Steico SE

Interim / Quarterly Report • Jul 26, 2024

STEICO SOCIETAS EUROPAEA

The Green Share

Half-Year Report 2024

Positive half-year performance with a cautious outlook

Natural building products
for healthier living

Overview

6M 2024 - positive half-year performance with a cautious outlook

At $€ 190.8$ million, sales in H1 2024 were almost at the previous year's level, continuing the stabilisation trend.

Earnings increased significantly in the 6-month period. EBITDA grew by $52.6 \%$ to $€ 45.9$ million. EBIT doubled to $€ 32.0$ million. This development is strongly supported by earnings from currency hedging of $€ 19.8$ million (PY € 4.3 million) recognised under German GAAP.

According to the Management Board, these gains will not be generated to a comparable extent in the second half of 2024 or repeated in 2025.

6M 2024 Revenue growth in € millions

Company profile

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

STEICO is positioned as a system provider for ecological residential construction and is the only manufacturer in the industry to offer an integrated wooden construction system in which innovative wooden construction components and ecological insulation material supplement each other. Laminated veneer lumber and t-joists form the structural components of the system. The insulation materials include flexible and stable wood fibre insulation panels, facade insulation materials, as well as cavity wall insulation made of wood fibres and cellulose.

At the same time, additional expenses are to be expected from the second half of 2024 as the new plant in Gromadka, Poland, comes on line.

Provided there are no negative effects from further economic and competitive developments, the Management Board continues to expect sales at the previous year's level of around $€ 365$ million for 2024 as a whole. Due to the aforementioned effects, the Management Board nevertheless expects a comparatively high EBIT between $€ 45$ million and $€ 50$ million for 2024.

6M 2024 EBIT growth in € millions

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

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

Disclaimer

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

A. SHARE PRICE GROWTH IN 2024

STEICO shares started the trading year on January 2 with a closing price of $€ 33.95$ on Xetra. In the weeks that followed, the share price fell slightly and reached its half-year low of $€ 24.70$ on March 13. Following the publication of the first quarter report, the share price rose significantly and reached its half-year high of $€ 38.85$ on May 9, 2024. On June 28, STEICO shares closed at $€ 29.60$ in Xetra trading. This corresponds to a loss in value of $12.8 \%$ in the first half of the year.

STEICO's shares: Share price growth 6M 2024

B. INVESTOR RELATIONS

As was the case in previous years, STEICO SE engaged in open and direct communication with the capital markets in 2024, and was also in close contact with its shareholders. In 2024, in addition to the transparency policies for the Basic Board and m:access, STEICO SE fulfilled its publication requirements, for example with end-to-end communication in German and English and the regular publication of quarterly reports. In addition, up-to-date press releases and financial reports are also always published on the website www.STEICO.com/ir. Information on key events is disseminated via a well-known institution to comply with publicity obligations.

C. CAPITAL MARKETS DIARY 2024

16 January 2024	STEICO presented the company at ODOO BHF Forum (virtual)
7 February 2024	STEICO presented the company at Montega Hamburger Investorentage (Hamburg)
19 February 2024	Release of preliminary figures for financial year 2023 and outlook for 2024
19 April 2024	Release of Q1 Report 2024
22 April 2024	STEICO presented the company at Metzler Small Cap Days (Frankfurt)
24 April 2024	STEICO presented the company at a digital Hauck Aufhäuser roadshow
2 May 2024	Release of Annual Report 2023
21 June 2024	STEICO SE's Annual General Meeting 2024
18 July 2024	Publication of the STEICO Half-Year Report
23-25 September 2024	STEICO presents the company at Berenberg and Goldman Sachs German Corporate Conference (Munich)
October 2024	Planned release of Q3 Report 2024
10 October 2024	STEICO presents the company at m:access Fachkonferenz Technologie Munich (hybrid)
19-20 November 2024	STEICO presents the company at CIC Forum by Market Solutions (Paris)

A. FUNDAMENTALS

I. THE STEICO GROUP'S BUSINESS MODEL

1. OVERVIEW

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

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

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

2. THE STEICO GROUP'S PRODUCTS AND SERVICES

The STEICO Group is a system provider for natural construction products for insulation and construction. The core product range comprises "natural wood fibre insulation materials".

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

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

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

Air-injected insulation

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

Construction products: Laminated veneer lumber (Laminated Veneer Lumber)

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

Construction products: I-joists

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

Special products

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

Timber wholesale

The timber trading activities were discontinued at the end of 2023 for reasons of insignificance.

Hardboards (Natural Fibre Boards)

The production of natural fibre boards is similar to the production of wood fibre insulation materials made using the wet method. The difference is that wet fibres are pressed to form stable boards using particularly high pressure. Natural fibre boards are used in the furniture industry where they are used, for example, to form the backs of cupboards or the bottoms of drawers. In addition, they are used as standard construction boards on many markets, for example for roof boards. Within the STEICO Group, natural fibre boards are a key component in the production of I-joists, where they form the so-called web. Sales to external customers is no longer of any strategic importance due to the low margins.

Miscellaneous

The Miscellaneous segment bundles various peripheral activities, such as ETICS accessories, vapour barriers and other accessories such as tools for processing insulation material.

Prefabricated building element production

In element construction, individual STEICO products (construction materials and insulating materials) to form complete building components such as roof, wall and ceiling elements according to customer specifications. These elements allow work on the construction site to progress particularly rapidly.

Automation and the pre-production of end-to-end construction components are continuing trends in the construction industry. Prefabrication / element production has been practised by STEICO SE's customers for a long time, but is often labour- intensive manual work. STEICO's prefabrication is based on a high degree of automation, which is associated with increases in speed and precision. The offering is geared to timber construction and prefabricated house companies, which can thus achieve advantages in terms of personnel deployment, economic efficiency and construction speed. The STEICO Group does not itself act as a construction company.

Services

STEICO offers a range of supplementary services, such as its "STEICO Academy" seminars. These seminars train craftsmen, architects, trade representatives and also people building there own home in how to use the STEICO construction system. In addition STEICO has its own department for
technical advice for craftsmen, planners and builders. As a rule services are preformed free of charge.

3. PROCUREMENT

The fresh wood require to produce wood fibre products is mostly procured in Poland from the Polish State Forest. In France wood is procured on the free wood market. The timber is sourced from sustainably managed forests from the region surrounding the production facilities.

4. SALES AND CUSTOMERS

The STEICO Group's customers are mostly broken down into the customer groups of wood and construction materials traders, wood construction companies, re-fabricated home construction companies, DIY stores (in some cases via distributors) as well as industrial customers (e.g. manufacturers of laminated/parquet flooring, furniture manufacturers, construction material manufacturers). The STEICO Group aims to ensure a broad customer base in order to avoid dependencies on individual customers

II. CONTROL SYSTEM AND SHAREHOLDER STRUCTURE

STEICO SE is responsible for sales management, marketing, investments, product development, finance and financial control in its position as the group's holding company. As a central Group company, STEICO SE is thus integrated into an intensive reporting system that supports the early recognition of possible undesirable developments.

A detailed control system with reporting as well as strategy and planning processes that are uniform within the company is used to monitor and control the opportunities and risks of the operating business. A differentiated internal reporting system is in place to monitor economic developments and risks. The sales strategy is adapted to new developments.

On June 21, 2024, the STEICO Annual General Meeting elected Mr. Paul O'Gorman and Mrs. Aiveen Kearney to the STEICO Administrative Board. The STEICO Administrative Board subsequently elected Mr. Paul O'Gorman as its Chairman. Mr. Udo Schramek left the company as CEO on June 30, 2024, but retains his seat on the Administrative Board. Mrs. Aiveen Kearney took over the position of CEO on July 01, 2024.

To the knowledge of STEICO's management, $51.0 \%$ of the shares are held by Kingspan Holding GmbH at the time of publication of the report. $10.1 \%$ of the shares are held by Schramek GmbH and can therefore be attributed to the Deputy Chairman of the Aministrative Board, Mr. Udo Schramek. The remaining shares are in free float.

III. RESEARCH AND DEVELOPMENT

R\&D activities in H1 2024 focused on optimising product characteristics for wood fibre insulation boards as well as developing new products as part of the product range, in particular:

• Supporting research work in parallel to operating the Group's own production line for laminated veneer lumber
• Further development of cellulose air-injected insulation and combined air-injected insulation
• Research to optimize the heat conduction properties for STEICO's insulation materials
• Research on developing and optimising material combinations for STEICO's insulation materials
• Research to optimise the emission behaviour for wood fibre insulation materials and wooden materials
• Development of foaming insulation materials based on wood and sustainable raw materials
• Development of moulded pieces based on reformable wood fibre mats
• Development of cyclical, fully recyclable insulation materials based on wood fibres
• Further development of the STEICO composite thermal insulation systems

Future R\&D work will continue to focus on building the integrated construction system, a combination of wooden frame products and bio-based insulation materials. In addition, further material optimisations are planned, in order to make STEICO's products even more efficient.

B. ECONOMIC REPORT

I. OVERALL ECONOMIC AND INDUSTRY-SPECIFIC UNDERLYING CONDITIONS

1. OVERALL ECONOMIC AND INDUSTRY DEVELOPMENT

The European construction industry remains in a weak phase. Current data from Eurostat are available for April 2024 and show a year-on-year decline in production in the construction industry of $1.1 \%$ in the eurozone and $0.9 \%$ in the EU.

In Germany, the most important sales market for STEICO products, the construction industry is also still in an economic slump. Current data from Destatis shows a 43.5\% year-onyear decline in building permits as a key early indicator from January to April 2024.

Group management report for the first half of 2024

STEICO SE, Feldkirchen

2. COMPETITION

With regard to wood fibre insulation materials, in H1 2024 the most important competitors in the opinion of the company's management were Gutex (Germany), Soprema with its Pavatex brand (France), bestwood Schneider (Germany), the Ziegler Group with its Naturheld brand (Germany; Hunton (Norway) and Fibris (Poland).

STEICO SE's management believes that the most important competitors for I-joists in H1 2024 were Metsä (Finland), Masonite (Sweden) and James Jones (United Kingdom).

The most important competitors for laminated veneer lumber in H1 2024were, in the opinion of the company's management, Metsä (Finland), Stora Enso (Finland), Pollmeier (Germany). As a result of sanctions for Russian companies, the company MLT/Taleon Terra (Russia) is no longer being regarded as a relevant competitor on this market for the time being.

II. COURSE OF BUSINESS

1. SIGNIFICANT EVENTS IN THE PERIOD UP TO THE PUBLICATION OF THE HALF-YEAR REPORT

Election of Mr. Paul O'Gorman and Mrs. Aiveen Kearney to the STEICO Administrative Board

On June 21, 2024, the STEICO Annual General Meeting elected Mr. Paul O'Gorman and Mrs .Aiveen Kearney to the STEICO Administrative Board. The STEICO Administrative Board subsequently elected Mr. Paul O'Gorman as its Chairman.

Resignation of Mr. Udo Schramek from the Executive Board

On June 30, 2024, Mr. Udo Schramek stepped down from the Executive Board of STEICO SE as CEO due to retirement. Mr. Schramek will retain his seat on the STEICO Administrative Board. As the founder and long-standing leader of the STEICO Group, Mr. Schramek has made a significant contribution to the successful development of the company. The Administrative Board, the Executive Board and the entire STEICO workforce would like to thank Mr. Schramek for his great commitment and wish him all the best for the future.

Appointment of Mrs. Aiveen Kearney as CEO

Mrs. Aiveen Kearney joined the management board of STEICO SE on 1 May 2024. Mrs. Aiveen Kearney was appointed CEO of STEICO SE on 1 July 2024.

2. INVESTMENT PROJECTS

Production site Gromadka

The new Gromadka production site is now in the commissioning phase. Production is to be expanded in stages.

3. BUSINESS DEVELOPMENT

The demand situation has stabilised despite the weak economic environment in the first half of 2024. The competitive situation nevertheless remains tense. Due to the recently created new production capacities at STEICO and at competitors, the market for wood fibre insulation materials is currently characterised by overcapacity.

Construction products (I-joists and laminated veneer lumber) continue to show stable development.

III. FINANCIAL POSITION, NET ASSETS AND RESULT OF OPERATIONS

1. RESULTS OF OPERATIONS

At $€ 190.8$ million, sales in the first half of the year were almost at the previous year's level (previous year: $€ 190.0$ million)

The cost of materials fell to $€ 92.8$ million in the first half of the year (previous year: $€ 118.1$ million) mainly due to gains from currency hedging totalling $€ 19.8$ million (previous year: $€ 4.3$ million). As a result the cost of materials ratio fell to $49.2 \%$ (previous year: $62.7 \%$ ).

Personnel expenses rose to $€ 34.0$ million in the first half of the year (previous year: $€ 31.9$ million). The personnel expense ratio totalled 18.0\% (previous year: 16.9\%). The increase is mainly due to inflation-related increases in personnel costs, although the rise was curbed by the implementation of a cost-cutting programme.

Depreciation and amortisation amounted to $€ 13.9$ million in the first half of the year (previous year: $€ 14.1$ million). The commissioning of the Gromadka production site did not yet have a significant impact in the first half of the year, but will lead to an increase in depreciation and amortisation in the future.

Other operating expenses totalled $€ 21.3$ million in the first half of the year (previous year: $€ 20.8$ million). The ratio was $11.3 \%$ (previous year $11.0 \%$ ).

2. FINANCIAL POSITION AND NET ASSETS

At around $€ 619.4$ million as at 30 June 2024, total assets increased once again compared to $€ 587.7$ million as at 31 December 2023. Property, plant and equipment increased to $€ 450.8$ million (31 December 2023: $€ 444.6$ million), which is partly due to ongoing investments in capacity expansions and increasing production efficiency.

The inventories item corresponds to the normal course of business and amounted to $€ 57.3$ million as at 30 June 2024 (31 December 2023: $€ 59.5$ million).

Receivables and other assets increased significantly and amounted to $€ 69.6$ million as at 30 June 2024 (31 December 2023: $€ 46.0$ million). The increase is due in particular to the seasonally high order volume.

Cash on hand and bank balances amounted to $€ 33.5$ million as at 30 June 2024 (31 December 2023: $€ 33.0$ million).

On the liabilities side, equity increased to $€ 337.1$ million (31 December 2023: $€ 313.5$ million). The equity ratio is $54.4 \%$ (31 December 2023: 53.3\%).

Liabilities to banks fell to $€ 189.2$ million (31 December 2023: $€ 191.9$ million), which is attributable to the repayment of funds as part of the syndicated loan. Apart from the completion of the new production site in Gromadka, no major investment projects are currently being implemented.

In the opinion of the company management, the Group companies had sufficient free credit lines at standard market conditions as at 30 June 2024. In addition, a credit line was granted for forward exchange transactions and derivatives in order to be able to carry out necessary hedging transactions for the operating business.

In addition, provisions increased to $€ 32.8$ million as at 30 June 2024 (31 December 2024: $€ 24.6$ million).

3. LIQUIDITY

The STEICO Group has a stable operating business and has sufficient liquidity under the existing syndicated loan agreement to finance the investment projects that are currently underway and have already been decided.

Summary of the economic position

On the whole, in the opinion of the company's management, the STEICO Group has a future-oriented business model and solid financing, and in the opinion of the company's management it will continue its on-track growth over the long term.

IV. NON-FINANCIAL PERFORMANCE INDICATORS

The following non-financial performance indicators are collected and evaluated, but are not used to control the company in detail.

Environmental issues

As a company with an extensive product range of environmentally friendly products, the STEICO Group attaches great importance to having a low environmental impact and saving natural resources. The wood from which STEICO's products are made originates from sustainably managed forests, which are mostly certified according to the wellknown organisation PEFC (Programme for the Endorsement of Forest Certification Schemes).

The IBR seal means that STEICO's insulation materials have a recognised seal of quality for environmentally friendly, safe and functional construction products.

In addition, STEICO SE holds an environmental product declaration (EPD) for wood fibre insulation materials which offers additional proof of its dedication to sustainability.

STEICO is a member of the DGNB (Deutsche Gesellschaft für nachhaltiges Bauen (German society for sustainable construction)) and thus supports the development of sustainable construction solutions.

In addition an environmental management system according to ISO 14001:2015 has been introduced at the Polish production plants.

In addition, the STEICO Group has published an annual sustainability report since 2018, and since 2019 this has been based on the internationally recognised reporting standard GRI (Global Reporting Initiative). In 2022 and 2023 it was published in line with the GRI Core Standard.

Protecting the environment is one of the key basic pillars of STEICO's corporate philosophy. The STEICO Group uses its activities and awards to show that growth and sustainability can go hand in hand and thus reinforces its position as a provider of an environmentally friendly timber construction system. The STEICO Group thus aims to continue its relevant environmental certification and to expand on this.

C. OPPORTUNITY AND RISK REPORT, FORECAST

The statements in the opportunity and risk report as well as in the forecast include a certain degree of forecasting uncertainty by their very nature. Please refer to STEICO's 2023 annual report for a detailed presentation of opportunities and risks.

I. FORECAST

Provided there are no negative effects from further economic and competitive developments, the Management Board continues to expect sales at the previous year's level of around $€ 365$ million for 2024 as a whole. Due to the stabilisation in demand and the gains from currency hedging, the Management Board nevertheless expects a comparatively high EBIT between $€ 45$ million and $€ 50$ million for 2024.

Consolidated income statement for the first half of 2024
Consolidated financial statements STEICO SE, Feldkirchen
H1 2024
H1 2023

		€	€
1.	Revenues	190,758,736.80	190,026,674.29
2.	Increase in finished goods and work in progress	$-2,720,125.94$	$-1,855,487.61$
3.	Other own work capitalised	491,463.99	269,505.44
		188,530,074.85	188,440,692.12
4.	Other operating income	$5,580,215.15$	$12,412,097.48$
		194,110,290.00	200,852,789.60
5.	Cost of materials
	a) Cost of raw materials and supplies and for purchased goods	$-92,160,201.68$	$-117,649,694.55$
	b) Cost of purchased services	$-682,663.08$	$-421,920.32$
6.	Gross earnings	101,267,425.24	82,781,174.73
7.	Personnel expenses
	a) Wages and salaries	$-27,394,659.12$	$-25,562,871.88$
	b) Social security and expenses for retirement benefits	$-6,630,279.60$	$-6,306,458.65$
8.	Amortisation of intangible fixed assets and depreciation of tangible fixed assets	$-13,889,700.41$	$-14,072,309.00$
9.	Other operating expenses	$-21,307,221.28$	$-20,796,683.31$
10.	EBIT	32,045,564.83	16,042,851.89
11.	Other interest and similar income	$1,538,319.67$	241,488.81
12.	Interest and similar expenses	$-5,339,767.21$	$-2,683,972.70$
13.	Financial result	$-3,801,447.54$	$-2,442,483.89$
14.	Earnings before taxes (EBT)	28,244,117.29	13,600,368.00
15.	Income taxes	$-6,313,445.35$	$-2,848,811.22$
16.	Earnings after taxes	21,930,671.94	10,751,556.78
17.	Other taxes	$-2,099,643.54$	$-1,717,816.31$
18.	Consolidated net income	19,831,028.40	9,033,740.47
19.	Profit carried forward from previous year	187,806,563.93	170,926,348.70
20.	Consolidated profits	207,637,592.33	179,960,089.17

Consolidated balance sheet as of 30 June 2024 Consolidated financial statements STEICO SE, Feldkirchen

	30 June 2024	31 December 2023
	4	4
A. NON-CURRENT ASSETS
I. Intergibn assets
1. Acquired concessions, industrial property rights and similar rights and assets as well as licenses for such rights and assets.	205,777.81	296,088.10
	2,312,468.95	2,312,468.95
	2,518,246.76	2,578,557.05
II. Property, plant and equipment
1. Land, land rights and buildings including buildings on third-party land	118,830,522.52	116,092,578.25
2. Technical plant and machinery	152,771,264.68	151,743,267.43
3. Other assets, operating and office equipment	2,615,819.68	2,842,460.38
4. Advances made and assets under construction	176,578,541.18	173,961,509.27
	450,797,148.07	444,639,815.33
III. Financial assets
1. Investments in affiliated companies	0.00	0.00
2. Loans to affiliated companies	19,029.93	18,896.19
3. Other loans	8,500.00	8,000.00
	27,529.93	26,896.19
	453,342,924.76	447,245,268.57
0. CURRENT ASSETS
I. Inventories
1. Raw materials, consumables and supplies	32,773,914.44	31,695,144.31
2. Work in progress	2,322,370.15	2,999,803.03
3. Finished goods and merchandise	22,188,894.81	24,714,812.90
4. Advance payments made	24,553.29	125,863.98
	57,289,732.69	59,545,624.22
II. Receivables and other assets
1. Trade receivables	39,461,561.03	35,678,057.24
2. Receivables from affiliated companies	2,078.87	294.89
3. Other assets	30,145,952.20	20,272,120.69
	69,609,592.10	45,950,472.82
III. And current securities
Other securities	206,828.76	97,122.08
IV. Cash in hand and bank balances	33,549,950.53	33,011,841.14
	160,846,104.08	138,605,060.26
C. PREPAID EXPENSES	3,925,658.87	554,786.21
	1,269,748.71	1,261,225.05
	619,384,436.43	587,666,340.09

Consolidated balance sheet as of 30 June 2024 Consolidated financial statements STEICO SE, Feldkirchen

	30 June 2024	31 December 2023
	4	4
A. EQUITY
I. Subscribed capital	14,083,465.00	14,083,465.00
II. Additional paid-in capital	104,911,923.60	104,911,923.60
III. Retained earnings
Other retained earnings	7,050,000.00	7,050,000.00
IV. Difference in equity from currency translation	3,423,639.07	334,277.52
V. Consolidated profits	207,637,592.33	187,800,563.93
	337,106,620.00	313,517,675.01
B. EXTRAORDINARY ITEMS
Extraordinary item for emission rights issued free of charge	8,462,140.10	3,263,851.94
	9,452,140.10	3,263,851.94
C. PROVISIONS
1. Provisions for pensions and similar obligations	3,737,725.47	3,696,958.02
2. Provisions for taxes	3,184,156.74	0.00
3. Other provisions	25,913,001.64	20,946,543.65
	32,834,883.85	24,643,501.67
D. LIABILITIES
1. Liabilities to banks	189,214,530.14	191,943,102.14
2. Advance payments received on account of orders	237,935.52	319,989.11
3. Trade payables	27,557,743.46	31,884,083.10
4. Liabilities to affiliated companies	3,037,500.00	3,037,500.00
5. Other liabilities	18,463,465.77	17,558,999.88
	238,511,174.89	244,743,674.23
E. DEFERRED INCOME
	59,802.02	76,633.14
F. DEFERRED TAX LIABILITIES	1,419,815.56	1,421,004.10

Notes to the consolidate financial statements for the first half of 2023 Consolidated financial statements STEICO SE, Feldkirchen

I. GENERAL INFORMATION ON THE CONSOLIDATED FINANCIAL STATEMENTS

1. LEGAL FOUNDATIONS

The regulations set out in Sections 294 ff. of the Handelsgesetzbuch (HGB - German Commercial Code) apply for the consolidated financial statements. The consolidated financial statements are prepared based on legal requirements.

2. CONSOLIDATED ACCOUNTING AND VALUATION METHODS

The Group applies the principles of the German Commercial Code for its accounting and valuation methods. According to Section 308 (1) of the HGB, the assets and liabilities included on the consolidated balance sheet are subject to a uniform valuation in line with the valuation methods which apply for the parent company's annual financial statements.

The consolidated balance sheet and consolidated income statement are classified according to Sections 266, 275 (2) of the HGB in connection with Section 298 of the HGB.

The following individual accounting and valuation methods were applied

Internally generated intangible assets are capitalised at cost and subject to scheduled amortisation over their expected useful lives. Patents, concessions, licenses and software are written down over 2-5 years, rights of usufruct are written down over 20 years.

Property, plant and equipment is valued at cost according to Section 253 of the HGB in connection with Section 255 of the HGB, less scheduled depreciation in line with the standard useful lives in the industry.

Depreciation is mainly recognised on a straight-line basis. Some assets are depreciated using the declining balance method.

Low-value items of property, plant and equipment with acquisition costs of up to $€ 800$ have been written off immediately through profit and loss since 1 January 2011.

As a rule, financial assets are carried at cost or, in the event of permanent impairment, at their lower fair value on the balance sheet date.

If the reasons for maintaining a lower carrying amount no longer apply, these are written up according to Section 253 (5) sentence 1 of the HGB.

Inventories are generally measured at cost. Items with impaired marketability are written down to their lower fair value.

As a rule, receivables and other assets are carried at face value.

In order to cover the risk of default, individual and lump-sum write-downs are formed for receivables to the extent required. When forming individual write-downs, the company takes into account the fact that some receivables are covered by commercial credit insurance.

Securities under current assets are carried at acquisition cost or at their lower fair value.

Cash in hand and bank balances are carried at face value.
Expenses prior to the balance sheet date that relate to expenses for a limited period after the balance sheet date are carried as prepaid expenses. The accounting option offered in Section 250 (3) Sentence 1 of the HGB to form a discount has been used. The item is reversed using the straight-line method in line with time.

Deferred tax assets result from temporary differences between tax losses carried forwards and consolidation. The tax relief resulting at an individual company level has been capitalised according to the option offered in Section 274 in connection with Section 306 of the HGB.

Provisions for pensions are calculated on the balance sheet date in line with Section 253 (2) of the HGB using the projected unit credit method based on an average market interest rate and an assumed residual period of 15 years. This is calculated and announced by Deutsche Bundesbank in line with the corresponding legal provisions.

Provisions for taxes and all other provisions are formed for all recognizable risks and uncertain liabilities in the amount required for fulfilment according to prudent commercial judgement. The amount required for fulfilment is calculated taking future price and cost increases into account.

Provisions with a remaining term of more than one year are discounted over their remaining term in line with the average market interest rate for the past seven fiscal years (Section 253 (2) Sentence 1 of the HGB).

Liabilities are included at their repayment amounts.
Deferred tax liabilities result from temporary differences to the carrying amounts in the tax base for the companies included.

Notes to the consolidate financial statements for the first half of 2023 Consolidated financial statements STEICO SE, Feldkirchen

Currency translation

Receivables and liabilities denominated in foreign currencies are translated using an exchange rate close to the actual date or the exchange rate on the date of the transaction. Assets and liabilities denominated in foreign currencies with a residual period of less than one year are subsequently valued on the balance sheet date using the average spot exchange rate on the balance sheet date.

Foreign statements prepared in foreign currencies for the Group's subsidiaries in Poland and England are translated using the "modified balance sheet date method" set out in Section 308a of the HGB.

With the exception of equity, items on the balance sheet are translated using the rate on the balance sheet date; Items in the income statement are translated using the average exchange rate for the fiscal year; Equity was translated at historical rates.

The parent company's functional currency is the group's currency (Euros).

Differences in the consolidation of liabilities resulting from exchange rates are taken directly to equity under Currency translation differences.

The exchange rates for PLN/€ are:
Closing rate on 30 June 2024: 4.30900
Average rate in 2024: 4.30957

The exchange rates for GBP/€ are:
Closing rate on 30 June 2024: 0.84638
Average rate in 2024: 0.85347

3. ADMINISTRATIVE BOARD

STEICO's Administrative Board comprises four members.
Mr Paul O'Gorman, Blackrock (Ireland) Chairman of the Administrative Board

Mr Udo Schramek, München (Germany), Deputy Chairman of the Administrative Board

Mrs Aiveen Kearney, Rathbride (Ireland), CEO STEICO SE
Mrs Katarzyna Schramek, München (Germany), Attorney

4. EXECUTIVE BOARD

Mrs Aiveen Kearney, Rathbride (Ireland), CEO
Mr. Thorsten Leicht, Managing Director for Production
Mr. Roger Fränkel, Abensberg, Managing Director for Investments and Equipment Technology

Dr. David Meyer, Munich, Managing Director for Finance
Mr. Tobias Schindler, Sistrans (Austria), Managing Director for Sales

We love wood.

STEICO engineered by nature for renovation and new builds

The STEICO Group is the world market leader in the production and sale of bio-based wood fibre insulation materials and a leading supplier of innovative timber construction products. With the industry's largest product range of wood fibre insulation materials and a corresponding construction system for timber construction, STEICO occupies a unique position in the market. Almost the entire load-bearing and insulating shell of a building can be constructed with STEICO products.

STEICO

engineered by nature

Sustainable products -

sustainable production

The STEICO Group is committed to sustainable forestry - the wood used comes from forests certified according to the strict rules of the PEFC. All products have the necessary building authority approvals. In addition, independent product testing by the IBR (Institute for Building Biology Rosenheim) guarantees the high quality of the products. The STEICO Group also sets standards in environmentally friendly production and uses, for example, $\mathrm{CO}_{2}$-neutral biomass as an energy source.

STEICO SE, Otto-Lilienthal-Ring 30, 85622 Feldkirchen (GER) Phone +49 89991551-0, Fax +49 89991551-700 www.steico.com, E-mail: info@steico.com