Raw materials and consumables Details of procurements in the consolidated income statement for 2024 and 2023 are as follows: 2024 2023 Cost of raw materials and other supplies used 579,595 578,482 Changes in goods held for resale, raw materials and other inventories (4, 311) (209) 575,284 578,273 22.3 Other operating income Details of other operating income in the consolidated income statement for 2024 and 2023 are as follows: 2024 2023 In-house work on non-current assets (Note 3.6) 68 2,055 Income from income-related grants 1,680 6,269 Gain on business combination (Note 6) – 20,498 Other operating income (Note 21) 1,283 4,065 Services 4,381 4,214 Total 7,412 37,101 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 263Befesa Annual Report 2024 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 22. Income and expenses continued 22.4 Personnel expenses Details of personnel expenses in the consolidated income statement for 2024 and 2023 are as follows: 2024 2023 Wages and salaries 112,24 3 114,749 Employer’s social security contributions 19,240 18,250 Other welfare costs 13,840 13,279 Total 145,323 146,278 Of the Group’s average headcount in 2024, 218 employees had temporary employment contracts (2023: 214 employees). The number of employees at the 2024 and 2023 year-end, by gender, was as follows: 2024 2023 Male Female Male Female Management 43 8 45 7 Experts 153 69 165 41 Professionals 313 66 291 100 Operators and assistants 1,068 64 1,073 68 Total 1,577 207 1,574 216 22.5 Other operating expenses 2024 2023 External services 300,814 287,698 Taxes other than income tax 6,893 6,595 Other current operating expenses 9,313 10,197 Total 317,020 304,490 22.6 Amortisation/Depreciation, impairment and provisions 2024 2023 Amortisation of intangible assets (Note 8) 2,503 2,126 Depreciation of property, plant and equipment (Note 9) 68,640 66,532 Amortisation of right-of-use assets (Note 11) 12,224 12,006 Other 8,336 1,505 Total 91,703 82,169 264 Befesa Annual Report 2024 23. Finance costs The breakdown of this balance in the 2024 and 2023 consolidated income statements is as follows: 2024 2023 Interest expense 39,768 35,786 Other finance costs 6,945 3,208 Losses of fair value of financial assets measured at fair value through profit or loss (Note 6) – 35 Total 46,713 39,029 In 2024, an interest rate swap settlement accrued €11,181 thousand of finance income (2023: €9,336 thousand). Other finance costs include €4,450 thousand related to the fair value of the equity swap (Note 17) (2023: €0 thousand). 24. Remuneration of the Board of Directors Directors’ remuneration and other benefits Remuneration in the total amount of €5,768 thousand was accrued in 2024 to the members of the Parent Company’s Board of Directors (including Executive Members of the Board of Directors) for discharging their duties in Group companies (2023: €8,106 thousand). Also, as at 31 December 2024 and 2023 and during the year then ended, the Parent Company had not granted any loans, advances or other benefits to its former or current Directors. In addition, the Parent Company did not have any pension or guarantee obligations with any current members of the Board of Directors. Incentives to executives and other matters In 2024 and 2023, there were no transactions with senior executives outside the normal course of business. In January 2018, the Parent Company approved a compensation plan for certain members of the Group’s management. This compensation plan was linked to the evolution of certain key indicators determined in the agreement (cumulative EBIT and/ or EBITDA; cumulative cash flow; return on inputs of strategic projects; and EHS environment, health and safety, and governance as strategic initiatives). The plan consists of four tranches of three years each, from January 2018 to January 2021, and considers 89,107 shares per tranche. The agreed remuneration plan is conditioned to the continuation of the beneficiaries as senior management and managers of the Group. The agreed remuneration related to the fourth and third tranche was paid in 2024 and 2023 for the amounts of €3.4 million and €5.8 million, respectively. In 2022, the Parent Company approved another compensation plan for certain members of the Group’s management. This compensation plan was linked to the evolution of certain key indicators determined in the agreement (cumulative EBITDA; cumulative cash flow; ESG targets; and share price development). The plan consists of four tranches of three years each, from January 2022 to January 2025, and considers 82,392 shares per tranche. The agreed remuneration plan is conditioned to the continuation of the beneficiaries as senior management and managers of the Group. The main assumptions correspond to the estimation of the degree of achievement of the key indicators and the fair value of the shares. In this regard, in 2024 the Group’s Directors estimate a degree of achievement of these indicators of 75% for the fifth tranche and 100% for the remaining tranches using the market value of Befesa, S.A. shares at 31 December 2024, as a reference. In 2023, the Group’s Directors estimate a degree of achievement of these indicators of 100% for all tranches, taking as reference the market value of Befesa, S.A. shares at 31 December 2023. On 26 April 2021, the Board of Directors of the Company granted a Transformational Growth Incentive Plan (TGIP) incentivising a transformational acquisition opportunity. This TGIP is linked to the evolution of the share price, consisting of 187,500 shares that can be executed 1/3 in 2021, 1/3 in 2022 and the last 1/3 in 2023. The first 1/3 was paid in 2021 for an amount of €4.4 million, the second 1/3 was paid in 2022 for an amount of €2.7 million, and the third 1/3 was paid in 2023 for an amount of €1.6 million . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 265Befesa Annual Report 2024 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 25. Information on the environment The Parent Company and its subsidiaries maintain their production facilities in such a way as to meet the standards established by the environmental legislation of the countries in which the facilities are located. Property, plant and equipment include investments made in assets intended to minimise the environmental impact and protect and improve the environment (Note 1) . 26. Auditors’ fees Fees corresponding to services rendered by KPMG Audit S.à.r.l. and network firms for the years ended 31 December 2024 and 2023, irrespective of the invoice date, are as follows: Thousands of euros 2024 2023 Audit services 1,057 783 Tax services 8 16 Other services 204 47 1,269 846 27. Earnings per share a) Basic earnings/(losses) per share (EUR per share) 2024 2023 From continuing operations attributable to the ordinary equity holders of the Company 1.27 1.45 From discontinued operations – – Total basic earnings/(losses) per share attributable to the ordinary equity holders of the Company 1.27 1.45 b) Diluted earnings/(losses) per share (EUR per share) As at 31 December 2024 and 2023, there are no differences between basic and diluted earnings/(losses) per share . 266 Befesa Annual Report 2024 c) Reconciliation of earnings used in calculating earnings per share Thousands of euros 2024 2023 Profit/(Loss) for the year from continuing operations 54,086 57,568 Less non-controlling interests from continuing operations (3,266) 404 Profit/(Loss) from continuing operations attributable to the ordinary equity holders of the Company 50,820 57,972 Profit/(Loss) attributable to the ordinary equity holders of the Company used in calculating basic and diluted earnings per share 50,820 57,972 d) Weighted average number of shares used as the denominator Number in thousand 2024 2023 Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share (Note 14) 40,000 40,000 As at 31 December 2024 and 2023, there are no financial instruments or other contracts that might have a significant dilutive effect on the calculation of earnings per share. 28. Subsequent events On 19 March 2025, Befesa repriced its TLB, reducing its interest rate by 50 bps to Euribor +225 bps with a floor of 0%. The facility’s long-term July 2029 maturity date and all other contractual terms remain unchanged . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 267Befesa Annual Report 2024 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued 28. Subsequent events On 19 March 2025, Befesa repriced its TLB, reducing its interest rate by 50 bps to Euribor +225 bps with a floor of 0%. The facility’s long-term July 2029 maturity date and all other contractual terms remain unchanged. Subsidiaries 2024 Thousands of euros (31/12/2024) Entity Country Activity % interest Auditor Capital Reserves Translation differences Results Interim dividend Subsidiaries: Befesa Medio Ambiente, S.L.U. Spain Holding 100% KPMG 150,003 820,038 – 116,526 – – Befesa Management Services GmbH Germany Holding 100% KPMG 25 2,458 (30) 263 – – MRH Residuos Metálicos, S.L.U. Spain Holding 100% (1) 15,600 13,679 – 57,607 (53,000) – Befesa Salzschlacke GmbH Germany Aluminium waste treatment 100% KPMG 25 3,843 – 1,673 – – Befesa Aluminium Germany GmbH Germany Aluminium waste treatment 100% KPMG 25 303 – – – – Befesa Aluminio, S.L.U. Spain Recovery of metals 100% KPMG 4,767 64,150 – 11, 383 – Befesa Aluminio Comercializadora, S.L. Spain Marketing company 100% (1) 90 21 – – – – Befesa Zinc, S.A.U. Spain Holding 100% KPMG 25,010 498,176 – 63,619 (60,000) – Befesa Zinc Comercial, S.A. (Sociedad Unipersonal) Spain Sale of recycled waste 100% KPMG 60 7,529 – 325 – – Befesa Zinc Aser, S.A. (Sociedad Unipersonal) Spain Recovery of metals 100% KPMG 4,260 7,153 – 46,024 (40,850) – Befesa Zinc Sur, S.L. (Sociedad Unipersonal) Spain Recovery of metals 100% (1) 605 202 – (3) – – Befesa Zinc Óxido, S.A. (Sociedad Unipersonal) Spain Recovery of metals 100% KPMG 1,102 5,364 – 564 – – Befesa Steel R&D, S.L. (Sociedad Unipersonal) Spain Development of projects and technology innovation 100% (1) 3 797 – 59 – – Befesa Circular Alloys, S.L.U. Spain Holding 100% (1) 3 14,512 – 5,924 – Befesa Circular Alloys France, S.A.S. France Recovery of metals 100% KPMG 4,000 1,206 – 3,096 – Befesa Circular Alloys Sweden, AB Sweden Recovery of metals 100% KPMG 5,309 2,895 (351) (3,236) – 268 Befesa Annual Report 2024 Thousands of euros (31/12/2024) Entity Country Activity % interest Auditor Capital Reserves Translation differences Results Interim dividend – Befesa Silvermet Turkey, S.L. Spain Holding 53.60% (1) 9,175 740 – (111) – Befesa Silvermet İskenderun Çelik Tozu Geri Dönüşümü, A.S. Turkey Recovery of metals 100% E&Y 5,707 42,185 (30,467) 5,914 – Befesa Silvermet Dış Ticaret, A.S. Turkey Recovery of metals 100% (1) 2,674 4,923 (4,987) 874 – – Befesa Zinc Germany GmbH Germany Holding 100% (1) 25 552,394 – 20,059 (20,000) Befesa Steel Services GmbH Germany Sales and logistics 100% KPMG 2,045 68,004 – (28) – Befesa Zinc Duisburg GmbH Germany Recovery of metals 100% KPMG 5,113 14,083 – 38 – Befesa Zinc Korea Co., Ltd. South Korea Recovery of metals 100% KPMG 17,015 20,756 (4,200) 7,052 – Befesa Pohang Co., Ltd. South Korea Recovery of metals 100% KPMG 1,770 5,883 (1,150) 1,422 – Befesa Zinc Freiberg GmbH & Co., KG Germany Recovery of metals 100% KPMG 1,000 12,628 – 245 – Befesa Zinc Environmental Protection Technology (Jiangsu) Co., Ltd. China Recovery of metals 100% KPMG 21,407 (9,877) 799 (1,828) – Befesa (China) Investment Co., Ltd. China Holding 100% KPMG 18,825 (1,084) 236 187 – Befesa Zinc Environmental Protection Technology (Henan) Co., Ltd. China Recovery of metals 100% KPMG 17,890 (6,197) (11) (7,751) – Befesa Zinc Gravelines S.A.S. France Waelz oxide treatment 100% KPMG 8,000 327 – 395 – Befesa Holding US, Inc. US Befesa Zinc US, Inc. US Waelz oxide treatment 100% ( 1 ) / ( 2 ) 549,152 (798) 32,044 21,150 – Befesa Zinc Metal, Inc. US Zinc refining 100% ( 1 ) / ( 2 ) 107,466 (37,306) (9,708) (48,275) – Befesa Zinc Recytech, S.A.S. (3) France Recovery of metals 100% Deloitte 6,240 3,718 – 14,762 – (1) Companies not subject to statutory audit (2) Audit for Group audit purposes by KPMG (3) Name changed in 2024 from Recytech, S.A. to Befesa Zinc Recytech, S.A.S . 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 269Befesa Annual Report 2024 Notes to the consolidated financial statements as at 31 December 2024 (Thousands of euros) continued Subsidiaries 2023 Thousands of euros (31/12/2023) Entity Country Activity % interest Auditor Capital Reserves Translation differences Results Interim dividend Subsidiaries: Befesa Medio Ambiente, S.L.U. Spain Holding 100% KPMG 150,003 803,745 – 51,582 – – Befesa Management Services GmbH Germany Holding 100% KPMG 25 2,191 (30) 267 – – MRH Residuos Metálicos, S.L.U. Spain Holding 100% (1) 15,600 14,997 – (1,318) – – Befesa Salzschlacke GmbH Germany Aluminium waste treatment 100% KPMG 25 22,192 – 9,651 – – Befesa Aluminium Germany GmbH Germany Aluminium waste treatment 100% KPMG 25 303 – – – – Befesa Aluminio, S.L.U. Spain Recovery of metals 100% KPMG 4,767 79,285 – 14,957 – Befesa Aluminio Comercializadora, S.L. Spain Marketing company 100% (1) 90 21 – – – – Befesa Zinc, S.A.U. Spain Holding 100% KPMG 25,010 413,275 – 43,901 (39,000) – Befesa Zinc Comercial, S.A. (Sociedad Unipersonal) Spain Sale of recycled waste 100% KPMG 60 7,105 – 424 – – Befesa Zinc Aser, S.A. (Sociedad Unipersonal) Spain Recovery of metals 100% KPMG 4,260 15,376 – 33,451 (30,800) – Befesa Zinc Sur, S.L. (Sociedad Unipersonal) Spain Recovery of metals 100% (1) 605 206 – (3) – – Befesa Zinc Óxido, S.A. (Sociedad Unipersonal) Spain Recovery of metals 100% KPMG 1,102 6,113 – (749) – – Befesa Steel R&D, S.L. (Sociedad Unipersonal) Spain Development of projects and technology innovation 100% (1) 3 787 – 10 – – Befesa Circular Alloys, S.L.U. (3) Spain Holding 100% (1) 3 10,342 – 10,169 – Befesa Circular Alloys France, S.A.S. (4) France Recovery of metals 100% KPMG 4,000 (154) – 7,241 – Befesa Circular Alloys Sweden, AB (5) Sweden Recovery of metals 100% KPMG 5,309 (3,956) (261) 1,600 – – Befesa Silvermet Turkey, S.L., Spain Holding 53.60% (1) 9,175 800 – (60) – 270 Befesa Annual Report 2024 Thousands of euros (31/12/2023) Entity Country Activity % interest Auditor Capital Reserves Translation differences Results Interim dividend Befesa Silvermet İskenderun Çelik Tozu Geri Dönüşümü, A.S. Turkey Recovery of metals 100% E&Y 4,968 46,260 (29,103) (9,851) – Befesa Silvermet Dış Ticaret, A.S. Turkey Recovery of metals 100% (1) 2,035 4,060 (4,758) 452 – – Befesa Zinc Germany GmbH Germany Holding 100% KPMG 25 430,14 4 – 12,250 (15,000) Befesa Steel Services GmbH Germany Sales and logistics 100% KPMG 2,045 67,970 – 33 – Befesa Zinc Duisburg GmbH Germany Recovery of metals 100% KPMG 5 ,113 17,207 – (53) – Befesa Zinc Korea Co., Ltd. South Korea Recovery of metals 100% KPMG 17,015 34,798 (1,448) (505) – Befesa Pohang Co., Ltd. South Korea Recovery of metals 100% KPMG 1,770 3,827 (646) 2,061 – Befesa Zinc Freiberg GmbH & Co., KG Germany Recovery of metals 100% KPMG 1,000 18,118 – 200 – Befesa Zinc Environmental Protection Technology (Jiangsu) Co., Ltd. China Recovery of metals 100% KPMG 21,407 (5,896) 426 (3,982) – Befesa (China) Investment Co, Ltd. China Holding 100% KPMG 18,825 (422) 228 (662) – Befesa Zinc Environmental Protection Technology (Henan) Co., Ltd. China Recovery of metals 100% KPMG 17,890 (1,034) (209) (5,163) – Befesa Zinc Gravelines S.A.S. France Waelz oxide treatment 100% KPMG 8,000 273 – 1,677 – Befesa Holding US, Inc. US Befesa Zinc US, Inc. US Waelz oxide treatment 100% (1)/(2) 424,152 22,345 (494) (1,725) – Befesa Zinc Metal, Inc. US Zinc refining 100% (1)/(2) 107,466 (15,490) (11,4 64) (21,055) – Recytech, S.A. France Recovery of metals 50% Deloitte 6,240 13,450 – 7, 960 – (1) Companies not subject to statutory audit (2) Audit for Group audit purposes by Grant Thornton (3) Name changed in 2023 from Befesa Stainless Recycling, S.L. to Befesa Circular Alloys, S.L.U. (4) Name changed in 2023 from Befesa Valera, S.A.S. to Befesa Circular Alloys France, S.A.S. ( 5) Name changed in 2023 from Befesa ScanDust AB to Befesa Circular Alloys Sweden, AB. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 271Befesa Annual Report 2024 Javier Molina Executive Chair Asier Zarraonandia Chief Executive Officer We, Javier Molina Montes, Asier Zarraonandia Ayo and Rafael Pérez Gómez, respectively Executive Chair, Chief Executive Officer and Chief Financial Officer, confirm, to the best of our knowledge, that: Responsibility statement y the2024consolidatedfinancial statements of Befesa S.A. presentedinthisAnnualReport, whichhavebeenpreparedin accordancewiththeInternational FinancialReportingStandardsas adoptedbytheEuropeanUnion, giveatrueandfairviewofthe assets,liabilities,financialposition andprofitorlossofBefesaS.A.and theundertakingsincludedinthe consolidationtakenasawhole;and y themanagementreportincludes afairreviewofthedevelopment andperformanceofthebusiness andthepositionofBefesaS.A.and theundertakingsincludedinthe consolidationtakenasawhole, togetherwithadescriptionofthe principalrisksanduncertaintiesthat theyface. Luxembourg,29April2025 Consolidated financial statements Rafael Pérez Chief Financial Officer 272 Befesa Annual Report 2024 Independent auditor’s report KPMG Audit S.à r.l. Tel: +352 22 51 51 1 39, Avenue John F. Kennedy Fax: +352 22 51 71 L-1855 Luxembourg E-mail: info@kpmg.lu Internet: www.kpmg.lu ©2025 KPMG Audit S.à r.l., a Luxembourg entity and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. R.C.S Luxembourg B 149133 To the Shareholders of Befesa S.A. 68 -70, Boulevard de la Pétrusse L -2320 Luxembourg Luxembourg REPORT OF THE REVISEUR D’ENTREPRISES AGREE Report on the audit of the consolidated financial statements Opinion We have audited the consolidated financial statements of Befesa S.A. and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 31 December 2024, and the consolidated income statement, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information and other explanatory information. In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2024, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the European Union. Basis for opinion We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (the “Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier (the “CSSF”). Our responsibilities under the EU Regulation N° 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the « Responsibilities of “réviseur d'entreprises agréé” for the audit of the consolidated financial statements » section of our report. We are also independent of the Group in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Responsibilities of the Board of Directors and Those Charged with Governance for the consolidated financial statements The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as adopted by the European Union, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is responsible for presenting and marking up the consolidated financial statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format (“ESEF Regulation”). In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. Responsibilities of the “réviseur d’entreprises agréé” for the audit of the consolidated financial statements The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. Our responsibility is to assess whether the consolidated financial statements have been prepared in all material respects with the requirements laid down in the ESEF Regulation. As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: — Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, 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 procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. — Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. KPMG Audit S.à r.l. Tel: +352 22 51 51 1 39, Avenue John F. Kennedy Fax: +352 22 51 71 L-1855 Luxembourg E-mail: info@kpmg.lu Internet: www.kpmg.lu ©2025 KPMG Audit S.à r.l., a Luxembourg entity and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. R.C.S Luxembourg B 149133 To the Shareholders of Befesa S.A. 68 -70, Boulevard de la Pétrusse L -2320 Luxembourg Luxembourg REPORT OF THE REVISEUR D’ENTREPRISES AGREE Report on the audit of the consolidated financial statements Opinion We have audited the consolidated financial statements of Befesa S.A. and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 31 December 2024, and the consolidated income statement, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information and other explanatory information. In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2024, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the European Union. Basis for opinion We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (the “Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier (the “CSSF”). Our responsibilities under the EU Regulation N° 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the « Responsibilities of “réviseur d'entreprises agréé” for the audit of the consolidated financial statements » section of our report. We are also independent of the Group in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 273Befesa Annual Report 2024 Recoverability of the goodwill from Befesa Zinc US, Inc. a) Why the matter was considered to be one of the most significant in our audit of the consolidated financial statements of the current period On 17 August 2021, the Group, through Befesa Holding US, Inc, acquired a 100% interest in American Zinc Recycling Corp. (currently Befesa Zinc US, Inc). Befesa Zinc US, Inc has its registered office in Pittsburgh, Pennsylvania and its principal activity is providing electric arc furnace steel dust (EAFD) recycling services. The main reason for the business combination was to enter the US market and become a global leader in steel dust recycling. As a result of the business combination, a goodwill of EUR 228,674 thousand resulting from the excess of net assets acquired over the cost of acquisition arose on the date of acquisition. As of 31 December 2024, the goodwill from Befesa Zinc US, Inc. is EUR 258,929 thousand, which represents 40.1% of the total goodwill amount of Befesa S.A.. We identified the goodwill from Befesa Zinc US, Inc., and particularly the recoverability of the asset as a key audit matter because of its significance to the consolidated financial statements, being Befesa Zinc US, Inc. a relatively recent cash generating unit acquired and because of the significant judgement of the management and estimation required in performing the valuation analysis which could be subject to error or potential management bias. b) How the matter was addressed in our audit Our procedures concerning the valuation of Befesa Zinc US, Inc goodwill included, but were not limited to, the following: — Assessing the appropriateness of the accounting treatment applied. — With the involvement of our valuation specialists: o Evaluating the methodology applied by management for the valuation of goodwill; o Testing the mathematical accuracy of the valuation model used; o Assessing the key valuation assumptions; o Validating key inputs and data used in the valuation model. — Assessing whether the Group’s disclosures in the consolidated financial statements reflect the requirements of the prevailing accounting standards. Other information The Board of Directors is responsible for the other information. The other information comprises the information stated in the consolidated annual report including the management report and the Corporate Governance Statement but does not include the consolidated financial statements and our report of the “réviseur d'entreprises agréé” thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. Independent auditor’s report continued 274 Befesa Annual Report 2024 Responsibilities of the Board of Directors and Those Charged with Governance for the consolidated financial statements The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards as adopted by the European Union, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is responsible for presenting and marking up the consolidated financial statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format (“ESEF Regulation”). In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. Responsibilities of the “réviseur d’entreprises agréé” for the audit of the consolidated financial statements The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. Our responsibility is to assess whether the consolidated financial statements have been prepared in all material respects with the requirements laid down in the ESEF Regulation. As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: — Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, 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 procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. — Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 275Befesa Annual Report 2024 — Conclude on the appropriateness of the Board of Directors’ 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 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 report of the “réviseur d’entreprises agréé” to the related disclosures in the consolidated 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 report of the “réviseur d’entreprises agréé”. However, future events or conditions may cause the Group to cease to continue as a going concern. — Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. — Obtain sufficient appropriate audit evidence regarding the financial information of the entities and 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 those charged with governance regarding, 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 those charged with governance with a statement 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, actions taken to eliminate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter. Report on other legal and regulatory requirements We have been appointed as “réviseur d’entreprises agréé” by the Shareholders on 20 June 2024 and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 6 years. The consolidated management report is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements. We confirm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014 were not provided and that we remained independent of the Group in conducting the audit. We have checked the compliance of the consolidated financial statements of the Group as at 31 December 2024 with relevant statutory requirements set out in the ESEF Regulation that are applicable to consolidated financial statements. For the Group it relates to: — consolidated financial statements prepared in a valid xHTML format; In our opinion, the consolidated financial statements of Befesa S.A. as at 31 December 2024, identified as 222100VXGA8L6J4ZWG61-2024-12-31-0-en.zip, have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation. Independent auditor’s report continued 276 Befesa Annual Report 2024 Our audit report only refers to the consolidated financial statements of Befesa S.A. as at 31 December 2024, identified as 222100VXGA8L6J4ZWG61-2024-12-31-0-en.zip, prepared and presented in accordance with the requirements laid down in the ESEF Regulation, which is the only authoritative version Luxembourg, 29 April 2025 KPMG Audit S.à r.l. Cabinet de révision agréé Stephan Lego-Deiber 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 277Befesa Annual Report 2024 06 Statutory financial statements 280 Balancesheet 284 Profitandlossaccount 286 Notestothestatutoryfinancialstatements 294 Responsibilitystatement 295 Independentauditor’sreport 278 Befesa Annual Report 2024 Befesa Annual Report 2024 279 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information Note(s) 2024 2023 Assets A. Subscribed capital unpaid  I. Subscribedcapitalnotcalled  II. Subscribedcapitalcalledbutunpaid B. Formation expenses 3 1,063,163.00 1,794,587.00 C. Fixed assets 1,247,026 ,151.00 1,223,026,151.00  I. Intangibleassets   1. Costsofdevelopment   2. Concessions,patents,licences,trademarksand similarrightsandassets,iftheywere    a) acquiredforvaluableconsiderationandneed notbeshownunderC.I.3    b) createdbytheundertakingitself   3. Goodwill,totheextentthatitwasacquiredfor valuableconsideration   4. Paymentsonaccountandintangibleassets underdevelopment  II. Tangibleassets   1. Landandbuildings   2. Plantandmachinery   3. Otherfixturesandfittings,toolsandequipment   4. Paymentsonaccountandtangibleassetsinthe courseofconstruction  III. Financialassets 4 1,247,026 ,151.00 1,223,026,151.00   1. Sharesinaffiliatedundertakings 597,026,151.00 597,026,151. 0 0   2. Loanstoaffiliatedundertakings 650,000,000.00 626,000,000.00   3. Participatinginterests   4. Loanstoundertakingswithwhichthe undertakingislinkedbyvirtueofparticipating interests   5. Investmentsheldasfixedassets   6. Otherloans Balance sheet for the year ended 31 December 2024 (Expressed in euros) 280 Befesa Annual Report 2024 Note(s) 2024 2023 D. Current assets 4,591,788.00 7,069,533.00  I .  S t o c k s   1. Rawmaterialsandconsumables   2. Workinprogress   3. Finishedgoodsandgoodsforresale   4. Paymentsonaccount  I I .  D e b t o r s 5 4,566,283.00 7,054,308.00   1 .  T r a d e  d e b t o r s    a) becomingdueandpayablewithinoneyear    b) becomingdueandpayableaftermorethan oneyear   2. Amountsowedbyaffiliatedundertakings 4,566,283.00 7,054,308.00    a) becomingdueandpayablewithinoneyear 5.1 4,185,685.00 5,454,512.00    b) becomingdueandpayableaftermorethan oneyear 5.2 380,598.00 1,599,796.00   3. Amountsowedbyundertakingswithwhichthe undertakingislinkedbyvirtueofparticipating interests    a) becomingdueandpayablewithinoneyear    b) becomingdueandpayableaftermorethan oneyear   4 .  O t h e r  d e b t o r s    a) becomingdueandpayablewithinoneyear    b) becomingdueandpayableaftermorethan oneyear  I I I .  I n v e s t m e n t s   1. Sharesinaffiliatedundertakings   2 .  O w n  s h a r e s   3. Otherinvestments  IV. Cashatbankandinhand 25,505.00 15,225.00 E. Prepayments 6 5,415,009.00 3,310,533.00 TOTAL (ASSETS) 1,258,096,111.00 1,235,200,804.00 281Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information Note(s) 2024 2023 CAPITAL, RESERVES AND LIABILITIES A Capitalandreserves 7 598,083,750.00 600,321,282.00  I. Subscribedcapital 111,047,595.00 111,047,595.00  II. Sharepremiumaccount 532,868,268.00 532,868,268.00  III. Revaluationreserve  I V .  R e s e r v e s 57,197,732.00 35,050,242.00   1. Legalreserve 11,104,76 0.00 11,104,760.0 0   2. Reserveforownshares   3. Reservesprovidedforbythearticlesof association   4. Otherreserves,includingthefairvaluereserve 46,092,972.00 23,945,482.00    a) otheravailablereserves 46,092,972.00 23,945,482.00    b) othernon-availablereserves  V. Profitorlossbroughtforward -129,992,312.00 -129,992,312.00  VI. Profitorlossforthefinancialyear 26,962,467.00 51,347,489.00  VII. Interimdividends  VIII.Capitalinvestmentsubsidies B. Provisions 8 102,511.00 52, 511.00  1. Provisionsforpensionsandsimilarobligations  2. Provisionsfortaxation  3. Otherprovisions 102,511.00 52,511.00 C. Creditors 9 654,494,841.00 631,631,749.00  1. Debentureloans   a) Convertibleloans    i) becomingdueandpayablewithinoneyear    ii) becomingdueandpayableaftermorethan oneyear   b) Non-convertibleloans    i) becomingdueandpayablewithinoneyear    ii) becomingdueandpayableaftermorethan oneyear  2. Amountsowedtocreditinstitutions 654,185,685.00 631,454,512.00   a) becomingdueandpayablewithinoneyear 4,185,685.00 5,454,512.00   b) becomingdueandpayableaftermorethanone year 650,000,000.00 626,000,000.00  3. Paymentsreceivedonaccountofordersinsofaras theyareshownseparatelyasdeductionsfromstocks Balance sheet for the year ended 31 December 2024 (Expressed in euros) continued 282 Befesa Annual Report 2024 Note(s) 2024 2023   a) becomingdueandpayablewithinoneyear   b) becomingdueandpayableaftermorethanone year  4. Tradecreditors 268,549.00 134,452.00   a) becomingdueandpayablewithinoneyear 268,549.00 134,452.00   b) becomingdueandpayableaftermorethanone year  5. Billsofexchangepayable   a) becomingdueandpayablewithinoneyear   b) becomingdueandpayableaftermorethanone year  6. Amountsowedtoaffiliatedundertakings   a) becomingdueandpayablewithinoneyear   b) becomingdueandpayableaftermorethanone year  7. Amountsowedtoundertakingswithwhichthe undertakingislinkedbyvirtueofparticipating interests   a) becomingdueandpayablewithinoneyear   b) becomingdueandpayableaftermorethanone year  8. Othercreditors 40,607.0 0 42,785.00   a) Taxauthorities 40,607.00 42,785.00   b) Socialsecurityauthorities   c )  O t h e r  c r e d i t o r s    i) becomingdueandpayablewithinoneyear    ii) becomingdueandpayableaftermorethan oneyear D. Deferred income 10 5,415,009.00 3,195,262.00 TOTAL (CAPITAL, RESERVES AND LIABILITIES) 1,258,096,111.0 0 1,235,200,804.00 283Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information Note(s) 2024 2023 PROFIT AND LOSS ACCOUNT 1. Net turnover 2. Variation in stocks of finished goods and in work in progress 3. Work performed by the undertaking for its own purposes andcapitalised 4. Other operating income 11 974,134.0 0 1,236,766.00 5. Raw materials and consumables and other external expenses -667, 847.0 0 -892,597.00  a) Rawmaterialsandconsumables  b) Otherexternalexpenses 12 - 667,847.00 -892,597.00 6. Staff costs 13 – –  a) Wagesandsalaries  b) Socialsecuritycosts   i) relatingtopensions   ii) othersocialsecuritycosts  c) Otherstaffcosts 7. Value adjustments 14-3 -731,424.00 -729,425.00  a) inrespectofformationexpensesandoftangibleand intangiblefixedassets -731,424.00 -729,425.0 0  b) inrespectofcurrentassets 8. Other operating expenses 15 -732,908.00 -701,424.00 9. Income from participating interests 16 28,000,000.00 52,474,998.00  a) derivedfromaffiliatedundertakings 28,000,000.00 52,474,998.00  b) otherincomefromparticipatinginterests 10. Income from other investments and loans forming part of the fixedassets 17 38,894,376.00 32,814,572.00  a) derivedfromaffiliatedundertakings 38,894,376.00 32,814,572.00  b) otherincomenotincludedundera) Profit and loss account for the year ended 31 December 2024 (Expressed in euros) 284 Befesa Annual Report 2024 Note(s) 2024 2023 11. Other interest receivable and similar income 18 12,616,138.00 10,808,836.00  a) derivedfromaffiliatedundertakings 1,434,569.00 1,472,832.00  b) otherinterestandsimilarincome 11,181,569.00 9,336,004.00 12. Share of profit or loss of undertakings accounted for under the equity method 13. Value adjustments in respect of financial assets and of investments held as current assets 14. Interest payable and similar expenses 19 -51,382,502.00 -43,659,422.00  a) concerningaffiliatedundertakings -11,181,405.00 -9,356,567.00  b) otherinterestandsimilarexpenses -40,201,097.00 -34,302,855.00 15. Tax on profit or loss 16. Profit or loss after taxation 26,969,967.00 51,352,304.00 17. Other taxes not shown under items 1 to 16 20 -7,500.00 -4,815.00 18. Profit or loss for the financial year 26,962,467.00 51,347,489.00 285Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 1. General information BefesaS.A.(the“Company”)(formerlyBilbaoMidcoS.àr.l)wasincorporatedinLuxembourgon31May2013asa“sociétéà responsabilitélimitée”subjecttotheLuxembourglawforanunlimitedperiodoftime.On18October2017,theshareholders resolvedtoconverttheCompanyfromitscurrentformofa“sociétéàresponsabilitélimitée”intoa“sociétéanonyme” withoutcreatinganewlegalentityoraffectingthelegalexistenceorpersonalityoftheCompanyinanymanner,andto changethenameoftheCompanyintoBefesaS.A.TheregisteredofficeoftheCompanyisestablishedat68-70Boulevard delaPétrusse,L-2320Luxembourg. TheregisteredofficeoftheCompanyisestablishedinLuxembourgandtheCompanynumberwiththeRegistrede CommerceisB177697.ThefinancialyearoftheCompanystartson1Januaryandendson31December. TheobjectoftheCompanyistheacquisition,holdinganddisposalofinterestsinLuxembourgand/orinforeigncompanies andundertakings,aswellastheadministration,developmentandmanagementofsuchinterests.TheCompanymayprovide loansandfinancinginanyotherkindorform,orgrantguaranteesorsecurityinanykindorform,forthebenefitofthe companiesandundertakingsformingpartofthegroupofwhichtheCompanyisamember.TheCompanymayalsoinvestin realestate,inintellectualpropertyrightsoranyothermovableorimmovableassetsinanykindorform.TheCompanymay borrowinanykindorformandissuebonds,notesoranyotherdebtinstrumentsaswellaswarrantsorothershare subscriptionrights.Inageneralfashion,theCompanymaycarryoutanycommercial,industrialorfinancialoperation,which itmaydeemusefulintheaccomplishmentanddevelopmentofitsobject. FollowingtheInitialPublicOffer(“IPO”)heldon3November2017,theCompanyislistedontheFrankfurtStockExchange (ISINnumber:LU1704650164). TheCompanyalsopreparesconsolidatedfinancialstatementsinaccordancewithIFRSAccountingstandardsasadopted bytheEuropeanUnion(“IFRS”).Theconsolidatedfinancialstatementsandthemanagementreportareavailableatthe registeredofficeoftheCompany. 2. Summary of significant accounting policies and valuation methods 2.1 Basis of preparation TheannualaccountsoftheCompanyarepreparedinaccordancewithLuxembourglegalandregulatoryrequirements. AccountingpoliciesandvaluationrulesfollowthehistoricalcostconventionandaredeterminedandappliedbytheBoardof Directors,inaccordancewiththeonesprescribedbythelawof19December2002,asamended. Thepreparationofannualaccountsrequirestheuseofcertaincriticalaccountingestimates.ItalsorequirestheBoardof Directorstoexerciseitsjudgementintheprocessofapplyingtheaccountingpolicies.Changesinassumptionsmayhavea significantimpactontheannualaccountsintheperiodinwhichtheassumptionschanged.TheBoardofDirectorsbelieves thattheunderlyingassumptionsareappropriateandthattheannualaccountsthereforepresentthefinancialpositionand resultsfairly. TheBoardofDirectorsmakesestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesinthe nextfinancialyear.Estimatesandjudgementsarecontinuallyevaluatedandarebasedonhistoricalexperienceandother factors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances. TheCompany’sannualaccountshavebeenpreparedonagoingconcernbasiswhichassumesthattheCompanywillbe abletomeetitsliabilitiesastheyfalldue. Notes to the statutory financial statements for the year ended 31 December 2024 (Expressed in euros) 286 Befesa Annual Report 2024 2.2 Formation expenses Formationexpensesarewrittenoffwithinaperiodoffiveyears. 2.3 Financial assets Sharesinaffiliatedundertakingsarevaluedatpurchasepriceincludingtheexpensesincidentalthereto. Loanstoaffiliatedundertakingsarevaluedatnominalvalueincludingtheexpensesincidentalthereto. IncaseofadurabledepreciationinvalueaccordingtotheopinionoftheBoardofDirectors,valueadjustmentsaremadein respectoffinancialassets,sothattheyarevaluedatthelowerfiguretobeattributedtothematthebalancesheetdate. Thesevalueadjustmentsarenotcontinuedifthereasonsforwhichthevalueadjustmentsweremadehaveceasedtoapply. 2.4 Debtors Debtorsarevaluedattheirnominalvalue.Theyaresubjecttovalueadjustmentswheretheirrecoveryiscompromised. Thesevalueadjustmentsarenotcontinuedifthereasonsforwhichthevalueadjustmentsweremadehaveceasedtoapply. 2.5 Prepayments Thisassetitemincludesexpenditureincurredbutrelatingtoasubsequentfinancialyear. 2.6 Provisions Provisionsareintendedtocoverlossesordebtsofwhichthenatureisclearlydefinedandwhich,atthedateofthebalancesheet, areeitherlikelytobeincurredorcertaintobeincurredbutuncertainastotheiramountorastothedateonwhichtheywillarise. Provisionsmayalsobecreatedinordertocoverchargeswhichhavetheirorigininthefinancialyearunderrevieworinaprevious financialyear,thenatureofwhichisclearlydefinedandwhichatthedateofthebalancesheetareeitherlikelytobeincurredor certaintobeincurredbutuncertainastotheiramountorastothedateonwhichtheywillarise. Provision for taxation ProvisionsfortaxationcorrespondingtothedifferencebetweenthetaxliabilityestimatedbytheCompanyandtheadvance paymentsforthefinancialyearsforwhichthetaxreturnhasnotyetbeenfiledarerecordedunderthecaption“Provisions”. 2.7 Creditors Creditorsarerecordedattheirreimbursementvalue.Whentheamountrepayableonaccountisgreaterthantheamount received,thedifferenceisshownasanassetandiswrittenoffovertheperiodofthedebt. 2.8 Deferred income Thisliabilityitemincludesincomereceivedbutrelatingtoasubsequentfinancialyear. 2.9 Value adjustments Valueadjustmentsarededucteddirectlyfromtherelatedasset. 2.10 Income from participating interests Incomefromdividendsisrecognisedwhentheshareholder’srighttoreceivepaymentisestablished. 2.11 Interest income and charges Interestincomeandinterestchargesareaccruedonatimelybasis,byreferencetotheprincipaloutstandingandatthe nominalinterestrateapplicable. 287Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 3. Formation expenses Theincreaseinthecapitalandreservesofthe16June2021hadformationexpensesof3,649,126EUR.Asof 31December2024,731,424EUR(2023:729,425EUR)havebeenpassedthroughprofitandloss,leaving1,063,163EUR (2023:1,794,587EUR)inthebalancesheet. 4. Financial assets Financial assets held at cost less impairment – movements gross book value Gross book value – opening balance Additions Disposals Transfers Gross book value – closing balance Sharesinaffiliatedundertakings 597,026,151 – – – 597,026,151 Loanstoaffiliatedundertakings 626,000,000 24,000,000 – – 650,000,000 Total 1,223,026,151 24,000,000 – – 1,247,026,151 Financial assets held at cost less impairment – movements net book value Net book value – opening balance Additions Disposals Transfers Net book value – closing balance Sharesinaffiliatedundertakings 597,026,151 – – – 597,026,151 Loanstoaffiliatedundertakings 626,000,000 24,000,000 – – 650,000,000 Total 1,223,026,151 24,000,000 – – 1,247,026,151 IntheopinionoftheBoardofDirectors,nodurabledecreaseinvaluehasoccurredonsharesinaffiliatedundertakingsasat 31December2024,neitherasat31December2023;accordingly,novalueadjustmentwasrecorded. UndertakinginwhichtheCompanyholdsatleast20%intheirsharecapitalisasfollows: As at 31/12/2024 Name Registered office % holding Net book value (EUR) Net equity (EUR) Net result (EUR) BefesaMedio Ambiente,S.L.U. Auditedaccount Spain 100% 597,026,151 647,829,000 84,551,000 Loans to affiliated undertakings Counterparty Currency Amount Interest rate Maturity date LoantoBefesaMedioAmbiente,S.L.U. EUR 650,000,000 2.75%+Euribor 3M 09.07. 2029 ThefacilityagreementgrantedtotheCompany(Note9)andtheloangrantedtoBefesaMedioAmbiente,S.L.U.havethe sameprincipaleconomicterms. InJuly2024,theloantoBefesaMedioAmbiente,S.L.U.increasedbyEUR24,000,000inthesamewayastheTermLoanB (Note 9). IntheopinionoftheBoardofDirectors,nodurabledecreaseinvaluehasoccurredonloanstoaffiliatedundertakingsasat 31December2024,neitherasat31December2023;accordingly,novalueadjustmentwasrecorded. Notes to the statutory financial statements for the year ended 31 December 2024 (Expressed in euros) continued 288 Befesa Annual Report 2024 5. Debtors Debtors by category Within one year More than one year As at 31/12/2024 As at 31/12/2023 Amountsowedbyaffiliatedundertakings 4,185,685 380,598 4,566,283 7,054,308 Total 4,185,685 380,598 4,566,283 7,054,308 5.1 Debtors – becoming due and payable within one year Thedetailofdebtorsisthefollowing: Becoming due and payable within one year As at 31/12/2024 As at 31/12/2023 Accruedinterest–loanandinterestrateswapBefesaMedioAmbiente,S.L.U. 4,185,685 5,454,512 Total 4,185,685 5,454,512 5.2 Debtors – becoming due and payable in more than one year Becoming due and payable in more than one year As at 31/12/2024 As at 31/12/2023 ReciprocalCreditAgreementtoBefesaMedioAmbiente,S.L.U. 380,598 1,599,796 Total 380,598 1,599,796 Asat1December2020,theCompanysigneda“ReciprocalCreditAgreement”withBefesaMedioAmbiente,S.L.U. TheinterestisEuriborplusamarginof0.50%andthematurityisindefinite. IntheopinionoftheBoardofDirectors,therecoveryofdebtorsisnotcompromisedasat31December2024;accordingly, novalueadjustmentwasrecorded. 6. Prepayments Prepayments As at 31/12/2024 As at 31/12/2023 Transactioncosts 5,415,009 3,195,262 Insurancecosts – 115,271 Total 5,415,009 3,310,533 Transactioncostsrepresenttheoutstandingexpensesyettoberecognisedintheprofitandloss,relatedtothefacility agreementgrantedtotheCompany.In2024,anamountofEUR3,460,536intransactioncostswaspaidduetothe refinancingofthisfacilityagreement(Note9).Thesetransactioncostshavebeencapitalisedandareamortisedoverthe termofthefacility. 289Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 7. Capital and reserves Movements in capital and reserves Balance as at 31/12/2023 Allocation of preceding result Dividend Result of current year Balance as at 31/12/2024 Subscribedcapital 111,047,595 – – – 111,047,595 Sharepremium 532,868,268 – – – 532,868,268 Legalreserve 11,104,760 – – – 11,104,760 Otheravalaiblereserves 23,945,482 22,147,490 – – 46,092,972 Profitorlossbrought forward -129,992,312 – – – -129,992,312 Profitorlossforthe financialyear 51,347,489 -51,347,489 – 26,962,467 26,962,467 Dividend – 29,199,999 -29,199,999 – – Total 600,321,282 – -29,199,999 26,962,467 598,083,750 Thenumberofsharesasat31December2024and2023is39,999,998withaparvalueof2.78EUReachandfullypaidup. On9July2024,Befesadistributedtoitsshareholdersadividendof0.73EURpershare,amountingto29,199,999EUR,as approvedbytheAGMheldon20June2024. On6July2023,Befesadistributedtoitsshareholdersadividendof1.25EURpershare,amountingto49,999,998EUR,as approvedbytheAGMheldon15June2023. Legal reserve InaccordancewithrelevantLuxembourglaw,theCompanyisrequiredtotransferaminimumof5%ofitsnetprofitforeach financialyeartoalegalreserve.Thisrequirementceasestobenecessaryoncethebalanceonthelegalreservereaches 10%oftheissuedsharecapital.Ifthelegalreservelaterfallsbelowthe10%threshold,atleast5%ofnetprofitsmustagain beallocatedtothereserve.Thelegalreserveisnotavailablefordistributiontotheshareholders.Asat31December2024, thelegalreservereaches10%oftheissuedsharecapital. 8. Provisions Provisions As at 31/12/2024 As at 31/12/2023 Otherprovisions 102,511 52,511 Total 102,511 52,511 Asat31December2024and31December2023,theotherprovisionsconsistmainlyofprovisionforotheroperating expensesnotyetinvoiced. 9. Creditors Creditors by category Within one year Between 2 and 5 years As at 31/12/2024 As at 31/12/2023 Amountsowedtocredit institutions 4,185,685 650,000,000 654,185,685 631,454,512 Tradecreditors 268,549 – 268,549 134,452 Total 4,454,234 650,000,000 654,454,234 631,588,964 Notes to the statutory financial statements for the year ended 31 December 2024 (Expressed in euros) continued 290 Befesa Annual Report 2024 Amounts owed to credit institutions ThedebtwithcreditinstitutionsarisesfromafacilityagreementsignedbytheCompanyin2017. At31December2023,thefacilitiesagreementconsistedofaEUR626millionseniorsecuredTermLoanB(TLB)whichisa bulletwithmaturinginJuly2026,aEUR75millionrevolvingcreditfacility(RCF)maturinginJuly2025,anda€35million guaranteefacilitymaturinginJuly2025. On18July2024,theCompanysuccessfullycompletedtherefinancingofitsfacilitiesagreement,whichnowconsistsof: y TLBfacilitycommitmentinanamountofEUR650million,whichisabulletmaturinginJuly2029. y RCFinanamountofEUR100millionmaturinginJuly2028. y AguaranteefacilitycommitmentinanamountofEUR35millionmaturinginJuly2028. Followingthe2024refinancing,theinterestrateontheTLBwassetatEuriborplusa2.75%spread,whereastheRCFcarrieda spreadof2.25%(comparedtothepreviousratesin2023of2.00%and2.25%,respectively,priortotherefinancing).These spreadscouldbeadjusteddownwardsto2.25%inthecaseoftheTLBandto1.75%inthecaseoftheRCF,dependingonthe ratioofnetfinancialdebt/EBITDA. InMarch2020,Befesaarrangedaninterestrateswaptofixtheinterestfortheextensionperiodoftherefinancingsignedon 9July2019.Thefixedinterestratewas0.236%andthenotionalontheamounttotalledEUR316,000,000.Thepositivefair valueofthisIRSwasEUR11,255,909asat31December2024(2023:EUR20,845,348). Asat31December2024and2023,theamountsbecomingdueandpayablewithinoneyeararecomposedofaccrued interestonthefacility,andofaccruedinterestontheIRS. 10. Deferred income Deferred income As at 31/12/2024 As at 31/12/2023 Deferredincome–transactioncosts 5,415,009 3,195,262 Total 5,415,009 3,195,262 ThefacilityagreementgrantedtotheCompany(Note9)andtheloangrantedtoBefesaMedioAmbiente,S.L.U.(Note4)have thesameprincipaleconomicterms.Thetransactioncostsonthefacility(Note6)havebeenaccountedforequallyontheloan grantedtoBefesaMedioAmbiente,S.L.U.. 11. Other operating income TheotheroperatingincomeconsistsofthemanagementfeeforthecoststheCompanyrechargedtoitssubsidiaryBefesa MedioAmbiente,S.L.U.amountstoEUR974,134asatDecember2024(2023:EUR1,236,766). 12. Other external expenses Other external expenses As at 31/12/2024 As at 31/12/2023 Accounting,auditinganddomiciliationfees 94,112 118 ,451 Bankingandsimilarservices 3,400 3,248 Legalfees 183,526 232,947 Othercommisionsandprofessionalfees 378,933 528,924 Miscellaneous 7,876 9,027 Total 667,847 892,597 291Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 13. Staff costs Theaveragenumberofemployeesfortheyear2024wasnil(2023:nil). 14. Value adjustments As at 31/12/2024 As at 31/12/2023 Formationexpenses 731,424 729,425 Total 731,424 729,425 15. Other operating expenses TheotheroperatingexpensesconsistsmainlyofDirectors´fees. 16. Income from participating interests Asof31December2024,theincomefromparticipatinginterestsderivedfromaffiliatedundertakingsamountstoEUR28,000,000 duetothedividendreceivedfromBefesaMedioAmbiente,S.L.U.(Note4). Asof31December2023,theincomefromparticipatinginterestsderivedfromaffiliatedundertakingsamountsto EUR52,474,998duetoanetgainofEUR2,475,000resultingfromthesaleofBefesaManagementServices,GmbHandthe dividendreceivedfromBefesaMedioAmbiente,S.L.U.ofEUR49,999,998(Note4). 17. Income from other investments and loans forming part of the fixed assets Detailsofincomefromotherinvestmentsandloansformingpartofthefixedassetsfor2024and2023arefollows: As at 31/12/2024 As at 31/12/2023 Loanstoaffiliatedundertakings(LoantoBefesaMedioAmbiente,S.L.U.) 38,864,248 32,814,572 ReciprocalCreditAgreement 30,128 – Total 38,894,376 32,814,572 18. Other interest receivable and similar income As at 31/12/2024 As at 31/12/2023 Amortisationcosts 1,240,790 1,266,317 IncomeofIRSfromcreditinstitutions 11,181,405 9,335,799 Invoicesformanagementoffinancingactivitiesrechargedtoaffiliatedundertakings 193,779 206,515 Others 164 205 Total 12,616,138 10,808,836 19. Interest payable and similar expenses As at 31/12/2024 As at 31/12/2023 Interestcost 38,864,248 32,814,572 Cost of IRS () 11,181,405 9,335,799 ReciprocalCreditAgreement – 20,768 Amortisationcost 1,240,790 1,266,317 Otherexpenses 96,059 221,966 Total 51,382,502 43,659,422 () ThecostwasrechargedbyBefesaMedioAmbiente,S.L.U.(Note18). Notes to the statutory financial statements for the year ended 31 December 2024 (Expressed in euros) continued 292 Befesa Annual Report 2024 20. Taxation TheCompanyissubjecttothegeneraltaxregulationapplicableinLuxembourg. IntermsofPillarTwolegislation,Befesa,S.A.istheUltimateParentEntityoftheBefesaGroup.ThePillarTwolegislationhas beenenactedorsubstantivelyenactedincertainjurisdictionsinwhichtheGroupoperates.Thelegislationiseffectivefor theGroup’sfinancialyearbeginning1January2024.TheGroupisinscopeoftheenactedorsubstantivelyenacted legislationandhasperformedanassessmentoftheGroup’spotentialexposuretoPillarTwoincometaxes. TheassessmentofthepotentialexposuretoPillarTwoincometaxesisbasedonthemostrecenttaxfilings,country-by- countryreporting,andfinancialstatementsfortheconstituententitiesintheGroup.Basedontheassessment,theGroup wouldmeetatleastoneoftheTransitionalSafeHarbourstestsforthefollowingyears(2024–2026)inallthejurisdictions exceptinFrance,whereacapitalisationoftaxlosscarry-forwardscomingfrompreviousyearshasbeencarriedoutin2024. Withoutthisimpact,theFrenchjurisdictionwouldalsomeetatleastoneoftheTransitionalSafeHarbourstests.TheGroup doesnotexpectamaterialexposuretoPillarTwoincometaxesinanyjurisdiction. Befesa,S.A.maintainstaxcreditscomingfromtaxlosscarry-forwardsnotreflectedinbalanceintheamountof EUR8,907,672asat31December2024(2023:EUR8,866,304). 21. Off-balance sheet commitments and transactions On19October2017,theCompanyenteredintoafacilityagreement(Note9).Inthiscontext,theCompanypledgedthe sharesofBefesaMedioAmbiente,S.L.U. 22. Related party transactions Therewerenodirectorindirecttransactionswithmainshareholdersandmembersofitsadministrative,managementand supervisorybodiesthatwouldbematerialandnotconcludedundernormalmarketconditionsunlesspreviouslydisclosed. 23. Advances and loans granted to the members of the managing and supervisory bodies Therearenoadvances,loansorcommitmentsgivenontheirbehalfbywayofguaranteeofanykindgrantedtothemembers ofthemanagementandsupervisorybodiesduringthefinancialyear(2023:nil). 24. Subsequent events On19March2025,theCompanyrepriceditsTLB,reducingitsinterestrateby50bpstoEuribor+225bps,withafloorof0%. Thefacility’slong-termmaturitydateofJuly2029andallothercontractualtermsremainunchanged. 293Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information Rafael Pérez Chief Financial Officer Javier Molina Executive Chair Asier Zarraonandia Chief Executive Officer We, Javier Molina Montes, Asier Zarraonandia Ayo and Rafael Pérez Gómez, respectively Executive Chair, Chief Executive Officer and Chief Financial Officer, confirm, to the best of our knowledge, that: Responsibility statement y the2024statutoryannualaccounts ofBefesaS.A.presentedinthis AnnualReport,whichhavebeen preparedinaccordancewith Luxembourglegalandregulatory requirements,giveatrueand fairviewoftheassets,liabilities, financialpositionandprofitorloss ofBefesa,S.A.;and y themanagementreportonthe annualaccountsincludedinthis AnnualReport,whichhasbeen combinedwiththemanagement reportontheconsolidatedfinancial statementsincludedinthisAnnual Report,givesafairreviewofthe developmentandperformanceof thebusinessandthepositionof Befesa,S.A.,orBefesa,S.A.andits consolidatedsubsidiaries,takenas awhole,asapplicable,togetherwith adescriptionoftheprincipalrisks anduncertaintiesthattheyface. Luxembourg,29April2025 Statutory financial statements 294 Befesa Annual Report 2024 Independent auditor’s report KPMG Audit S.à r.l. Tel: +352 22 51 51 1 39, Avenue Joh n F. Kennedy Fax: +352 22 51 71 L-1855 Luxembourg E-mail: info@kpmg.lu Internet: www.kpmg.lu ©2025 KPMG Audit S.à r.l., a Luxembourg entity and a member firm of the KPMG global organization of independent member firms affiliated with KPMG Internat ional Limited, a private English company limited by guarantee. All rights reserved. R.C.S Luxembourg B 149133 To the Shareholders of Befesa S.A. 68 -70, Boulevard de la Pétrusse L -2320 Luxembourg Luxembourg REPORT OF THE REVISEUR D’ENTREPRISES AGREE Report on the audit of the annual accounts Opinion We have audited the annual accounts of Befesa S.A. (the "Company"), which comprise the balance sheet as at 31 December 2024, and the profit and loss account for the year then ended, and notes to the annual accounts, including a summary of significant accounting policies. In our opinion, the accompanying annual accounts give a true and fair view of the financial position of the Company as at 31 December 2024, and of the results of its operations for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts. Basis for opinion We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (the “Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier (the “CSSF”). Our responsibilities under the EU Regulation N° 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the « Responsibilities of “réviseur d'entreprises agréé” for the audit of the annual accounts » section of our report. We are also independent of the Company in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the annual accounts, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the annual accounts of the current period. These matters were addressed in the context of the audit of the annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that there are no key audit matters to communicate in our report. 295Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information Other information The Board of Directors is responsible for the other information. The other information comprises the information stated in the annual report including the management report and the Corporate Governance Statement but does not include the annual accounts and our report of the “réviseur d'entreprises agréé” thereon. Our opinion on the annual accounts does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the annual accounts, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the annual accounts or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and Those Charged with Governance for the annual accounts The Board of Directors is responsible for the preparation and fair presentation of the annual accounts in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the annual accounts, and for such internal control as the Board of Directors determines is necessary to enable the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. The Board of Directors is responsible for presenting the annual accounts in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format (“ESEF Regulation”). In preparing the annual accounts, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Responsibilities of the “réviseur d’entreprises agréé” for the audit of the annual accounts The objectives of our audit are to obtain reasonable assurance about whether the annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual accounts. Our responsibility is to assess whether the annual accounts have been prepared in all material respects with the requirements laid down in the ESEF Regulation. Independent auditor’s report continued 296 Befesa Annual Report 2024 As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: — Identify and assess the risks of material misstatement of the annual accounts, whether due to fraud or error, 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 procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. — Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. — Conclude on the appropriateness of the Board of Directors’ 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 ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of the “réviseur d’entreprises agréé” to the related disclosures in the annual accounts 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 report of the “réviseur d’entreprises agréé”. However, future events or conditions may cause the Company to cease to continue as a going concern. — Evaluate the overall presentation, structure and content of the annual accounts, including the disclosures, and whether the annual accounts represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, 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 those charged with governance with a statement 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, actions taken to eliminate threats or safeguards applied. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the annual accounts of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter. Report on other legal and regulatory requirements We have been appointed as “réviseur d’entreprises agréé” by the the Shareholders on 20 June 2024 and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 6 years. The management report is consistent with the annual accounts and has been prepared in accordance with applicable legal requirements. We confirm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014 were not provided and that we remained independent of the Company in conducting the audit. 297Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information We have checked the compliance of the annual accounts of the Company as at 31 December 2024 with relevant statutory requirements set out in the ESEF Regulation that are applicable to annual accounts. For the Company it relates to: — annual accounts prepared in a valid xHTML format; In our opinion, the annual accounts of Befesa S.A. as at 31 December 2024, identified as 222100VXGA8L6J4ZWG61-2024-12-31-0-en.zip, have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation. Our audit report only refers to the annual accounts of Befesa S.A. as at 31 December 2024, identified as 222100VXGA8L6J4ZWG61-2024-12-31-0-en.zip, prepared and presented in accordance with the requirements laid down in the ESEF Regulation, which is the only authoritative version Luxembourg, 29 April 2025 KPMG Audit S.à r.l. Cabinet de révision agréé Stephan Lego-Deiber Independent auditor’s report continued 298 Befesa Annual Report 2024 299Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 07 Additional information 302 Glossary 303 Financialcalendar 304 Disclaimer 300 Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information 301Befesa Annual Report 2024 Glossary Name Description Aluminium alloy Amixtureoftwoormoreelementsinwhichaluminiumisthepredominantmetal Aluminium concentrate SecondaryaluminiumresiduegeneratedduringtherecyclingprocessofsaltslagsandSPL,whichcanbe eitherlandfilledorsoldtovariousindustriesasaninputmaterialforfurtherproductioncycles Aluminium scrap Materialfromvariousgoodsthathavereachedthecompletionoftheirusefullives,whichmainlycontain aluminiumandcanberecycled Blast oxygen furnace (BOF) Atypeofmetallurgicalfurnacethatusesironoreasitsbaserawmaterialtoproducesteel Coke Aninputmaterialusedintheprocessestorecyclesteelresidues Electric arc furnace (EAF) Afurnaceusedbymini-millstomeltscrapsteel,usingelectricarctechnology EAF steel dust Hazardouswasteresultingfromtheproductionofcrudesteelbymini-mills Galvanised steel Steelwithaprotectivecoatingcontainingzinc,whichprotectsagainstcorrosion Leaching AhydrometallurgicalprocessthatincreasesthezinccontentofWaelzoxide(WOX)byremovingimpurities likefluoridesandchlorines Lime Aninputmaterialusedinthesteeldustrecyclingprocess Mini-mill Asteelproductionfacilityfortheproductionofsteel;thisisdonebymeltingrecycledscrapsteelinEAF,as opposedtodirectlyfromironore(whichistheprimaryironresourceusedintraditionalBOFsteelfactories) Rotary furnace Atube-shapedfurnacethatrotatesaroundacentralaxisasmaterialsarebeingtreated Salt slags Ahazardouswastegeneratedbytheproductionofsecondaryaluminium Scrap steel Recycledsteelthatservesasaninputmaterialforsteelmanufacturers,usingmini-millfacilities Special high-grade (SHG) zinc High-purityzincingotsproducedsolelyfromrecycledsources(WOX)usinganelectrowinningand solventextraction Spent pot linings (SPL) Spentpotliningsofaluminiumelectrolysiscellsarehazardouswastematerialsgeneratedintheproduction processofprimaryaluminium Stainless steel residue Ahazardousresidueresultingfromthestainlesssteelproducedfromscrapstainlesssteel Steel residue EAFsteeldustandstainlesssteelresidue Tolling fee IntheSteelDustsegment,thisreferstothefeechargedtostainlesssteelmanufacturerstocollectand treatstainlesssteelresidue,returningtothemmetals(mainlynickel,chromiumandmolybdenum) recoveredintheprocess.IntheSecondaryAluminiumsubsegmentofAluminiumSaltSlagsRecycling Services,itreferstotheservicefeechargedforcollectingandtreatingaluminiumresiduesandreturning therecoveredaluminiumtocustomers Valorisation Therecoveryofvaluablematerialsfromwaste Waelz kiln Akilnusedforprocessingcrudesteeldustbymixingcrudesteeldust,cokeandlimeinakilncontaininga rotatingfurnace,whichprimarilyvaporisesthezincandleadcomponentscontainedinthecrudesteeldust, producingWaelzoxide(WOX) Waelz oxide (WOX) Aproductwithahighconcentrationofzincthatisgeneratedinthecrudesteeldustrecyclingprocessand whichisusedintheproductionofzinc Zinc smelter Atypeofindustrialplantorestablishmentthatengagesinzincsmelting,i.e.theconversionofzincore concentratesandWOXintozincmetal 302 Befesa Annual Report 2024 Financial calendar Q1 2025 Statement & Conference Call Wednesday,30April2025 Annual General Meeting Thursday,19June2024 H1 2025 Interim Report & Conference Call Wednesday,30July2025 Q3 2025 Statement & Conference Call Thursday,30October2025 Note:Befesacannotruleoutchangestodatesandrecommends checkingthemintheInvestorrelations/Investor’sagendasection ofBefesa’swebsite(www.befesa.com). IR CONTACT Phone+49(0)210210010 Emailirbefesa@befesa.com 303Befesa Annual Report 2024 01 Befesa at a glance 02 To Befesa’s shareholders 03 Management report 04 Sustainability 05 Consolidated financial statements 06 Statutory financial statements 07 Additional information Disclaimer Thisreportcontainsforward-lookingstatementsandinformationrelatingtoBefesaanditsaffiliatesthatarebasedonthe beliefsofitsmanagement,includingtheassumptions,opinionsandviewsofBefesaanditsaffiliatesaswellasinformation citedfromthird-partysources.SuchstatementsreflectthecurrentviewsofBefesaanditsaffiliatesorofsuchthirdparties withrespecttofutureeventsandaresubjecttorisks,uncertaintiesandassumptions. Manyfactorscouldcausetheactualresults,performanceorachievementsofBefesaanditsaffiliatestobematerially differentfromanyfutureresults,performanceorachievementsthatmaybeexpressedorimpliedbysuchforward-looking statements,including,amongothers,changesingeneraleconomic,political,governmentalandbusinessconditions globallyandinthecountriesinwhichBefesaanditsaffiliatesdobusiness;changesininterestrates;changesininflation rates;changesinprices;changestonationalandinternationallawsandpoliciesthatsupportindustrialwasterecycling;legal challengestoregulations,subsidiesandincentivesthatsupportindustrialwasterecycling;extensivegovernmental regulationinanumberofdifferentjurisdictions,includingstringentenvironmentalregulation;managementofexposureto credit,interestrate,exchangerateandcommoditypricerisks;acquisitionsorinvestmentsinjointventureswiththirdparties; theinabilitytoobtainnewsitesandexpandexistingones;thefailuretomaintainsafeworkenvironments;theeffectsof catastrophes,naturaldisasters,adverseweatherconditions,unexpectedgeologicalorotherphysicalconditions,orcriminal orterroristactsatoneormoreofBefesa’splants;insufficientinsurancecoverageandincreasesininsurancecost;theloss ofseniormanagementandkeypersonnel;theunauthoriseduseofBefesa’sintellectualpropertyandclaimsofinfringement byBefesaofothers’intellectualproperty;Befesa’sabilitytogeneratecashtoserviceitsindebtednesschangesinbusiness strategy;andvariousotherfactors. Shouldoneormoreoftheserisksoruncertaintiesmaterialise,orshouldunderlyingassumptionsproveincorrect,actual resultsmayvarymateriallyfromthosedescribedhereinasanticipated,believed,estimated,expectedortargeted. Befesaanditsaffiliatesdonotassumeanyguaranteethattheassumptionsunderlyingforward-lookingstatementsarefree oferrors,nordotheyacceptanyresponsibilityforthefutureaccuracyoftheopinionsexpressedhereinortheactual occurrenceoftheforecasteddevelopments.Norepresentation(expressorimplied)ismadeasto,andnorelianceshouldbe placedon,anyinformation,includingprojections,estimates,targetsandopinions,containedherein,andnoliability whatsoeverisacceptedastoanyerrors,omissionsormisstatementscontainedhereinorotherwiseresulting,directlyor indirectly,fromtheuseofthisdocument.Befesaanditssubsidiariesdonotintend,anddonotassumeanyobligations,to updatetheseforward-lookingstatements. Thisreportmaynotatanytimebereproduced,distributedorpublished(inwholeorinpart)withoutthepriorwrittenconsent of Befesa. Published:30April2025 304 Befesa Annual Report 2024 Befesa, S.A. 68-70,BoulevarddelaPétrusse, L-2320,Luxembourg,GrandDuchyofLuxembourg www.befesa.com