Etteplan Oyj

Business ID 0545456-2

Board of Directors’ Review and Financial statements

January 1–December 31, 2024

Board of Directors’ Review

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Board of Directors’ Review January 1 – December 31, 2024

OPERATING ENVIRONMENT

The majority of Etteplan’s customers are industrial companies with several global megatrends influencing the development of their operating environment. For example, structural changes in the global economy, urbanization, climate change and sustainability are all influencing companies, national economies and people’s lives. In addition to these megatrends, the engineering industry is influenced primarily by three trends: digitalization, accelerating technological development and the growing need for highly competent employees. In particular, the application of artificial intelligence in various applications is accelerating. These trends are creating a need for intelligent and energy-efficient solutions in all industrial sectors.

The trend of centralizing service purchasing continues as customer demand becomes increasingly international, presenting growth opportunities for global engineering companies. The continued trend of service outsourcing has a positive effect on the industry’s development and it supports Etteplan’s growth. The competition for employees has eased in the prevailing market situation, but there is continued competition for specialized experts in certain areas.

DEVELOPMENT OF DEMAND BY CUSTOMER INDUSTRY

Geopolitical tensions affect demand in all customer industries. Demand in the Defense industry was at a good level, and demand in the Energy industry was at a moderate level. Demand in the Forest industry and demand in the Metal and Mining industry were at a weak level. Demand in the ICT and Electronics industry remained at a weak level. Demand in the Automotive industry was at a moderate level. Demand in the Chemical industry remained at a weak level.

DEVELOPMENT OF DEMAND IN ETTEPLAN’S OPERATING COUNTRIES

The uncertainty caused by geopolitical tensions has affected demand in all of our operating countries in Europe. Our customers’ order backlogs are generally on a downward trend, which affects their willingness

to invest and keeps our demand situation at a modest level at the start of 2025. The demand situation is particularly challenging in Finland and Germany. Geopolitical tensions have also increased uncertainty in China, as a result of which Western investments are at a low level. However, China’s internal market is still developing positively with regard to engineering services. This development is influenced by the strengthening of the trend of companies purchasing services instead of hiring employees of their own.

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REVENUE

The weakening of demand due to market uncertainty, the challenges in the operating environment and customers’ slow decision-making affected the accrual of revenue throughout the year. Revenue was increased by the acquisitions made during the year.

Etteplan’s revenue increased by 0.3 percent and was EUR 361.0 million (1–12/2023: EUR 360.0 million). 0.1 percent at comparable exchange rates. Organic revenue decreased by 4.7 percent. At comparable exchange rates, organic revenue decreased by 4.9 percent. Revenue from key accounts decreased by 8.5 percent.

Etteplan’s business is subject to periodic fluctuation due to the number of working days, holiday seasons and the timing of product development and investment projects in customer companies, which mainly take place in the spring and the latter part of the year.

The revenue of acquired companies is not included in organic revenue growth for 12 months following their acquisition. LAE Engineering GmbH is included in Etteplan’s figures starting from July 1, 2023, High Vision Engineering Sweden AB starting from September 1, 2023, Strongit ApS from January 1, 2024, and AFFRA AB from June 1, 2024.

RESULT

The full-year result was negatively affected by the weakening of demand due to market uncertainty, the challenges in the operating environment and the customers’ slow decision-making, as well as significant non- recurring items.

Operating profit (EBITA) decreased by by 21.1 percent and was EUR 24.4 (30.9) million, or 6.8 (8.6) percent of revenue. Operating profit (EBIT) decreased by 27.9 percent and was EUR 18.4 (25.5) million, or 5.1 (7.1) percent of revenue. The combined effect of non-recurring items on operating profit (EBITA) and operating profit (EBIT) was EUR -3.0 (-1.7) million million. Without the non-recurring items, the operating profit (EBITA) would have been 7.6 percent. The non-recurring items consisted mainly of expenses related to organizational restructuring and adaptation measures, costs related to the termination of the Building Technology business in Germany, and project write-downs.

The net amount of financial income and financial expenses came to EUR -4.8 (-4.7).

Profit before taxes was EUR 13.6 (20.8) million. Taxes in the income statement amounted to 23.5 (20.0) percent of the result before taxes. The amount of taxes was EUR 3.2 (4.2) million.

The profit for was EUR 10.4 (16.6) million. Earnings per share were EUR 0.41 (0.66). Equity per share was EUR 4.67 (4.55) at the end of December. Return on capital employed (ROCE) before taxes was 9.4 (13.3) percent.

CASH FLOW AND FINANCIAL POSITION

Operating cash flow improved and was EUR 31.0 (35.6) million. Cash flow after investments was EUR 9.0 (28.7) million. Operating cash flow accrues unevenly over the four quarters of the year due to periodic fluctuation in business.

The Group’s cash and cash equivalents stood at EUR 25.2 (23.4) million at the end of December.

The Group’s interest-bearing liabilities amounted to EUR 95.9 (86.6) million at the end of December. The amount of interest-bearing liabilities was affected by acquisitions made by the Group. Lease liabilities represented EUR 19.2 (21.4) million of interest-bearing liabilities.

The total of unused short-term credit facilities stood at EUR 16.1 (14.1) million.

Total assets on December 31, 2024, were EUR 297.8 (284.6) million. Goodwill on the balance sheet was EUR 117.4 (109.7) million.

At the end of December, the equity ratio was 40.5 (40.9) percent.

CAPITAL EXPENDITURE

The Group’s gross investments were EUR 29.2 (21.1) million. The gross investments mainly consisted of acquisitions, the acquisition of a minority stake in BJIT, increases in lease liabilities and equipment purchases.

PERSONNEL

The number of personnel stood at 3,803 (3,902) employees at the end of December 2024. The number of personnel decreased by 2.5 percent when compared to the end of 2023. Due to the unpredictable market situation, we have slowed down recruitment and implemented temporary layoffs during the review period. A total of 178 employees in Finland were temporarily laid off at the end of December 2024.

The Group employed 3,859 (3,949) people on average in 2024.

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The number of people employed by the Group outside of Finland stood at 1,921 (1,965) at the end of December, representing 51 (50) percent of the total number of employees.

BUSINESS REVIEW

The challenging market situation continued throughout 2024. The demand situation weakened further in the fourth quarter, resulting in a full-year decrease of 8.5 percent in revenue from key accounts. During the year, we shifted the focus of sales particularly to the defense industry and the energy industry, where the demand situation has been better than in other industries. In Europe, we had to implement adaptation measures to improve operational efficiency in almost all of our operating countries. In China, the market situation developed favorably in the second half of the year. Going forward, we will focus even more heavily on serving the internal market in China. The number of hours sold in the Chinese market increased by 10.9 percent. As the significance of cost competitiveness increases in global competition, there was also growing demand for our offshoring and nearshoring solutions, and we won several offshoring and nearshoring projects during the year.

In spite of the challenging market situation, we continued the implementation of our strategy and investments to develop our business. In particular, we developed our service offering in relation to artificial intelligence, and implemented several customer projects that make use of AI for customers including Valmet and SFS. The market around us is changing, and the significance of AI, in particular, continues to grow strongly. With this in mind, utilizing AI plays a very central role in the new strategy period that started at the beginning of 2025. We also continued to implement our growth strategy by acquiring Strongit ApS, a Danish technology service company that focuses on product development solutions, and AFFRA AB, a Swedish consulting company specializing in testing. Strongit ApS was acquired in January, and AFFRA AB was acquired in May. In addition, in June, we acquired a minority stake of 19.99% in BJIT, a globally operating IT consulting enterprise that is the largest in its industry in Bangladesh, which will strengthen our cost competitiveness in the future.

We published Etteplan’s renewed brand and values at the beginning of 2024. The company has developed and changed over the years from a traditional engineering company to a modern technology service company. With the renewed brand, the company is being developed to reflect its current status as a leading global technology service company in its field.

The objective of our strategy period Increasing value for customers, which concluded at the end of 2024, was to create even higher value for customers and support them in sustainable development, digitalization and the industrial transformation.

Our previous strategy has proven its effectiveness and our targets have steered us in the right direction. In creating our new strategy, we have further developed our previous strategy and, in connection with the update, kept elements of the strategy that have proven to be good for us.

Financial targets and outcomes for 2023–2024:

Growth: revenue more than EUR 500 million

Outcome in 2024: EUR 361 million

Surprising changes in the operating environment (the pandemic, the war in Ukraine) significantly weakened the market situation during the strategy period

International growth: the share of revenue coming from outside Finland is at least 55 percent

Outcome in 2024: 53 percent

Internationalization was supported by several acquisitions

Managed Services: the share of revenue from Managed Services is 75 percent (Managed Services Index, MSI)

Outcome in 2024: 65 percent

The development of the MSI was affected by a decrease in the volume of engineering and documentation services related to customers’ delivery projects

Profitability: operating profit (EBITA) over 10 percent of revenue

Outcome in 2024: 6.8 percent

Due to the difficult market situation and costs related to adaptation measures, we fell clearly short of the target in 2024

Etteplan’s new strategy period began on January 1, 2025

In December 2024, Etteplan’s Board of Directors approved the company’s renewed strategy and updated financial targets for the years 2025–2027. The strategy and targets came into effect on January 1, 2025. Digitalization, the growing importance of artificial intelligence (AI) and data, sustainability and the growing need for experts are key trends that affect the operations of both Etteplan and its customers. The main goal of the strategy update is to generate even more value for our customers and accelerate the transformation and development of customers’ and Etteplan’s business.

The strategy period 2025–2027 is called “Transformation with AI” and its three cornerstones are Trusted Partner , AI and Technology-Empowered Service Solutions and Success with People . Etteplan’s AI-powered service solutions are at the core of the updated strategy, and the company’s target is to increase the share of revenue derived from AI-driven service solutions developed by Etteplan to 35 percent by the end of 2027. AI and technologies, efficient processes, versatile know-how and world-class engineering methods are integrated

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into the service solutions. Based on a deep understanding of our customers’ needs, we offer scalable solutions that bring people and technology together and create tangible business value for our customers. We develop services related to data management and data maintenance that enable the efficient use of AI. At the end of 2024, AI-driven service solutions developed by Etteplan represented 2 percent of total revenue.

We seek growth both organically and through acquisitions. The sources of organic growth include new service solutions that utilize AI and technologies that produce new added value for our customers. Current service solutions are also enhanced with the help of AI. We develop new data-related service solutions that enable the efficient use of AI for industrial product companies and companies in process industries, and support their data management and maintenance. The third source of organic growth is our global delivery model and the utilization of nearshoring and offshoring to ensure competitiveness in the growing global competition.

Inorganic growth is created through acquisitions. Our goal is to offer services from all three of our service areas in all of our operating countries. We aim to grow in our current operating countries through acquisitions that strengthen our expertise, expand our service offering and improve our market position in selected markets and/or customer segments.

Etteplan’s financial and strategic targets from January 1, 2025:

Utilization of AI: The share of revenue derived from AI-driven service solutions developed by Etteplan will be 35 percent by the end of 2027

Managed Services: 75 percent of revenue from managed services (Managed Services Index, MSI) by the end of 2027

Growth: revenue over EUR 500 million in 2027

Profitability: Operating profit (EBITA) over 10 percent of revenue

Acquisitions

On May 27, 2024, Etteplan acquired AFFRA AB, a Swedish consulting company specializing in testing. Based in Gothenburg, AFFRA is a consulting company that specializes in software testing and, in particular, Hardware in the Loop (HIL) testing for the automotive and transport industry. All 23 of AFFRA’s professionals in testing, software development and embedded solutions were immediately transferred to Etteplan.

On January 8, 2024, Etteplan acquired Strongit ApS, a Danish technology service company that focuses on product development solutions. Strongit delivers its services with a team of 13 highly qualified engineering professionals and a network of around 70 freelancers in Copenhagen, Århus, and Gråsten in Denmark.

Acquisitions in 2023:

In September 2023, Etteplan acquired High Vision Engineering Sweden AB, a company that provides engineering services across various phases of product development for the automotive and manufacturing industry in western Sweden. As a result of the acquisition, 40 High Vision Engineering employees transferred to Etteplan.

In July 2023, Etteplan acquired LAE Engineering GmbH, a German engineering company with approximately 70 employees that offers specialized expertise across electrical engineering planning, power generation, building and industrial automation, as well as information management systems, and industrial IT. LAE Engineering is now part of our Engineering Solutions service area.

GOVERNANCE

General meeting

The Annual General Meeting of Etteplan Oyj was held on April 9, 2024. The Annual General Meeting approved the financial statements and discharged the members of the Board of Directors and the President and CEO from liability for the financial year 2023.

The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors, to pay a dividend of EUR 0.30 per share for the financial year 2023 and to leave the remaining funds in unrestricted equity. The dividend decided on by the Annual General Meeting was paid to the shareholders registered on the record date in the shareholders’ register maintained by Euroclear Finland Ltd. The record date of the payment of dividend was April 11, 2024, and the dividend was paid on April 18, 2024.

In accordance with the proposal of the Nomination and Remuneration Committee of the Board of Directors, the Annual General Meeting resolved that the Board of Directors shall consist of six (6) members. In accordance with the proposal of the Nomination and Remuneration Committee of the Board of Directors, the Annual General Meeting resolved on the annual remuneration of the members of the Board of Directors, the Chairman of the Board and the chairmen and members of the Nomination and Remuneration Committee and the Audit Committee.

In accordance with the proposal of the Nomination and Remuneration Committee of the Board of Directors, the Annual General Meeting re-elected Matti Huttunen, Robert Ingman, Päivi Lindqvist, Tomi Ristimäki, Sonja Sarasvuo and Mikko Tepponen as members of the Board of Directors. KPMG Oy Ab, Authorized Public Accountants, with Authorized Public Accountant Kim Järvi as the main responsible auditor, was elected as the company’s auditor.

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In its organization meeting subsequent to the Annual General Meeting, the Board of Directors of Etteplan Oyj elected Robert Ingman as Chairman of the Board of Directors. Matti Huttunen was elected the Chairman and Robert Ingman and Mikko Tepponen as members of the Nomination and Remuneration Committee of Etteplan Oyj. Päivi Lindqvist was elected the Chairman and Tomi Ristimäki and Sonja Sarasvuo as members of the Audit Committee of Etteplan Oyj.

Board authorizations

The Annual General Meeting held on April 9, 2024, authorized the Board of Directors to resolve on the repurchase of the company’s own shares in one or more tranches using the company’s unrestricted equity. A maximum of 2,000,000 shares in the company may be repurchased. The company may deviate from the obligation to repurchase shares in proportion to the shareholders’ current holdings, i.e. the Board has the right to decide on a directed repurchase of the company’s own shares.

The authorization includes the right for the Board to resolve on the repurchase of the company’s own shares through a tender offer made to all shareholders on equal terms and conditions and at the price determined by the Board, or in public trading organized by the Nasdaq Helsinki Ltd at the market price valid at any given time, so that the company’s total holding of own shares does not exceed ten (10) percent of all the shares in the company. The minimum price for the shares to be repurchased is the lowest market price quoted for the shares in the company in public trading and, correspondingly, the maximum price is the highest market price quoted for the shares in the company in public trading during the validity of the authorization.

Should the shares in the company be repurchased in public trading, such shares will not be purchased in proportion to the shareholders’ current holdings. In that case, there must be a weighty financial reason for the company to repurchase its own shares. The shares may be repurchased in order to be used as consideration in potential acquisitions or in other structural arrangements. The shares may also be used for carrying out the company’s incentive schemes for its personnel. The repurchased shares may be retained by the company, invalidated or transferred further. The repurchase of the company’s own shares will reduce the non-restricted equity of the company.

The authorization is valid for eighteen (18) months from the date of the resolution of the Annual General Meeting starting on April 9, 2024, and ending on October 8, 2025. The authorization replaces the corresponding previous authorization.

The Annual General Meeting held on April 9, 2024, authorized the Board of Directors to resolve on the issuance of a maximum of 2,500,000 shares through issuance of shares, option rights or other special rights

entitling to shares under Chapter 10, Section 1 of the Finnish Companies Act in one or more issues. The authorization includes the right to decide to issue either new shares or shares held by the company.

The authorization includes the right to deviate from the existing shareholders’ pre-emptive subscription right as set forth in Chapter 9, Article 3 of the Companies Act. Therefore, the Board of Directors has the right to direct the share issue, or issuance of the option rights or other special rights conferring entitlement to shares. The authorization also includes the right to decide on all the terms of share issue, option rights or other special rights conferring entitlement to shares. The authorization therefore includes the right to determine share subscription prices, persons entitled to subscribe the shares and other terms and conditions applicable to the subscription. In order to deviate from the shareholders’ pre-emptive subscription right, the company must have a weighty financial reason such as financing a company acquisition, other arrangement in connection with the development of the company’s business or equity or an incentive scheme for the personnel. In connection with the share issuance, the Board of Directors is entitled to decide that the shares may be subscribed against contribution in kind or otherwise under special terms and conditions. The authorization includes the right to determine whether the subscription price will be entered into the share capital or into the unrestricted equity fund. The authorization is valid for eighteen (18) months from the date of the resolution of the Annual General Meeting starting on April 9, 2024, and ending on October 8, 2025. The authorization replaces the corresponding previous authorization.

SHARES

Etteplan’s shares are listed in Nasdaq Helsinki Ltd’s Mid Cap market capitalization group in the Industrials sector under the ETTE ticker. The company has one series of shares. All shares confer an equal right to a dividend and the company’s funds. The company’s share capital on December 31, 2024, was EUR 5,000,000.00 and the total number of shares was 25,350,793.

On January 8, 2024, Etteplan issued a stock exchange release announcing the acquisition of Strongit ApS. As part of the financing of the transaction, Etteplan Oyj’s Board of Directors, in its meeting held on January 8, 2024, made a conditional decision on a share issue based on the share issue authorization given to the Board of Directors by the Annual General Meeting on April 5, 2023. In accordance with the terms of the transaction, the purchase price was paid through a share issue to the sellers and cash. The contract of sale, which was a condition of the decision, was on January 8, 2024, and at the same time the sellers subscribed for 150,000 new Etteplan shares as a part payment for the purchase amount. The subscription price per share paid for the shares was EUR 14.048. The new shares carry the right to dividends starting from the financial year 2024.

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The new shares subscribed for in the directed share issue were registered in the Trade Register on April 26, 2024, and in the book-entry system maintained by Euroclear Finland Oy on May 10, 2024. The shares were listed for trading on Nasdaq Helsinki on May 10, 2024. The total number of Etteplan shares after the issue is 25,350,793. However, trading in the new shares will only be possible after three years, when the transfer restriction agreed upon in connection with the transaction has expired.

The number of Etteplan Oyj shares traded in January–December was 429,697 (1–12/2023: 383,929), for a total value of EUR 5.34 (6.08) million. The share price low was EUR 9.86, the high EUR 14.35, the average EUR 12.43 and the closing price EUR 10.00. Market capitalization on December 31, 2024, was EUR 252.5 (346.38) million. On December 31, 2024, Etteplan had 3,483 (3,584) shareholders.

Etteplan Oyj and Lago Kapital Ltd have a market making agreement in compliance with the Liquidity Providing (LP) requirements issued by Nasdaq Helsinki Ltd. The liquidity providing in accordance with the agreement commenced on February 17, 2020. According to the agreement, Lago Kapital Ltd will provide Etteplan’s share with bids and offers so that the maximum spread is 4 per cent, calculated from the bid quotation. Both the bid and offer side shall include a number of shares corresponding to the value of at least EUR 3,000. Lago Kapital Ltd undertakes to submit bids and offers for the share of Etteplan Oyj on the trading system maintained by Nasdaq Helsinki Ltd on each trading day for at least 85 per cent of the time of continuous trading. The market making agreement aims at increasing the share’s liquidity and decreasing the share price volatility, thus facilitating trading for private investors in particular.

Etteplan did not purchase any of its own shares in January–December 2024. The company held 100,921 of its own shares at the end of December 2024 (December 31, 2023: 100,921), corresponding to 0.4 percent of all shares and voting rights.

Etteplan Oyj’s incentive plan for key personnel 2023–2025

The Board of Directors of Etteplan Oyj decided on April 20, 2023, to establish a new share incentive plan for the Group’s key personnel. The aim of the share incentive plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of Etteplan, to commit the key personnel to the company, and to offer them a competitive reward plan based on earning the company shares. The plan includes one earning period which includes the calendar years 2023–2025. The plan is in line with Etteplan’s strategy and supports reaching the company’s financial targets.

The earnings criteria are Etteplan Group’s revenue increase and earnings per share development. The potential reward will be paid partly in Etteplan’s shares and partly in cash after the end of the earning

period. The cash portion is intended to cover taxes and tax-related costs arising from the reward to the key personnel. Approximately 35 people belong to the plan, including the Management Group of Etteplan. The rewards to be paid on the basis of the plan will correspond to the value of a maximum total of 300,000 Etteplan Oyj shares (including also the portion to be paid in cash). The shares to be paid out as potential rewards will be transferred from the shares held by the company or shares acquired from the market.

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Key figures for shares

EVENTS AFTER THE REVIEW PERIOD

January 16, 2025: Etteplan strengthens its position in Germany by acquiring Novacon Powertrain, an engineering company focused on E-mobility and powertrain development

Etteplan strengthens its position in Central Europe by acquiring all shares in the German product engineering services company Novacon Powertrain GmbH, which focuses on electrification in the automotive industry and the development of engine technology. The acquisition brings Etteplan a new product development unit with strong expertise in the electrification of motoring and rail traffic as well as in the development of advanced powertrains. The revenue of the company, which employs about 180 professionals, was approximately EUR 18 million in 2023. In the acquisition, the founder and CEO of Novacon Powertrain, Philipp Welz, sells his ownership of the company to Etteplan and continues to manage the acquired business. The purchase price to be paid in cash is not disclosed.

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Expertise and Personnel: Etteplan’s success is based on highly educated and experienced personnel who bring deep technical knowledge and expertise. The company invests in continuous development and training of its employees, ensuring they stay up-to-date with the latest technologies and methods.

Technologies and Innovations: Etteplan extensively utilizes the latest technologies and innovations in its service solutions. The company continuously develops new technology-based services that improve customers’ business processes and competitiveness. For example, the utilization of artificial intelligence and digitalization are key factors in Etteplan’s services.

Customer Relationships and Partnerships: Strong and long-term customer relationships are the foundation of Etteplan’s business. The company aims to deepen its partnerships with customers by understanding their business needs and providing tailored solutions that deliver tangible added value.

Etteplan’s business is based on the effective utilization of these intangible assets, enabling the company to grow and maintain its competitiveness in a rapidly changing market environment.

FINANCIAL GUIDANCE 2025

Etteplan issues guidance for revenue and operating profit (EBIT) as a numerical range and issues the following estimate:

Revenue in 2025 is estimated to be EUR 365–400 (2024: 361.0) million, and

operating profit (EBIT) in 2025 is estimated to be EUR 23–30 (2024: 18.4) million.

THE BOARD’S PROPOSAL FOR THE DISTRIBUTION OF PROFITS

The parent company’s distributable shareholders’ equity according to the balance sheet on December 31, 2024, is EUR 95,332,173.56. The Board of Directors will propose to the Annual General Meeting, which will convene on April 8, 2025, that on the dividend payout date a dividend of EUR 0.22 per share be paid on the company’s externally owned shares, for a total amount of EUR 5,577,174.46 at most, and that the remaining profit be transferred to retained earnings.

ANNUAL GENERAL MEETING

Etteplan Oyj’s Annual General Meeting will be held on Tuesday, April 8, 2025. The summons to the AGM is published as a separate release.

OPERATING RISKS AND UNCERTAINTY FACTORS

Etteplan’s financial results are exposed to a number of strategic, operational and financial risks. The uncertainties caused by the general economic development continue to constitute risks for Etteplan’s business. The possibility of changes in customers’ business operations is a significant risk to Etteplan’s operations. The company’s operations are based on skilled staff. The availability of competent professionals is an important factor for ensuring profitable growth and operations. The availability of personnel, particularly in certain expert disciplines, continues to present a business risk.

Increased geopolitical tensions and the global political situation make the future more difficult to predict and increase uncertainty in the markets, which has an impact on our customers’ operations and supply chains and, consequently, Etteplan’s demand.

Changes in legislation and regulations may have an impact on Etteplan. The reforms to labor market legislation that entered into force in Sweden in October 2024 may have an impact on our business.

Etteplan assesses business risks annually and actively monitors their development during the year. The focus of the assessment is particularly on monitoring changes in already identified risks, identifying new business risks and developing proactive risk management. The results of the assessment are presented in Etteplan’s Corporate Governance Statement 2024.

MARKET OUTLOOK 2025

The most important factor affecting Etteplan’s business is the global development of the machinery and metal industry. Uncertainty is continuing in the markets due to geopolitical tensions and the global political situation. Order backlogs are generally on a downward trend, which affects our customers’ willingness to invest and keeps our demand situation at a modest level at the start of 2025. Investments related to the defense industry are continuing at a good level, while investments related to the energy industry are at a moderate level. However, investments related to accelerating the green transition have slowed slightly. Nevertheless, we expect the market situation to take a turn for the better in 2025.

KEY INTANGIBLE ASSETS AND THEIR VALUE-ADDING CHARACTERISTICS

Etteplan’s business is strongly based on intangible assets that provide significant added value to our customers and support the company’s strategic goals. These assets include expertise, technologies and innovations, as well as strong customer relationship management.

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CORPORATE GOVERNANCE STATEMENT

Etteplan publishes the Corporate Governance Statement for 2024 separately from the Board of Directors’ review. The statement is available on the Company’s website www.etteplan.com .

NON-IFRS KEY FIGURES

Etteplan presents non-IFRS key figures to supplement its consolidated financial statements which are prepared in accordance with IFRS. These key figures are designed to measure growth and provide insight into the company’s underlying operational performance. This section describes the most important non-IFRS key figures used by the Group. Formulas for key figures (IFRS and Non-IFRS) are presented at the end of Board of Directors’ Review.

Operating profit (EBITA) and EBITA, %

Operating profit (EBITA) is presented, because it reflects the Group’s operational performance better that Operating profit (EBIT). Operating profit (EBITA) does not include amortization related to intangible assets acquired in business combinations. EBITA, % presents Operating profit (EBITA) as a percentage share of revenue.

Reconciliation of Operating profit (EBITA) and Profit before taxes

Organic/In-organic growth and growth in comparable currencies

Organic (revenue) growth is presented in addition to total revenue growth, because it improves the comparability of revenue growth between periods by presenting the revenue growth without the effects of the last 12 months’ acquisitions. Organic growth is calculated by comparing revenue between comparison periods excluding revenue from acquisitions that have taken place in the past 12 months. The revenue growth created by the last 12 months’ acquisitions is presented as in-organic growth. Revenue growth in comparable currencies is presented, because it improves the comparability of revenue growth between periods by presenting the revenue growth with comparable exchange rates. For the calculation of growth in comparable currencies, revenue for the current period is calculated by using the comparable period’s exchange rates. The figure is presented for Group revenue and organic growth.

The share of revenue represented by Managed Services

Etteplan measures the share of revenue represented by Managed Services (MSI Index). Managed Services are service solutions, such as projects and continuous services, where the customer pays for results instead of resources. The share of revenue represented by Managed Services is presented, because it describes Etteplan’s strategy implementation and explains, in part, the changes in profitability.

Etteplan Oyj Board of Directors

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Sustainability Statements

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1. General information .................................................... 14

2. Environmental information ........................................ 35

3. Social information ........................................................ 62

4. Governance information ............................................ 82

ESRS Content index ......................................................... 90

1. General information

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ESRS 2 General Disclosures ......................................... 15

Basis for preparation ...................................................... 15

Governance ........................................................................ 17

Strategy ............................................................................... 21

Impact, risk and opportunity management ....................................................................... 27

general information

ESRS 2 General Disclosures

Basis for preparation

BP-1 – GENERAL BASIS FOR THE PREPARATION OF SUSTAINABILITY STATEMENTS

The sustainability statements have been prepared on a consolidated basis based on the European Sustainability Reporting Standards (ESRS) issued by the European Financial Reporting Advisory Group (EFRAG). Risks, impacts, and opportunities across the value chain, from upstream to downstream, have been identified, along with metrics and targets for sustainability reporting. The exception to this is listed in section E1-6, which are excluded from the carbon footprint calculations.

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We have identified risks, impacts, and opportunities from upstream to downstream. We have identified metrics and targets for sustainability reporting.

No subsidiary undertakings included in consolidation are exempted from individual or consolidated sustainability reporting.

Our sustainability statements comprehensively address the entire value chain, encompassing Etteplan’s own operations upstream, downstream, end users, and society.

Etteplan’s Own Operations: Our sustainability efforts are thoroughly embedded in the countries where we operate. We strive to implement and maintain sustainable practices across all our locations, ensuring that our operations contribute positively to the environment and society.

Upstream: This segment includes our suppliers and shareholders. We are committed to ensuring that our suppliers adhere to sustainable practices and that our shareholders are informed about our sustainability initiatives and their impacts.