Tessenderlo : Annual report (in English) Friday, April 12, 2024

Table of contents

Company profile

3

ACTIVITY REPORT

2023 highlights	6
Message from the CEO and the Chairman to the shareholders	9
Key figures at a glance	11
Our Agro segment	15
Our Bio-valorization segment	22
Our Industrial Solutions segment	26
Our Machines & Technologies segment	30
Our T-Power segment	33
Information for shareholders	35

MANAGEMENT REPORT

Business progress	38
Risk analysis	41
Corporate governance statement	47

SUSTAINABILITY REPORT

Our sustainability strategy	69
Actions and evolutions 2023: Environment	89
Actions and evolutions 2023: Social	108
Governance and prosperity	125
Reporting and framework	142
Appendices	144

FINANCIAL REPORT

Consolidated financial statements	150
Statement on the true and fair view of the consolidated financial
statements and the fair overview of the management report	238
Statutory auditor's report	239
Statutory financial report	245
Financial glossary	248
Alternative performance measures	250

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Company profile

With a history that dates back to 1919, Tessenderlo Group has evolved over recent years from a chemical company into a diversified industrial group that focuses on agriculture, valorizing bio- residuals, machinery, mechanical engineering, electronics, energy, and providing industrial solutions with a focus on water.

With more than 7,500 people working at over one hundred locations across the globe, Tessenderlo Group is a leader in most of its markets. We primarily serve customers in agriculture, food, textile, industry, construction and health and consumer goods end markets. Our belief that "Every Molecule Counts" is at the heart of the strategy of our group: Tessenderlo Group continually strives to valorize its products and processes to the maximum and to add value to everything it does.

Tessenderlo Group's activities are subdivided into five operating segments:

The Agro segment combines our activities in the production, sales and marketing of crop nutrition (liquid crop fertilizers and potassium sulfate fertilizers based on sulfur) as well as crop protection products. The Agro segment includes the Crop Vitality™, Tessenderlo Kerley International, NovaSource®, and Violleau business units.

Our activities in animal by-product processing are combined in the Bio-valorizationsegment. This consists of PB Leiner (the production, trading and sales of gelatins and collagen peptides) and Akiolis (the rendering, production and sales of proteins and fats).

The Industrial Solutions segment includes products, systems and solutions for the processing and treatment of water, including flocculation and precipitation. The Industrial Solutions segment includes DYKA Group (with DYKA, JDP, and BT Nyloplast), Kuhlmann Europe and moleko™.

The Machines & Technologies segment includes the business unit Picanol Group, which is composed of four branded entities: Picanol (weaving machines), Proferro (foundry and mechanical finishing), Psicontrol (development and production of electronics) and Melotte (3D metal printing & high precision manufacturing).

The T-Powersegment includes the activities of Tessenderlo Group regarding the generation of electricity, in particular, the 425 MW CCGT power plant (Combined Cycle Gas Turbine) of T-Power.

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Tessenderlo Group is marketing its products and services worldwide, with branches all over the world, through its five segments.

Agro

Crop Vitality | NovaSource: 12 production plants and 1 under construction (US), and more than 100 terminals (US).

Tessenderlo Kerley International: 3 production plants (Belgium, France, Turkey), and 1 under construction (the Netherlands), and more than 10 terminals in Europe and Mexico.

Violleau: 2 production plants (France).

Bio-valorization

PB Leiner: 3 production plants in Europe (Belgium, Germany, UK), 2 in China, and 3 in the Americas (US, Argentina, Brazil).

Akiolis: 12 production plants and 48 collection centers in France, 1 production plant in Spain.

Industrial Solutions

DYKA Group: 9 production plants (2 in the Netherlands, 1 in Belgium, 3 in France, 1 in Germany, 1 in Poland, and 1 in Hungary) and more than 70 branches in Europe.

Kuhlmann Europe: 4 production plants (2 in Belgium, 1 in France, and 1 in Switzerland).

moleko: 3 production plants (US).

Machines & Technologies

Picanol Group: 4 production plants (2 in Belgium, 1 in Romania, and 1 in China). Sales offices for weaving machines, spare parts, and after-sales services are located in Brazil, China, India, Indonesia, Mexico, Turkey, and the US.

T-Power

T-Power: 1 production plant (Belgium).

Tessenderlo Group realized a consolidated turnover of 2,928.3 million EUR in 2023. The company is listed on Euronext Brussels and is part of the Next 150 and BEL Mid indices. Financial news sources: Bloomberg: TESB BB - Reuters: TesB.BR - Datastream: B:Tes.

Disclaimer

This document may contain forward-looking statements. Such statements reflect the views of management regarding future events at the date of this document. Furthermore, they involve known and unknown risks, uncertainties and other factors that may cause actual results to be different from any results, performance or achievements expressed or implied by such forward-looking statements. Tessenderlo Group provides the information in this document as at the date of publication and, subject to applicable legislation, does not undertake any obligation to update, clarify or correct any forward-looking statements contained in this document in light of new information, future events or otherwise. Tessenderlo Group disclaims any liability for statements made or published by third parties (including any employees who are not explicitly mandated by Tessenderlo Group) and, subject to applicable legislation, does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other document it issues.

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2023 highlights

In January 2023, Picanol Group became a business unit in the

Machines & Technologies segment of Tessenderlo Group.

In January 2023, the Akiolis business unit (Bio-valorization segment) acquired the real estate and production assets of a former Spanish rendering company (Ribera d'Ondara, Lleida, Spain). The plant specializes in pig and poultry rendering and is located in one of the most intensive pig and poultry farming regions in Spain. Akiolis resumed operations in the first quarter of 2023 under the name Akiolis Iberia.

In January 2023, Tessenderlo Group signed an agreement for the acquisition of the marketing and sales activities for ammonium thiosulfate (ATS) fertilizers produced by Esseco Srl (part of Esseco Group) in Trecate, Italy. The deal became operational in March 2023, and the fertilizers are marketed by the Tessenderlo Kerley International business unit (Agro segment).

In January 2023, Tessenderlo Group's PB Leiner business unit (Bio-valorization segment) finalized a new joint venture with D&D Participações Societárias, which is one of Brazil's leading tannery groups. D&D Participações Societárias acquired a 40% minority stake in PB Leiner's Brazilian plant (PB Brasil Industria e Comercio de Gelatinas Ltda). The combined strength of the two companies will enable a long-term, sustainable supply of a premium bovine gelatin product range, based on PB Leiner's technology.

In March 2023, Tessenderlo Group's business unit PB Leiner held an inauguration ceremony to mark the start of PB Leiner (Hainan) Biotechnology Ltd. In November 2022, PB Leiner entered into a joint venture (80% owned by Tessenderlo Group) with Hainan Xiangtai Group for the production and sale of fish collagen peptides based on PB Leiner's technology. The first production batches of PB Leiner's SOLUGEL® premium fish collagen peptides were shipped in the second quarter of 2023.

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In April 2023, Tessenderlo Group sold 654,000 shares (which is equivalent to a participation of 14%) in Rieter Holding AG (SWX: RIEN). The sale of this financial participation in Rieter Holding AG reflected Tessenderlo Group's intention to focus more on its core business.

In June 2023, Picanol (Machines & Technologies segment) successfully participated in the 19th edition of ITMA in Milan, Italy. ITMA is the most important four-yearly textile machinery exhibition in the world and Picanol's new Ultimax rapier weaving machine was received with much acclaim. Picanol was once again able to present itself at the event as a technology leader in airjet and rapier weaving machines.

In July 2023, Violleau put its new production line for organic fertilizers in Vénérolles (Aisne, France) into operation (Agro segment). The new production line has been built on the site of the Akiolis plant in Vénérolles.

In March 2023, a share repurchase program was started for an amount not exceeding 40 million EUR. As the share price was quoted below its book value, as well as taking into account the liquidity position of the group, the Board of Directors of Tessenderlo Group was of the opinion that it was opportune to proceed with the repurchase of its own shares. By the end of 2023, Tessenderlo Group had acquired 1,149,000 of its own shares at an average price of 28.21 EUR per share, for a total amount of 32.4 million EUR. Pursuant to the authorization granted by the extraordinary general meeting of May 10, 2022, the Board of Directors of Tessenderlo Group decided to cancel in December 2023 1,083,003 treasury shares purchased under the share repurchase program launched in March 2023.

In the fourth quarter of 2023, Tessenderlo Group announced several senior leadership changes as part of a further succession planning for the group. In this context, an exit agreement was concluded with Mr. Stefaan Haspeslagh whereby his respective executive functions as CFO and COO ended on December 31, 2023. Mr. Haspeslagh will continue to serve as Director and Chairman of the Board of Directors until the next General Shareholders' Meeting on May 14, 2024.

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After the balance sheet date

On January 1, 2024, Mr. Miguel de Potter has joined Tessenderlo Group as the new Chief Financial Officer (CFO). Meanwhile, Mrs. Sandra Hoeylaerts, who started on September 27, 2023, as Chief HR Officer at Tessenderlo Group, has taken up the position of Chief Transformation Officer (CTO) as from January 1, 2024. The new ExCom is made up of Mr. Luc Tack (CEO), Mrs. Sandra Hoeylaerts (CTO), and Mr. Miguel de Potter (CFO) as from January 1, 2024, onwards.

In March 2024, Kuhlmann Europe (Industrial Solutions segment) disclosed a strategic move by unveiling an investment of approximately 35 million EUR to expand its current ferric chloride production capacity for iron-based coagulants at its Loos site in France. This investment aims at fortifying Kuhlmann Europe's standing as a prominent coagulant manufacturer in Europe, solidifying the position of the Loos facility as the continent's largest ferric chloride production plant. The construction of the innovative chlorination installation is scheduled to commence by the end of 2024, with delivery anticipated in early 2026.

Construction works on the new plants in Defiance (Ohio, US) and Geleen (the Netherlands) remain on schedule. The Defiance plant will produce the leading liquid and sulfur-based fertilizers Thio-Sul®, KTS®, K-Row 23®, and sulfite chemicals for industrial markets (Agro and Industrial Solutions segments). The Defiance plant is scheduled to start operations by the end of 2024. Meanwhile, the Thio-Sul® plant in Geleen (Agro segment) is expected to be operational by mid-2024.

Construction works on the new Picanol Group headquarters (Machines & Technologies segment) in Ieper (Belgium) remained on track. The opening of the new headquarters is planned for the end of 2024.

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Message from the CEO and the Chairman to the shareholders

Dear Shareholders,

2023 proved to be a challenging year for Tessenderlo Group, and it followed what was one of the best years in the history of our group in 2022. In 2023, we faced military conflicts, geopolitical tensions, fears of recession, as well as a rise in the cost of living due to inflation. All of these elements had an impact on our business, both in terms of customer demand and sales margins.

Tessenderlo Group generated a consolidated revenue of 2,928.3 million EUR in 2023, compared to a Pro Forma revenue (including Picanol Group) of 3,321.7 million EUR in 2022, which represents a revenue decrease of -11.8%. The decrease in revenue occurred in each of our five operating segments: Agro -18.5%,Bio-valorization-9.2%, Industrial Solutions -3.2%, Machines & Technologies -15.2%, and T-Power-4.7%. The 2023 Adjusted EBITDA amounts to 318.7 million EUR, compared to a Pro Forma Adjusted EBITDA of 467.0 million EUR in 2022. Tessenderlo Group closed the 2023 financial year with a net profit of 114.4 million EUR compared to 161.5 million EUR (Pro Forma) in 2022.

Despite the challenging conditions we encountered in our various markets, we once again made good progress on many fronts last year and continued with our robust investment program. Indeed, we remain fully committed to strengthening our areas of competence and expertise because we truly believe in the value of our products for the future.

Also in 2023, we continued our efforts with regard to sustainability, which remains centered around our "Every Molecule Counts" philosophy. We are more convinced than ever that we have a process to make every stream more sustainable, and that new value can be discovered by applying these processes. You can learn more about our commitment to creating even greater sustainability in our 2023 Sustainability Report, which forms part of this annual report.

In 2023, as in previous years, we remained focused on increasing our logistics efficiency, debottlenecking plants, investments in new plants, implementing coordinated purchasing and sourcing activities, and improving customer focus to better serve the markets in which we operate. All these initiatives, combined with a constant focus on operational excellence, will contribute to better results for Tessenderlo Group in the future.

Changes to the Executive Committee

In the fourth quarter of 2023, a number of senior management changes were announced as part of a succession planning of the Executive Committee (ExCom). Therefore, an agreement was concluded between Tessenderlo Group and Mr. Stefaan Haspeslagh, whereby his respective executive positions as CFO and COO ended on December 31, 2023. He will stay on as Director and Chairman of the Board of Directors until the next general meeting of shareholders in 2024. On behalf of the Board of Directors and all Tessenderlo Group employees, we would like to thank him for the many contributions he has made to the group, and for his dedication, leadership, and efforts over the past years.

With effect from January 1, 2024, the new Executive Committee of Tessenderlo Group has been composed of Mr. Luc Tack (CEO), Mr. Miguel de Potter (Chief Financial Officer), and Mrs. Sandra Hoeylaerts (Chief Transformation Officer).

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Dividend

The Board of Directors will propose to the shareholders, at the annual shareholders' meeting of May 14, 2024, to approve a dividend distribution of 63.3 million EUR or a dividend per share of 0.75 EUR. The dividend has not been accounted for. The policy going forward will be to distribute a dividend, taking into account the cash availability and the short-term cash needs.

Outlook

The group anticipates a continued high level of economic uncertainty in 2024. Based on currently available information, the group expects that the 2024 Adjusted EBITDA will be in line with the 2023 Adjusted EBITDA of 318.7 million EUR. The group wishes to emphasize that it currently operates in a volatile geopolitical, economic, and financial environment.

On behalf of the Board of Directors, we would like to thank everyone who contributed to the success of Tessenderlo Group in 2023: our employees for their efforts and our shareholders, customers, and business partners for the confidence they show in our group.

Tessenderlo Group will continue to grow, thanks to our more than 7,500 employees worldwide, who are so passionate about our "Every Molecule Counts" philosophy. This is and will remain our contribution and goal for ensuring a sustainable and better future.

Kind regards,
Luc Tack	Stefaan Haspeslagh
CEO	Chairman of the Board of Directors

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