Azelis Group NV — Share Issue/Capital Change 2023

May 22, 2023

AZELIS GROUP NV 12 Posthofbrug, box 6, 2600 Antwerp (Berchem), Belgium Enterprise number 0769.555.240 RLE Antwerp – Antwerp division

(the "Company")

SPECIAL REPORT OF THE BOARD OF DIRECTORS IN ACCORDANCE WITH ARTICLE 7:198 JUNCTO ARTICLES 7:179 §1 AND 7:191 OF THE CODE ON COMPANIES AND ASSOCIATIONS ("CCA") REGARDING A CAPITAL INCREASE THROUGH CONTRIBUTION IN CASH WITHIN THE AUTHORISED CAPITAL WITH CANCELLATION OF THE STATUTORY PRE-EMPTION RIGHT

The board of directors of the Company (the "Board of Directors") hereby submits, in accordance with article 7:198 juncto articles 7:179 §1 and 7:191 CCA, its report regarding the intended capital increase through contribution in cash, as described in this report and within the authorised capital, for a maximum amount of two hundred million euros (EUR 200,000,000.00) with cancellation of the statutory preemption right of the existing shareholders (the "Capital Increase" or the "Transaction").

In this report, the Board of Directors describes amongst others (i) the reasons for the cancellation of the pre-emption right, in accordance with article 7:191 of the CCA, (ii) the consequences of the Capital Increase for the economic and membership rights of the shareholders, in accordance with articles 7:179 §1 and 7:191 of the CCA, and (iii) why the Transaction and the issue price are justified in the Company's interest, in particular in view of the financial situation of the Company in accordance with Article 7:179 §1 of the CCA.

Beforehand, it is noted and clearly stated that the Capital Increase will take place in the context of:

• i. an exempted private placing of the new shares by means of an accelerated private placement with compilation of an order book ("accelerated bookbuilding") ("ABB"),
  • A. outside the United States of America, pursuant to Regulation S under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), in:
    • 1. the European Economic Area (EEA), to "qualified investors" (as defined in article 2(e) of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market and repealing Directive 2003/71/EC, as amended (the "Prospectus Regulation")), in accordance with the prospectus exemption provided for in Sections 1.4(a) and 1.5(a) of the Prospectus Regulation;
    • 1. the United Kingdom, to "qualified investors" as defined in article 2(e) of the Prospectus Regulation as amended and transposed into United Kingdom law under the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal Agreement) Act 2020 (the "UK Prospectus Regulation")) who are also (x) persons with professional experience in matters relating to investments falling within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (y) "high net worth companies, unincorporated associations, etc." within the meaning of section 49(2) (a) to (d)

of the Order, or (z) are persons to whom an offer of new shares may otherwise be lawfully communicated and who may lawfully participate in the Placing;

• 1. Switzerland, to investors who qualify as "professional clients" in accordance with Article 4 para. 3 of the Swiss Financial Services Act ("Finanzdienstleistungsgesetz") of 15 June 2018, as amended;
• 1. Canada, to investors qualifying as (i) "accredited investors" (as defined in "National Instrument 45-106 Prospectus Exemptions" or subsection 73.3(1) of the "Securities Act (Ontario)") and (ii) "permitted clients" (as defined in "National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations"); and
• B. in the United States of America only to a limited number of persons reasonably believed to be "qualified institutional buyers" (each, a "QIB"), as defined in and in reliance on Rule 144A under the US Securities Act ("Rule 144A") who have been provided with a QIB investor representation letter, within the meaning of, and pursuant to, Rule 144A or another available exemption from, or a transaction not subject to, registration under the US Securities Act; and
• ii. whereby the admission to trading on the regulated market of Euronext Brussels of the new shares issued in this context will be requested (the "Placing").

The exempted accelerated private placement or ABB and the Placing in the context of the Capital Increase will be conducted by Goldman Sachs International ("GS") and J.P. Morgan SE ("JPM") (collectively, the "Managers").

In this report, the Board of Directors also describes the modalities of the Placing, including its structure, and justifies those modalities along with the justification of the contemplated issue price in accordance with article 7:179 §1 CCA, as well as the justification of the proposal to cancel the statutory pre-emption right of existing shareholders in the framework of the Capital Increase, in accordance with article 7:191 of the CCA.

This report of the Board of Directors is to be read in conjunction with the report drawn up in accordance with articles 7:179 §1 and 7:191 of the CCA by the statutory auditor of the Company, PwC Bedrijfsrevisoren BV / Reviseurs d'Entreprises SRL, with registered office at Woluwedal 18, 1932 Zaventem, RLE Brussels (Dutch-speaking) 0429.501.944, represented in this auditing function by Peter Van den Eynde, in which the latter assesses whether the financial and accounting information contained in this report of the Board of Directors is true in all material respects and sufficient for the consideration of the directors of the Company who will decide on the Capital Increase, within the framework of the exercise of the existing power of the Board of Directors regarding the authorised capital, and ultimately the shareholders of the Company.

1 AUTHORISED CAPITAL

1.1 STATUTORY BASIS FOR THE DECISION OF THE BOARD OF DIRECTORS

For this Transaction, the Board of Directors wishes to make use of its existing statutory authorisations with regard to the authorised capital, as provided for in article 9 of the articles of association of the Company.

The text of said article 9 of the articles of association of the Company is, as far as necessary, included below in full:

" §1. The board of directors is authorized to increase the share capital of the company in one or several times by a (cumulated) amount of maximum five billion six hundred seventy-nine million nine hundred ninety-nine thousand nine hundred and seventy-eight euro (€ 5,679,999,978.00).

The board of directors can exercise this power for a period of five (5) years as from the date of publication of the amendment to the articles of association dated 10 September 2021 (when the conditions precedent laid down therein have been fulfilled and the resolutions adopted have effectively entered into force). This authorization of the board of directors may be renewed in accordance with the applicable legal provisions.

§2. Any capital increases decided pursuant to this authorization will take place in accordance with the modalities to be determined by the board of directors; they may be effected (i) by means of a contribution in cash or in kind, (ii) through conversion of available or unavailable reserves and of issuance premiums, with or without issuance of new shares, with or without preferred rights, with or without voting rights. The board of directors can also use this authorization for the issuance of convertible bonds, subscription rights or bonds to which subscription rights or other tangible values are connected, or other securities.

When exercising its authorization within the framework of the authorized capital, the board of directors can limit or cancel the preferential subscription right of the shareholders in the interest of the company, subject to the legal limitations and conditions. This limitation or cancellation can also occur to the benefit of the employees of the company or of its subsidiaries or to the benefit of one or more specific persons whether or not these are employees of the company or its subsidiaries.

§3. The board of directors is hereby expressly empowered to proceed with a capital increase in any and all form, including but not limited to a capital increase accompanied by the restriction or withdrawal of the preferential subscription right, even after receipt by the company of a notification by the Financial Services and Markets Authority (FSMA – Autoriteit voor Financiële Diensten en Markten) of a takeover bid for the company's shares. In this case, however, the capital increase will have to comply with the additional terms and conditions set out in article 7:202 of the Belgian Code on Companies and Associations. The powers conferred in this third paragraph remain in effect for a period of three (3) years from 21 September 2021, being the date on which the resolutions of the extraordinary general meeting adopted in the deed amending the articles of association dated 10 September 2021, have effectively entered into force following the fulfilment of the conditions precedent laid down therein. These powers may be renewed for a new period of three (3) years in accordance with the applicable legal rules. When the board of directors decides upon a capital increase in the framework of the authorized capital with application of the authorization in this third paragraph, this will constitute a special application of the authorization in the first paragraph of which the amount (or the remaining part of it) will be reduced by the amount used.

§4. The board of directors is authorized, with power of substitution, to amend the articles of association after each capital increase realized within the framework of the authorized capital and to bring them in line with the new share capital and the situation of the shares."

This power was granted to the Board of Directors by decision of the extraordinary general meeting of shareholders dated 10 September 2021, published in the Annexes to the Belgian Official Gazette on 30 September 2021, for a period of five years as of the publication of the aforementioned decision (i.e., until 29 September 2026).

For the purpose of the realisation of the Capital Increase, the Board of Directors more specifically wishes to use its powers regarding the authorised capital and its power to cancel the statutory pre-emption right of the existing shareholders.

The technique of the authorised capital, combined with the predetermined structure of the Placing as set out below and considering the complex organisational constraints for the execution of this type of transaction in the financial markets, in particular for listed companies, shall enable a certain degree of flexibility, leniency, confidentiality, efficiency, cost reduction and/or speed of execution of the Transaction.

1.2 AVAILABLE AMOUNT BELOW THE AUTHORISED CAPITAL

The Board of Directors has as of today not yet made use of its statutory authorisation to increase the capital of the Company. As a result, the full amount of EUR 5,679,999,978.00 as foreseen in article 9 of the articles of association is currently still available under the global authorised capital.

The contemplated Capital Increase through contribution in cash of up to two hundred million euros (EUR 200,000,000.00) with the intention that this amount, assuming full underwriting at an issue price of the New Shares below the fractional value of the existing shares, is booked in its entirety as a capital contribution under the post "capital", therefore certainly fits within the existing statutory powers regarding authorised capital.

2 TERMS OF THE PLACING

2.1 STRUCTURE OF THE PLACING

The maximum amount of the Capital Increase is set at two hundred million euros (EUR 200,000,000.00). The minimum amount of the issue price for the issued new shares in the context of the Capital Increase (the "New Shares") is determined at eighteen euros and fifty eurocents (EUR 18.50) per New Share to be issued as further set out below.

Assuming that the issuance of the New Shares effectively takes place at the determined minimum issue price of eighteen euros and fifty eurocents (EUR 18.50) per New Share to be issued, there will a total of ten million eight hundred and ten thousand eight hundred and ten (10,810,810) New Shares to be issued in the context of the Capital Increase further to the subscription of the determined maximum amount of two hundred million euro (EUR 200,000,000.00).

The Board of Directors points out that the ultimate realisation of the Capital Increase will depend on the receipt, size and quality of the requests for subscription of the New Shares to be issued (the "Subscription Requests") in the context of the Placing through the Managers.

No minimum amount is determined for the Placing such that the Board of Directors will at all times and for whichever reason be able to proceed with the Capital Increase for a lower amount.

This may be the case, for example, when the Subscription Requests for the New Shares that are received and deemed acceptable, taking into account (i) the final issue price, and/or (ii) other reasonable considerations (such as, inter alia, the size and quality of the Subscription Requests), are for an amount lower than the maximum amount of the Capital Increase determined by the Board of Directors; it is expressly provided that in such case, in accordance with article 7:181 of the CCA, the Board of Directors (or, as the case may be, the director(s) specially authorised thereto by the Board of Directors) shall have the right (but not the obligation) to implement the Capital Increase for the lower amount so placed.

Moreover, the Capital Increase can take place for a lower amount even if the Subscription Requests for the New Shares received and, taking into account the final issue price, deemed acceptable, relate to an amount equal to or greater than the maximum amount of the Capital Increase determined by the Board of Directors: it is expressly provided that in such case the Board of Directors (or, as the case may be, the director(s) specially authorised thereto by the Board of Directors) shall have the right to limit the number of subscriptions, on the basis of other reasonable considerations (such as, inter alia, the size and quality of the Subscription Requests), to limit or reduce the subscriptions and to implement the Capital Increase for a lower amount.

In principle, the subscription period shall commence on 16 May 2023 around 18:00 hours and end on 16 May 2023 around 21:00 hours (the "Subscription Period"). The Board of Directors (or, as the case may be, the director(s) specially authorised thereto by the Board of Directors) is authorised to postpone, extend, shorten and/or prematurely terminate the Subscription Period at its discretion, even if the New Shares to be issued have not or only partially been subscribed. In addition, the Board of Directors (or, as the case may be, the director(s) specially authorised thereto by the Board of Directors) have the possibility to postpone or cancel the Placing in full, depending on the circumstances.

2.2 ISSUE PRICE – JUSTIFICATION

The New Shares will be issued at an issue price which shall not be lower than eighteen euros and fifty eurocents (EUR 18.50) per New Share to be issued. The final issue price, which at the date of signing of the current report is not yet known, will be determined by the Board of Directors (or, as the case may be, the director(s) specially authorised thereto by the Board of Directors) along with the final number of New Shares to be issued, in accordance with the "solicitation and allocation" protocol, upon the recommendation of the Managers and taking into account various parameters, including, among others, the results of the ABB referred to hereinafter.

Qualifying investors will be able to make their respective Subscription Requests in the ABB based on a multitude of parameters (including in principle the valuation of the assets held by the Company).

During the Subscription Period, all eligible interested qualified investors will be able to indicate their interest to the Managers to subscribe for the New Shares to be issued, together with the number of New Shares and the issue price at which they are willing to subscribe for the New Shares.

The Board of Directors takes the view that such ABB can be considered a fair and objective method based on which a just issue price for the issue of the New Shares in connection with the Transaction can be determined.

Considering the contents of article 7:178 CCA, which allows the issuance of shares below, above or at fractional value of the existing shares with or without an issue premium, and having regard to the stock trading price of the existing shares which, at the date of this report, is lower than the fractional value of the existing shares, the issue price of the New Shares is expected to be lower than the fractional value of the existing shares. Accordingly, it is expressly provided that the New Shares will be allowed to be issued at an issue price lower than the fractional value of the existing shares and that upon realisation of the Capital Increase the fractional value of all the New Shares will, as applicable, be equalised with the fractional value of all existing shares such that after the realisation of the Capital Increase all then existing shares in the Company will represent the same value in the capital and have identical related rights.

The issue price per New Share shall be used entirely as full payment of capital and booked as such and shall be payable in full immediately upon subscription. In the exceptional situation that the final issue price of the New Shares would exceed the current fractional value of the existing shares, the Board of Directors (or, as the case may be, the director(s) specially authorised thereto by the Board of Directors) reserves the right to allocate part of the total final issue price of the New Shares equal to the current fractional value of the existing shares multiplied by the number of New Shares (and where appropriate rounded down to the nearest euro cent) as capital and to book the balance as issue premium under the equity on the liability side of the Company's balance sheet.

2.3 CANCELLATION OF THE STATUTORY PRE-EMPTION RIGHT OF EXISTING SHAREHOLDERS - JUSTIFICATION

The Board of Directors intends to cancel the statutory pre-emption right of the existing shareholders in the context of the Capital Increase and the accompanying Placing, in application of articles 7:198 and 7:200 juncto 7:191 of the CCA and its existing statutory authorisations thereto, with a view to enable the Managers to carry out the Placing by way of ABB.

Firstly, this approach allows the Company to raise a significant amount of new funds through an accelerated process with a view to strengthen the Company's equity, while at the same time allowing the Company to conduct additional debt-financed transactions in the future, thereby further realising the Company's growth ambitions.

Secondly, this approach allows the Company to expand its shareholder base both nationally and internationally, which strengthens both the stability and the diversity of the Company's shareholder structure and the liquidity of the issued shares of the Company on the regulated market of Euronext Brussels. The latter is both in the interest of the existing shareholders and in the interest of the Company considering future transactions on the financial markets.

Thirdly, this approach enables the Company to further strengthen its publicity and image as a listed company with investors, both nationally and internationally. The latter is in the interest of the further development of the Company's activities.

Fourthly, a Placing of the New Shares through an ABB allows the Company to raise new financial equity resources more quickly at a considerably lower cost, and – in principle – against more favourable conditions, relative to a public capital increase without cancellation of the statutory pre-emption rights of the existing shareholders. The latter is also both in the interest of the existing shareholders and in the interest of the Company.

For all the reasons stated above, the Board of Directors is of the opinion that the cancellation of the statutory pre-emption right of the existing shareholders is in the interest of the Company and the existing shareholders.

2.4 RIGHTS ATTACHED TO THE NEW SHARES AND THEIR FORM

The New Shares will be issued in accordance with Belgian law and will, from their issuance, be subject to applicable Belgian law and to all provisions of the Company's articles of association.

The New Shares will be ordinary shares representing the share capital, of the same type as the existing shares, fully paid up, entitled to vote and without nominal value. The New Shares will have identical economic and membership rights as the existing shares, including equal voting rights, equal dividend rights and equal rights regarding distribution of the liquidation reserves or upon any repayment of capital.

The New Shares will vest immediately on their issue and will be entitled to any distribution made by the Company as from their issuance date.

The New Shares will be issued in dematerialised form in accordance with the articles of association of the Company.

2.5 ADMISSION OF THE NEW SHARES TO TRADING ON THE REGULATED MARKET OF EURONEXT BRUSSELS

As part of the Placing, the Company will request Euronext Brussels for the admission to trading of the New Shares issued and foresees that the New Shares will be admitted to trading on the regulated market of Euronext Brussels immediately after their issue.

2.6 USE OF THE NET PROCEEDS OF THE PLACING

The main objective of the Placing is to achieve a balanced financing structure of the Company and to allow the Company to obtain new financial resources with a view to strengthen its cash position while at the same time strengthening its equity, so that it can continue to successfully implement its growth strategy.

The Company intends to use the net proceeds from the Placing, as the case may be in combination with additional debt financing, to finance acquisitions that are in line with the Company's core activities and broader growth strategy. Taken into account the foregoing, the Placing is sufficiently justified and in the interest of the Company and its continuing growth.

As explained in detail in point 2.3 of this report, the Board of Directors is of the opinion that the Placing and the related cancellation of the statutory pre-emption right of the existing shareholders are justified in the interest of the Company.

3 CONSEQUENCES FOR THE CAPITAL AND MEMBERSHIP RIGHTS OF THE COMPANY'S SHAREHOLDERS

The capital of the Company at the date of this report amounts to a total of five billion six hundred seventy-nine million nine hundred ninety-nine thousand nine hundred and seventy-eight euros (EUR 5,679,999,978.00) and is represented by a total of two hundred and thirty-three million eight hundred and forty-six thousand one hundred and fifty-three (233,846,153) shares, without nominal value. The fractional value per share currently amounts to twenty-four euros twenty-nine cents (EUR 24.29) (rounded up). At the date of this report, no other securities are outstanding which can convert into or entitle their holder to new shares in the Company. Based on the Company's consolidated IFRS Annual Accounts as per 31 December 2022, the book value of the Company's equity attributable to owners of the parent amounts to EUR 2,384,531,541.

The Capital Increase will result in existing shareholders of the Company:

• undergoing a future dilution of voting rights, dividend rights, rights to the proceeds from the liquidation of the Company and other rights attaching to the Company's shares (such as the statutory pre-emption right), in the proportions described below; and
• being exposed to a real risk of financial dilution of their shareholding, since the final issue price of the New Shares can potentially be lower than both the trading price of the Company's shares at that time and the current fractional value of the existing shares.

As the final number of New Shares to be issued in the framework of the Placing has not yet been determined at this point, it is not possible at the date of this report to calculate the exact dilution of the economic and membership rights of the current shareholders that will be caused by the Capital Increase. The final number of New Shares to be issued and their final issue price will be determined by the Board of Directors (or, as the case may be, the director(s) specially authorised thereto by the Board of Directors) upon the recommendation of the Managers on the basis of the results of the ABB, taking into account various relevant qualitative and quantitative elements set out in the "solicitation and allocation" protocol, including, but not limited to, the number of New Shares for which Subscription Requests were received, the size of the Subscription Requests received, the quality of the investors who submitted such Subscription Requests and the prices at which these Subscription Requests were submitted, as well as the market conditions and the trading price of the Company's shares at that time. In addition, once launched, the Placing may still be postponed or cancelled in its entirety, depending on the circumstances.

Taking into account the above, the following calculations regarding the financial consequences of the Placing for the existing shareholders are purely illustrative and hypothetical and are based on purely indicative financial parameters. The final issue price and the final number of New Shares to be issued in the framework of the Placing may differ materially from the hypothetical values used in this report.

The Board of Directors hereby finds that under each of these assumptions, the benefits of the Capital Increase for the Company and the existing shareholders, as explained earlier in this report, outweigh the dilution of the existing shareholders of the Company.

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Hypothetical issue price of New Shares	€ 18.50	€ 19.50	€ 20.50	€ 21.50	€ 22.50	€ 23.50
Total number of New Shares	10,810,810	10,256,410	9,756,097	9,302,325	8,888,888	8,510,638
Total number of outstanding shares after the realisation	244,656,963	244,102,563	243,602,250	243,148,478	242,735,041	242,356,791
of the Transaction
Impact on the consolidated equity (IFRS) per share (%)	3.59%	3.83%	4.04%	4.24%	4.41%	4.58%
Consolidated equity (IFRS) as at 31/12/2022 per share	€ 10.21	€ 10.21	€ 10.21	€ 10.21	€ 10.21	€ 10.21
before the realisation of the Transaction (€)
Consolidated equity (IFRS) as at 31/12/2022 per share	€ 10.58	€ 10.60	€ 10.62	€ 10.64	€ 10.66	€ 10.68
after the realisation of the Transaction (€)
Impact on share price of the Company (based on 30-day	-0.63%	-0.40%	-0.19%	-0.01%	0.16%	0.32%
average as at 15 May 2023) (%)
Company's share price (based on 30-day average as at 15	€ 21.55	€ 21.55	€ 21.55	€ 21.55	€ 21.55	€ 21.55
May 2023) before realisation of the Transaction (€)
Company's share price (based on 30-day average as at 15	€ 21.41	€ 21.46	€ 21.51	€ 21.55	€ 21.58	€ 21.62
May 2023) after realisation of the Transaction (€)
Impact on voting and profit rights per share of existing	-4.42%	-4.21%	-4.01%	-3.83%	-3.67%	-3.52%
shareholders (%)
Voting rights per share of existing shareholders before	0.0000004282%	0.0000004282 %	0.0000004282 %	0.0000004282 %	0.0000004282 %	0.0000004282 %
realisation of the Transaction (%)
Voting rights per share of existing shareholders after the	0.0000004092%	0.0000004101 %	0.0000004110 %	0.0000004118 %	0.0000004125 %	0.0000004131 %
realisation of the Transaction (%)
Dividend right per share (2022) before the realisation of	€ 0.2902	€ 0.2902	€ 0.2902	€ 0.2902	€ 0.2902	€ 0.2902
the Transaction (€)
Dividend right per share (2022) after the realisation of the	€ 0.2773	€ 0.2780	€ 0.2786	€ 0.2791	€ 0.2795	€ 0.2800
Transaction (€)

[signature page follows]

Approved and signed in one original copy on 16 May 2023 in Antwerp.

For the Board of Directors of Azelis Group NV,

[Dutch version signed]