General part

The EU Taxonomy as part of the European Green Deal

The declared goal of the European Union - including the Paris Climate Agreement - is to become climate-neutral by 2050. The course for this is being set by the European Green Deal, which includes the "EU Action on Plan Sustainable Finance" as an important driver. The aim is to redirect capital flows towards sustainable investments, take sustainability into account in risk management and promote transparency and a long-term approach.

The EU Taxonomy Regulation (EU Regulation (EU) 2020/852; in short: "EU Taxonomy") is a key instrument for redirecting financial flows into sustainable and future-proof economic activities. The EU Taxonomy is a classification system that aims to create a uniform understanding of sustainable economic activities in the EU and make the sustainability performance of companies more comparable.

The EU Taxonomy includes the following six environmental objectives:

The delegated act on the EU Taxonomy has been applicable for the first time since the 2021 reporting year. The content and presentation of the EU Taxonomy Regulation is defined by Delegated Regulation 2021/2178 of July 6, 2021 and supplemented by Delegated Regulation 2022/1214 of March 9, 2022 and the six annexes to Delegated Regulation (EU) 2021/2139. EU documents published after the end of the 2024 financial year for further clarification could no longer be taken into account in this annual report. Due to the obligation to disclose non-financial information (EU Directive 2014/95/EU), Uzin Utz has been subject to the EU Taxonomy reporting obligation since the 2021 financial year. At the time of preparing this annual report, the economic activities for all six environmental objectives are to be reviewed for their taxonomy eligibility and taxonomy alignment.

Disclosure

Uzin Utz reports on the taxonomy eligibility and taxonomy alignment of its own economic activities in accordance with the EU documents on the EU Taxonomy published in the 2024 financial year. In addition, information is provided on the process of assessing taxonomy eligibility and taxonomy alignment. All fully consolidated companies of the Uzin Utz Group are taken into account.

Reporting is based on the key figures turnover, capital expenditures (CapEx) and operating expenditures (OpEx). A ratio is calculated in each case to determine the taxonomy-eligible, taxonomy-aligned and non-taxonomy-eligible shares of these key figures. The denominator is formed by the total turnovers, CapEx and OpEx within the defined framework of the EU Taxonomy. The numerator results from the taxonomy-eligible and taxonomy-aligned shares of the corresponding key figures. The key figures are defined as follows:

In accordance with Directive (EU) 2021/2139 Annex I in conjunction with Directive 2013/34/EU, revenue is defined as net sales of goods or services including intangible assets in accordance with International Accounting Standard (IAS) 1. This corresponds to the disclosures on net sales in the comprehensive income statement.

Capital expenditures (CapEx) are defined as additions to property, plant and equipment and intangible assets in the financial year under review before depreciation and amortization and revaluations, including those from revaluations and impairments in the financial year under review and excluding changes in fair value. In accordance with the EU Taxonomy Regulation, investments in property, plant and equipment (IAS 16), intangible assets (IAS 38), investment property (IAS 40) and right-of-use assets from leases (IFRS 16) are taken into account. Leases that do not lead to the recognition of a right-of-use asset are not to be recognized as capital expenditure.

According to the EU Taxonomy, operating expenditures (OpEx) include direct and non-capitalized costs relating to research and development, building refurbishment measures, short-term leases, maintenance and repairs. In addition, all other direct expenses for the ongoing maintenance of property, plant and equipment that are carried out by the company itself or by contracted third parties to whom activities necessary to ensure the continuous and efficient operation of the property, plant and equipment have been outsourced are taken into account. This definition is narrow and only takes into account the part described and therefore not all of a company's operating costs.

Uniform processes and clear delimitation mechanisms prevent double or multiple counting when allocating turnover, CapEx and OpEx figures within the scope of economic activities. Each economic activity is clearly identified and recorded once when determining its taxonomy eligibility, regardless of which of the six environmental objectives it is included in. Structured control instruments are used to avoid double counting, including precise delimitation and allocation guidelines, comprehensive documentation for data collection and KPI calculation as well as multi-stage review mechanisms. These measures ensure consistent and compliant reporting.

Taxonomy eligibility

An economic activity occurs when resources such as capital, goods, labor, production techniques or intermediate products are combined for the purpose of producing certain goods or services. The main characteristics are the use of resources, a production process and the products (goods or services) produced. If a company generates turnovers, incurs capital expenditures (CapEx) or operating expenditures (OpEx) associated with an economic activity described in the delegated act, then an activity is taxonomy-eligible. Taxonomy-eligible economic activities are generally able to make a significant contribution to one of the environmental objectives defined in the EU Taxonomy. In particular, large industries with CO2-intensive economic activities are taken into account in the EU Taxonomy Regulation. Not every economic activity is currently covered by the delegated act of the EU Taxonomy.

Taxonomy alignment

According to Article 3 of the EU Taxonomy and the criteria set out therein, an economic activity is considered environmentally sustainable, i.e. taxonomy-aligned, if the following three criteria are equally fulfilled in addition to taxonomy eligibility:

• It makes a significant contribution to the achievement of one or more environmental objectives of the EU Taxonomy by meeting the technical screening criteria (TSC).
• It does not contribute to a violation of other environmental objectives (Do no significant harm (DNSH) principle).
• The specified criteria of the minimum standards for labor and human rights (minimum safeguards) are complied with.

Procedure Uzin Utz

In order to ensure that the legal basis in connection with the implementation of the EU Taxonomy is up to date, com-prehensive research is carried out annually on the developments of the European Green Deal and the EU Taxonomy Regulation. The existing process is continuously reviewed and adapted to new regulatory requirements on the basis of adjustments and extensions to the taxonomy requirements and the implementation support provided. As part of the analysis of Uzin Utz's business activities, all business areas were systematically examined. This involved a detailed examination of the economic activities, which were then assigned to the corresponding NACE codes (EU classification of economic activities).

Assessment of taxonomy eligibility

For the 2024 financial year, Uzin Utz reports on taxonomy-eligible and taxonomy-aligned economic activities in accordance with the prescribed key figures of turnover, CapEx and OpEx. The process was carried out in two steps: First, the taxonomy-eligible economic activities were identified, then their taxonomy alignment was checked. As part of the detailed analysis, all economic activities defined by the EU Taxonomy were systematically checked and assigned for their relevance to the business activities of Uzin Utz. The screening was carried out separately for the key figures turnover, CapEx and OpEx in order to ensure a precise allocation and evaluation of the activities. The screening was carried out under the responsibility of the Controlling and Sustainability departments, which carried out the analysis and allocation in close cooperation with the relevant departments for the specific economic activities. This structured approach ensures that the reporting both complies with regulatory requirements and enables a complete presentation.

1. Revenue according to EU taxonomy

The EU Taxonomy Regulation defines a classification of environmentally sustainable economic activities. This classification is based on the statistical classification of economic activities in the EU (NACE codes).

The business model of the Uzin Utz Group represents a clear focus on the core competence of flooring with its eight product ranges. As a globally active full-service provider, Uzin Utz develops comprehensive system solutions and offers its customers a wide range of products, from construction chemical product systems and surface finishes to machines for floor treatment. The economic activities were therefore determined on the basis of the product categories and classified in the classification of economic sectors. These classifications are broken down in the following table.

The reference to the NACE economic activities in the EU Taxonomy Regulation is only indicative and not to be under-stood as complete. Therefore, an economic activity may correspond to the description of an activity and the technical screening criteria of the Delegated Act (see six annexes to Delegated Regulation (EU) 2021/2139, (EU) 2023/2485 and (EU) 2023/2486), even if the NACE sector of the economic activity is not explicitly listed in the corresponding annexes of the Delegated Regulation. For this reason, additional potentially applicable activities and their description in the Delegated Regulations (EU) 2021/2139, (EU) 2022/1214, (EU) 2023/2485 and (EU) 2023/2486 were examined in detail.

The examination of the economic activities defined in accordance with the EU Taxonomy has shown that taxonomy-eligible turnovers can be reported for Uzin Utz for the 2024 financial year. With the extension of the environmental targets in 2023, the turnovers of the electrical and electronic equipment product group, and thus the turnovers of the Wolff Business Unit (NACE code: 28.24 Manufacture of hand-held power tools), fall under the environmental target of the circular economy and are therefore classified as taxonomy-eligible. When recording the relevant electrical and electronic items, a clear separation was made from non-electrical appliances in order to ensure precise reporting.

In connection with the turnover stream from the sale of electrical and electronic items, further turnover streams were identified as relevant for Uzin Utz as part of the environmental objective of the circular economy. This assessment is based on the respective technical screening criteria, which explicitly take into account the NACE code 28.24 for the manufacture of hand-held power tools. The turnover streams classified as relevant for the audit include:

• Repair, remanufacturing and reconditioning (5.1)
• Sale of spare parts (5.2)
• Preparation for reuse of end-of-life products and product components (5.3)
• Sale of used goods (5.4)

In addition to the aforementioned turnover streams of the environmental objective of the circular economy, another relevant turnover stream was identified in the area of electricity generation by photovoltaic systems, which is as-signed to the first environmental objective of contributing climate change mitigation.

The currently low share of taxonomy-eligible turnovers in Uzin Utz's total sales should not be seen as an indicator that the company's economic activities are contrary to the EU's environmental objectives. One of the main reasons for this is that the majority of Uzin Utz's business areas are currently not included in the EU Taxonomy. The systematic review and evaluation of economic activities with regard to their taxonomy relevance are carried out as an integral part of a continuous process.

Taxonomy-eligible turnovers in the financial year amounted to EUR 19,599 thousand (22,023), which corresponds to a share of 4.1% (4.6) of the Group's total operating sales of EUR 476,034 thousand (479,337).

2. Investments - CapEx according to EU taxonomy

With its 30 fully consolidated production and sales companies, the globally active group of companies has a large number of capital expenditures. Taking into account cost-benefit aspects, a screening of the economic activities in relation to capital expenditures was carried out in accordance with the definition of the EU Taxonomy and a resulting catalog of the categories relevant to Uzin Utz.

With the help of the catalog, all companies analyzed and categorized their capital expenditures made in the period under review. Subsequently, all listed capital expenditures were checked again centrally to determine whether other capital expenditures not included in the catalog, which are part of the EU Taxonomy, were made.

The capital expenditures, as defined by the EU Taxonomy, are shown in the following list (the economic activity to be allocated to the investment in accordance with the EU Taxonomy is shown in brackets), provided they were capitalized in the fixed assets:

Capital expenditures related to taxonomy-aligned processes and economic activities

Environmental objective: Circular economy

• Capital expenditure in connection with the manufacture of electrical and electronic equipment
• Capital expenditure in connection with the repair, refurbishment and remanufacturing of electrical and electronic equipment (5.1)
• Capital expenditure related to the sale of spare parts for electrical and electronic equipment (5.2)
• Capital expenditures related to the preparation for reuse of end-of-life products and product components of electrical and electronic equipment (5.3)
• Capital expenditures in connection with the sale of used goods in the electrical and electronic equipment product group (5.4)

Capital expenditures in the acquisition of products for taxonomy-aligned economic activities

Environmental objectives: climate change mitigation and climate change adaptation

• Purchase of photovoltaic systems for power generation (4.1 Electricity generation using photovoltaic technology)
• Purchase of battery storage (4.10 Storage of electricity)
• Electric heat pumps (4.16 Installation and operation of electric heat pumps)
• Purchase and leasing of bicycles (6.4 Operation of personal mobility equipment, cycling logistics)
• Purchase and leasing of passenger cars (6.5 Transportation by motorcycles, passenger cars and light commercial vehicles)
• Purchase and leasing of trucks (6.6 Transportation of goods by road)
• Capital expenditure in new buildings (7.1 New construction)
• Building construction and civil engineering works (7.2 Renovation of existing buildings)
• Energy-efficient renovation of buildings (7.3 Installation, maintenance and repair of energy-efficient buildings)
• Installation of wall boxes for charging electric vehicles (7.4 Installation, maintenance and repair of charging stations for electric vehicles in buildings and in parking lots belonging to buildings)
• Capital expenditure in building automation (7.5 Installation, maintenance and repair of devices for measuring, regulating and controlling the overall energy efficiency of buildings)
• Photovoltaic/solar systems (7.6 Installation, maintenance and repair of renewable energy technologies)
• Purchase or leasing of buildings (7.7 Acquisition and ownership of buildings)
• Servers and data centers (8.1 Data processing, hosting and related activities)

The taxonomy-eligible capital expenditures of Uzin Utz were set in relation to the total capital expenditures in accordance with the EU Taxonomy Regulation. Total capital expenditures are the sum of additions to property, plant and equipment, intangible assets, right-of-use assets and additions to investment properties in accordance with IAS 40 (excluding income from revaluation).

Capital expenditures in accordance with the EU Taxonomy amounted to EUR 7,930 thousand (12,572) in the financial year, which corresponds to 38.0% (45.9) of total Group investments of EUR 20,895 thousand (27,388).

3. Operating expenses - OpEx according to EU taxonomy

The term OpEx in the definition of the EU Taxonomy does not take into account all operating expenditures of the Uzin Utz Group. Uzin Utz uses the nature of expense method. For this reason, the OpEx to be reported within the meaning of the EU Taxonomy were identified by evaluating G/L accounts. These are mainly development, maintenance and repair expenses as well as short-term leasing. The relevant operating expenditures were provided by each Group company via a data query, analyzed and evaluated centrally.

As a manufacturing and selling group of companies, the main cost drivers are the cost of materials (44.4% of total operating expenditures) for the production of products and the personnel costs (29.2% of total operating expenditures) incurred along the value chain from the manufacture to the sale of these products. Development, maintenance and repair costs as well as short-term leasing are therefore relatively low. The taxonomy-eligible OpEx is not determined due to the high procedural effort involved. Thus, the share of operating costs across all product ranges according to the EU Taxonomy is not significant compared to the total operating expenditures and Uzin Utz applies the simplification option according to the principle of materiality in accordance with the Delegated Regulation (EU) 2021/2178 Annex I 1.1.3.2.

Expenses in accordance with the EU Taxonomy amounted to EUR 21,469 thousand (19,139) in the financial year, which corresponds to a share of 4.9% (4.3) of the Group's total operating costs of EUR 440,897 thousand (450,325). The application of the simplification option results in the recognition of taxonomy-eligible operating expenditures in the amount of EUR 0 thousand (0).

Checking taxonomy alignment

1. Turnovers in accordance with the EU Taxonomy

The EU Taxonomy Regulation requires the fulfillment of specific technical screening criteria in order to report taxonomy-aligned turnover. These criteria are designed to demonstrate the significant contribution of an economic activity to one of the defined environmental objectives. For the assessment of technical alignment, the EU Taxonomy requires the following evidence, among others, in turnover streams relevant to Uzin Utz:

• Promoting durability and reparability: evidence that products are designed to have an extended useful life. This includes the modular design, the availability of spare parts and repair instructions as well as measures to support repairs and maintenance.
• Recyclability and reuse: Evidence that products are designed so that they can be easily disassembled and recycled at the end of their useful life. The design should promote the separability of materials and avoid the use of components that make recycling more difficult.
• Sustainable sourcing and supply chain: Ensure that raw materials and materials are sourced in accordance with recognized environmental standards and sustainable practices to ensure an environmentally responsible value chain.

At present, we do not have all the information and evidence required to make a complete and conclusive assessment of the alignment of our economic activities with the technical screening criteria. In particular, we lack detailed information on the technical specifications of individual processes and products as well as reliable data on compliance with specific threshold values. Without this evidence, we are currently unable to report any revenue as taxonomy-aligned.

2. Capital Expenditures according to EU Taxonomy

In accordance with the requirements of the EU Taxonomy Regulation, we have reviewed the taxonomy-eligible capital expenditures (CapEx) for the reporting period to assess their taxonomy alignment. Our capital expenditures include projects in areas such as photovoltaic systems and an electrified vehicle fleet that could potentially contribute to the environmental objectives of the EU Taxonomy. To assess taxonomy alignment, efforts were made to obtain appropriate certificates and evidence of compliance with the DNSH criteria and the technical screening criteria from our suppliers. These should prove that the underlying economic activities meet the requirements of the alignment assessment in accordance with the EU Taxonomy. Despite intensive efforts, it was only possible to obtain the relevant confirmations of compliance with the alignment criteria from suppliers in isolated cases.

3. Operating Expenditures according to EU Taxonomy

In the case of operating expenditures (OpEx), the simplification option in accordance with the Delegated Regulation (EU) 2021/2178 Annex I 1.1.3.2 is used in the context of materiality when reporting taxonomy-eligible and taxonomy-aligned economic activities. For this reason, a separate standard table is not shown for OpEx.

Ulm, March 27, 2025

The Executive Board