Annual report 2025

• For 2025, Borgestad Group delivered an ordinary and adjusted^{1 Adjusted EBITDA, EBIT and result before tax exclude accrued cost for lay-off compensations and write down of ERP system and goodwill, total adjustments at EBIT level of MNOK 26.8 for full year 2025. Alternative performance measures (APMs) are described in the appendices Alternative performance measures.} result before tax of MNOK 23.9 and MNOK 50.7 respectively, compared to MNOK 82.3 and adjusted MNOK 76.8 respectively in 2024.
• Höganäs Borgestad Group closed two acquisitions in 2025, Emcotech AB and Norsk Ildfast Gjenvinning Drift AS.
• As of December 31, 2025, Agora Bytom had an occupancy rate of 96.2 percent based on signed leases, an increase of 1.7 percentage points since December 31, 2024.
• In light of developments in recent years, Borgestad has distributed a dividend of MNOK 28.0 in June 2025 and a dividend of MNOK 17.5 in March 2026.

Alternative performance measures (APMs) are described in the appendices Alternative performance measures

Borgestad ASA aims to ensure sound corporate governance that supports long-term value creation, confidence in the capital markets and responsible business conduct. The Board of Directors bases its work on the principles set out in NUES 2025, including requirements for transparency, equal treatment of shareholders, a clear division of roles and responsibilities, and sound risk management.

The company largely complies with the Code. The following deviations apply:

• NUES item 6 Independent chairing of the general meeting: In accordance with the company’s Articles of Association, the general meeting is chaired by the Chair of the Board or a person appointed by the Board.
• NUES item 7 Guidelines for the work of the nomination committee adopted by the general meeting: The mandate of the nomination committee follows from the Articles of Association and is not separately adopted by the general meeting.

The company's activities are defined in § 3 of the articles of association, where the company's purpose is to carry out investment and management activities, including participation in other companies, acquisition of shares and other company shares, as well as acquisition and operation of real estate, as well as all associated activities.

The Board prepares targets, strategies and risk profiles that support value creation for shareholders in a sustainable way. The company's activities are defined in § 3 of the articles of association, where the company's purpose is to carry out investment and management activities, including participation in other companies, acquisition of shares and other company shares, as well as acquisition and operation of real estate, as well as all associated activities.

In line with NUES 2025, the Board has established overall objectives and strategies that support long-term value creation, including considerations related to sustainability, financial robustness and risk profile.

The company has no restrictions related to ownership, purchase, sale or voting rights. All shares carry equal rights, and the company practices the principle of equal treatment of shareholders in all material matters. This includes equal rights in connection with any share capital increases, unless the Board has been granted an authority by the General Meeting to increase the share capital and elects to make use of such authority. Any deviation from the pre emptive rights of existing shareholders will be justified and explained in accordance with applicable legislation and the principles of good corporate governance.

The Board places great emphasis on maintaining transparent and fair processes for all shareholders. The company publishes all share price sensitive information through the Oslo Stock Exchange’s news distribution system and simultaneously on the company’s website, ensuring equal access to relevant information for all market participants. Borgestad seeks to maintain an open and predictable dialogue with the financial markets, and the company strives to ensure that information disclosed is accurate, timely and consistent.

The company has established guidelines for handling transactions with related parties to safeguard the interests of all shareholders. The Board and management will exercise particular care in transactions between the company and shareholders, or other parties with special interests, to avoid conflicts of interest and to ensure that such transactions are conducted on market terms and in a transparent manner. These principles support the overarching objective of protecting shareholder value and maintaining confidence in the company’s governance practices.

The company has no restrictions on the right to own, trade or exercise voting rights for shares in the company. All shares carry equal rights, and the company practices equal treatment of shareholders in accordance with applicable laws and the principles of good corporate governance. The company seeks to ensure that all shareholders have equal access to information and opportunities, and that no limitations or discriminatory practices are applied with regard to ownership structure or participation in the company’s decision-making processes.

The Board makes arrangements for shareholders to participate in the company's general meeting. In accordance with § 6 of the articles of association, the General Meeting is chaired by the Chairman of the Board or the person he appoints. The recommendation on independent meeting management of the General Meeting is therefore not relevant because it conflicts with the company's articles of association.

The Board ensures:

a. The documents are detailed and precise enough for the shareholders to take a position on all matters to be processed.

b. The registration deadline is set as close to the meeting as possible.

c. The Board and Chairman of the Election Committee can participate in the General Meeting.

Documents relating to matters to be dealt with at the General Meeting, including documents which according to law must be included in or attached to the notice, do not need to be sent to the shareholders if the documents are made available on the company's website. A shareholder can still demand to be sent documents that relate to matters for the General Meeting.

Shareholders who wish to attend the General Meeting must notify the company of this within a specific deadline which cannot expire earlier than two days before the General Meeting is held.

Shareholders can cast their vote digital in a period before the General Meeting, in accordance with NUES 2025. The shareholders are able to vote in each individual matter, including voting for individual candidates in elections.

The company has its own Election Committee, as stipulated in §8 of the Articles of Association. The Election Committee represents a deviation from the NUES recommendations, as the Election Committee members must be shareholders and the General Meeting does not provide specific guidelines or limitations for the Committee’s work. The General Meeting elects the Committee’s chair and member and determines the Committee’s remuneration.

Neither members of the Board nor members of the executive management serve on the Election Committee, ensuring independence and avoiding conflicts of interest. The Committee’s mandate is to propose candidates for the Board and the Election Committee, as well as to recommend remuneration levels. In carrying out its work, the Committee seeks to secure a Board composition that reflects relevant competence, experience, and diversity, and that supports the company’s long-term strategy and sound corporate governance practices.

The Board currently consists of five shareholder-elected board members. The Board is elected for a period of one year. According to § 5 of the articles of association, the number of board members can vary between three and six, in addition up to two deputy members can be elected. The board chooses its own leader. The Board's composition and shareholdings appear in Note 5. It is a goal that the Board should have a balanced composition that takes into account competence, experience and relevant background for the company's operations. It is also desirable that the composition of the Board reflects both the company's ownership structure and the need for neutral, independent representatives without specific ownership affiliations.

All board members are independent of the day-to-day management. Chairman Glen Ole Rødland, through the company Corona Maritime AS, has a consultancy agreement with the company for ongoing assistance and as discussion partner for the CEO. None of the other board members have business relations with the company.

The instructions for the Board and the day-to-day management have a particular emphasis on a clear internal distribution of responsibilities and tasks, as well to outline how the Board and the day-to-day management shall process agreements with related parties. In 2025, there were no transactions with related parties, apart from payment of salaries, consultancy fees, board fees and dividend.

The Board evaluates its work and expertise annually. The Board ensures that the board members and senior employees make the company aware of any significant interests they may have in matters that the Board must deal with. An Audit Committee consisting of three board members has been established, in accordance with NUES 2025.

It has been assessed and concluded that the audit committee fulfils recommendations and legal requirements regarding the independence of the Group. According to policy for the Audit Committee, the Committee is a preparatory and advisory body to the Board of Directors and assists the Board in its oversight of financial reporting, internal control, and risk management. The Committee monitors the process for financial reporting and reviews significant accounting matters, key accounting estimates, and changes in accounting principles. It also oversees the effectiveness of the Company’s internal control and risk management systems. Furthermore, the Audit Committee maintains close dialogue with the external auditor, including assessing the auditor’s independence, reviewing the scope and results of the statutory audit, and evaluating the provision of non-audit services. The Committee prepares recommendations to the Board regarding the appointment and remuneration of the external auditor and regularly reports to the Board on its work and key findings.

The Board has established a remuneration committee, established in 2024. The remuneration committee consist of two board members. The Remuneration Committee is a preparatory and advisory body to the Board of Directors and assists the Board in matters relating to remuneration and incentive schemes for senior executives. The Committee’s main objective is to ensure that remuneration structures support the Company’s strategy, long-term value creation, and sustainable performance and alignment with shareholder interests. The Committee prepares and reviews the Company’s guidelines for executive remuneration, including fixed and variable remuneration, pension arrangements, and other benefits, and ensures compliance with applicable legislation and best practice. It evaluates the total remuneration package of senior executives, including the Chief Executive Officer, and assesses whether performance-based remuneration is appropriately linked to predefined and measurable performance criteria.

The Board receives ongoing reports that describe developments in the company, such as rental and monthly reports for Agora Bytom, as well as accounting and profit reports with an overview of the short-term and long-term order backlog for the refractory segment. In 2025, ten board meetings have been held in the company, corresponding to seven meetings in 2024. Information about the various board members' attendance at meetings can be found in the minutes from each board meeting.

The company has established internal control procedures and appropriate systems for risk management that are tailored to the scope and nature of its operations. These systems are designed to ensure reliable financial reporting, compliance with applicable laws and regulations, and effective management of operational and strategic risks. The Board regularly reviews the company’s most significant risk areas and the effectiveness of internal control measures. This includes an assessment of financial risk, operational risk, market risk and other factors that may influence the company’s performance or financial position.

Further information on financial risk management is provided in the Board of Directors’ Report and in Note 21 to the consolidated financial statements. Additional references to operational and strategic risk factors can be found throughout the annual report. The Board considers the company’s risk management and internal control systems to be appropriate for the company’s activities and will continue to monitor and further develop these processes to support sustainable value creation.

The remuneration to the Board reflects the board's responsibility, expertise, time spent and the complexity of the business. The Board fees and shareholdings appear in Note 5 in the consolidated accounts. Performance-based remuneration is not used. The board members have no option schemes and do not carry out special tasks for the company unless otherwise separately agreed. Such remuneration will be approved by the general meeting. Board members are encouraged to own shares in the company.

The Board prepares guidelines for the remuneration of senior management in accordance with applicable legislation. The Board’s statement on executive remuneration is presented as a separate document to the General Meeting and is available on the company’s website. The Board determines the CEO’s remuneration in a Board meeting. Historically, adjustments to the CEO’s remuneration have reflected general wage developments in Norway as well as the company’s performance.

The CEO does not participate in option schemes but may be eligible for a bonus. Any bonus scheme must include a clear link between the performance-based criteria and the company’s goals and strategies. As a general principle, the bonus is capped at a maximum of 80 percent of annual basic salary. Further details on executive remuneration are provided in Note 5 of the consolidated financial statements.

The Board establishes guidelines for the company's reporting of financial and other information based on transparency and considering the requirement for equal treatment of the participants in the securities market. The company reports information and financial figures in accordance with the Oslo Stock Exchange regulations. Responsibility for Investor Relations and reporting of regulatory information is assigned to the managing director, who has the opportunity to delegate this responsibility. The Board has established guidelines for the company's contact with shareholders outside the General Meeting.

The Board has a pragmatic attitude in relation to a possible take-over situation. The Board's main responsibility in such a case will be to maximize shareholder value for all shareholders and at the same time look after the interests of the employees, and other stakeholders.

The Board ensures that each year the auditor presents the main features for carrying out the audit work, reviews any significant changes in the company's accounting principles, key aspects of the audit, assessment of significant accounting estimates and all significant matters where there has been disagreement between the auditor and the administration. BDO AS, through partner and auditor Yngve Gjethammer, receives a copy of all board documents. The auditor's remuneration divided between audit and other services is explained as a separate item at the general meeting and in Note 5 in the consolidated accounts. The Board and the Audit Committee have several meetings with the auditor throughout the year. In the meetings between the Board and or the Audit Committee and the auditor, the company's internal control is discussed, as well as other significant accounting items.

The refractory segment constitutes the Group’s largest business area measured by revenue and remains core to Borgestad ASA’s long-term industrial profile. The segment is operated through Höganäs Borgestad, a well-established refractory producer and installation partner with a strong presence in the Nordic region and selected international markets. The company supplies high-quality refractory products and turnkey installation services to a broad industrial customer base.

Höganäs Borgestad delivers a comprehensive range of refractory materials, solutions and services for high-temperature industrial processes. The offer includes monolithic, bricks, precast shapes, insulation materials and customized refractory solutions, supported by engineering, technical advisory services and installation expertise. The company serves key industries such as cement and lime, steel, aluminum, ferroalloys, energy, and waste-to-energy.

The combination of production competence, application knowhow and a dedicated installation operation provides customers with integrated solutions that cover the full lifecycle of refractory use, from design and material selection to installation, maintenance and follow up.

The Group operates its monolithic production facility in Bjuv, Sweden. Capacity utilization and production efficiency remained important priorities in 2025, supported by continuous improvement initiatives and close cooperation between sales, engineering and operations teams.

Höganäs Borgestad maintains a well-established supply chain and distribution network, ensuring reliable delivery of materials to customers in the Nordics. Höganäs Borgestad balances in-house production with strategic sourcing of complementary materials from long-term partners.

Market conditions in 2025 varied across industries, influenced by global economic uncertainty, energy prices and fluctuations in industrial production. While some customer segments experienced lower activity, Höganäs Borgestad maintained a stable order intake through longstanding customer relationships, a diversified customer portfolio and strong service offerings.

The refractory segment is essential to Borgestad’s industrial footprint and represents a robust platform for future value creation. Höganäs Borgestad’s strong market position, technical expertise and integrated service model provides competitive advantages that support stable revenue generation and long-term strategic potential. The company will continue to prioritize operational excellence, customer-focused innovation and disciplined cost management to strengthen its position in the years ahead.

Agora Bytom shopping center in Poland is the Group’s largest investment, representing more than half of the Group’s total asset value. The center has a gross area of 52,000 sqm, and on December 31 the total leasable area stood at 33,870 sqm. The property also includes a stand-alone parking facility with 820 spaces, conveniently connected to the main building.

Centrally located in the Silesian region, Agora Bytom maintains a strong market position within its primary catchment area. The center offers a broad and balanced tenant mix, comprising major international retail chains as well as established Polish brands. In addition, the center features eight cinema halls, a fitness center, and a wide selection of cafés and food outlets, strengthening its role as both a commercial and social hub in the region.

Agora Bytom is operated by an in-house management team employed directly by the Group. The internal organization ensures high operational stability and effective coordination across leasing, tenant relations, marketing, facility management and strategic development initiatives. The in-house model provides strong local presence, close market insight, and increased agility in responding to changing consumer patterns and tenant needs.

The team has continued to strengthen the center’s operating performance through proactive leasing efforts, targeted marketing activities, strong cost control and efficient cooperation with tenants. Maintaining high occupancy levels and ensuring an attractive tenant mix remain key priorities.

Agora Bytom continues to maintain a strong position in the local market, with a consistently high occupancy rate. The centre remains committed to ongoing improvements and actively engages in the rental market, currently negotiating with several potential tenants, underscoring its focus on expansion and development.

As of December 31, 2025, the WAULT² Weighted average unexpired lease term. stood at 4.03 years by area and 3.79 years by income. As of December 31, 2025, occupancy based on signed leases was at 96.2 percent, an increase of 1.7 percent since December 31, 2024.

Agora Bytom in 2025 had an active period of closing new lease agreements. During 2025, activity in the center has been extensive, particularly in relation to changes of tenants. Some of these changes have not yet been completed and are expected to be finalized during the first quarter of 2026. The new tenants are expected to improve the commercial attractiveness of Agora Bytom

Agora Bytom has over recent periods shown strong development in increasing the occupancy rate and has now nearly fully leased out the centre. With this solid occupancy as a foundation, the focus is shifting toward renegotiating or replacing lower-yielding leases to increase the actual rent per square metre per month, while continuing ongoing efforts to enhance the centre’s commercial attractiveness. A combination of high occupancy, improved rent levels, and increased attractiveness is considered critical for any potential future increase in the value of the property.

The retail market in Poland has remained dynamic, influenced by evolving consumer behavior, economic trends and competitive pressure from both physical retail and online channels. Despite this, Agora Bytom has maintained a stable market position thanks to its central location, strong tenant offering and role as a multi-purpose destination.

The Group monitors market developments closely and assesses opportunities for value-enhancing measures, including upgrades, concept renewals and improved customer experiences.

The Board of Directors recognizes the ongoing uncertainty in the global landscape, driven by multiple conflicts and the risk of trade tensions between countries and regions. While the direct impact of potential trade barriers for Borgestad is considered limited, there could be indirect effects – particularly if customers of Höganäs Borgestad Group face challenges due to reduced demand or unfavourable tariffs. This, in turn, could temporarily dampen demand for refractory products, services, and installations. However, the refractory industry has historically shown resilience during such fluctuations, often followed by catch-up effects after periods of slowdown. The Board and management continue to monitor developments closely and are prepared to take necessary measures if required.

The Polish economic growth has been resilient and above the EU average growth despite the trade turmoil and the ongoing war in neighbouring Ukraine. The Board of Directors expects continued positive development in consumer spending in Polen, and this should lead to better performance for the shopping center in Polen.  

Looking ahead, the Board expects the Group to deliver improved underlying results and stronger cash flow, with continued positive margin development in both the refractory and property segments over time. However, progress may vary quarter by quarter due to seasonality, cyclical swings, one-off items, and variations in project activity.

Borgestad ASA will continue to evaluate strategic opportunities, including transformational M&A initiatives and potential liquidity events. During 2025, Höganäs Borgestad completed the acquisitions of Emcotech AB in Sweden and Norsk Ildfast Gjenvinning Drift AS in Norway.

Borgestad Group’s 2025 Sustainability Statement has been prepared in accordance with both the basic and comprehensive modules of EFRAG’s voluntary reporting standard for non-listed SMEs (VSME) and the Norwegian Accounting Act.

The Group’s sustainability work extends beyond the formal requirements of the VSME standard. In addition to the core elements, Borgestad Group has carried out a double materiality assessment, a climate risk assessment, and a nature risk assessment. Findings from these assessments have been incorporated into the report where relevant.

Certain VSME disclosures, such as water and remuneration, were omitted as they are assessed as non-material in the double materiality assessment. Additionally, Borgestad Group has not included information on its material impacts regarding local communities as VSME does not require reporting on this topic. Conversely, some sections have been expanded beyond the VSME for added transparency, drawing on ESRS³ European Sustainability Reporting Standards guidance for governance, strategy, double materiality, and topics including climate change, biodiversity, resource use and circular economy, own workforce, and value chain workers.

The report follows the time horizons defined in ESRS: short-term refers to the reporting period, medium-term to one to five years, and long-term to more than five years. The sustainability report is prepared on the same consolidated basis as the financial statements, and a complete list of reporting entities is provided in the appendix.

The Board of Directors serves as Borgestad Group’s highest governing and supervisory body. Its key responsibilities include ensuring long-term sustainable growth, overseeing risk management and internal controls, developing and implementing the company’s strategy, monitoring performance and safeguarding and strengthening the Borgestad Group brand.

The Board holds the ultimate responsibility for sustainability-related reporting in line with applicable legislation. It addresses sustainability impacts, risks, and opportunities as an integral part of the company’s strategy, operations, and risk management framework.

Borgestad Group’s Board of Directors consists of five members—three men and two women. The Board’s competence in sustainability matters is strengthened through continuous training and professional experience. One member has completed the Norwegian Institute of Public Accountants’ Academy for Sustainability Reporting, while several members also serve on boards of listed companies, providing them with valuable experience in managing sustainability issues at board level.

Audit committee

The Board has established an Audit Committee to oversee and evaluate specific sustainability-related issues and to prepare matters for discussion and decision in Board meetings. The Audit Committee comprises three Board members, including two women.

The Committee plays a key role in promoting sound corporate governance through its involvement in risk assessments, internal control, corporate reporting, and the audit process. It reviews significant financial reporting issues and judgements made in connection with the preparation of the Group’s financial statements, interim reports, and related formal disclosures, including sustainability reporting.

Remuneration committee

The Board has established a Remuneration Committee which is responsible for salaries and other forms of compensation for the Group‘s executives, including the CEO of Borgestad ASA and the senior management team. The Remuneration Committee consists of two of the members of the Board of Directors.

Management

Borgestad ASA is an investment company with two core verticals: Agora Bytom and Höganäs Borgestad. Höganäs Borgestad has its own management group which, together with the CEO of Borgestad ASA, is responsible for the day-to-day operations and for executing the business plans derived from the overall strategy established by the Board of Directors. The management group oversees key operational and strategic areas, including monitoring financial and operational performance, budgeting, evaluating new business opportunities, marketing, technology development, and the recruitment and retention of employees.

For Agora Bytom, Borgestad ASA exercises oversight and strategic follow-up through direct involvement by the CEO of Borgestad ASA. The CEO maintains close and continuous dialogue with the local operational representative responsible for the property’s daily follow-up. This structure ensures effective monitoring, alignment with the Group’s strategic priorities, and consistent operational execution, while reflecting the asset’s organizational structure.

The management further handles matters related to remuneration, prioritisation and allocation of resources, as well as investment decisions and the management of the companies’ risk profile. The management is also responsible for implementing the decisions and directives issued by the Board of Directors. The management consists of nine members, including one woman. The CEO of Borgestad ASA is the highest responsible for sustainability-related matters under the Board of Directors.

Borgestad Group’s key operations include the Agora Bytom shopping center in Poland, which serves a broad consumer base, and Höganäs Borgestad, a provider of refractory products and services essential to high-temperature industrial processes across the Nordic region.

The Group’s strategy, through Höganäs Borgestad, is to deliver effective high-temperature solutions that enhance customer productivity and competitiveness in key industries, while positioning itself as a supplier of high-quality products that contribute to reducing end users’ energy consumption. At the same time, the Group aims to strengthen its market presence, improve profitability, and optimize operational efficiency.

Borgestad Group’s value chain encompasses a range of activities, including the extraction of raw materials such as bauxite, andalusite, and chamotte, manufacturing of refractory traded goods, road and sea transportation, support functions such as maintenance, cleaning, and IT, refractory production, installation, and repairs, real estate activities, and waste management.

Although Höganäs Borgestad is a relatively small player in the global refractory industry and does not own or operate any mining or quarrying sites where raw materials are sourced, the Borgestad Group recognizes that many of its most significant sustainability impacts and risks are linked to its upstream refractory value chain.

Interests and views of stakeholder

The objective of Borgestad Group’s stakeholder dialogue is to map the direct and indirect impact the Group has on the stakeholder groups or other sustainability-related areas that the stakeholders have knowledge about, whether it be climate, nature, customers or suppliers. Borgestad Group also wants to map the risks and opportunities internal and external stakeholders believe are material to manage.

Borgestad Group’s stakeholder groups are employees, customers, suppliers, workers in the value chain, local communities, nature, loan providers, investors, and the Board. The Group engages with its stakeholders through several different channels such as worker representatives, employee satisfaction surveys, supplier due diligence assessments, project collaborations, and meetings.

Impact, risk and opportunity management

During 2024 and the beginning of 2025, the Group conducted a double materiality assessment following EFRAG’s guidelines to identify impacts, risks and opportunities (IROs). The results show that Borgestad Group’s material IROs relate to climate change and resource use, own workforce, workers in the value chain, affected communities and business conduct. The Group has established targets to manage most of these topics, and details can be found in the Climate change-, Resource use and Circular economy-, Own workforce-, Workers in the value chain- and Governance-chapters.

To operationalise the work to map material IROs, Borgestad Group has used the four-step process explained below.

1. Understand

Borgestad Group mapped its activities, operations, and business relationships to better understand its context. This included describing the value chain, identifying stakeholders, and defining the scope of analysis. These insights clarified which activities and operations are most relevant for assessing actual or potential impacts on climate, environment, social, and governance topics.

2. Identify

To identify, Borgestad Group mapped concrete IROs related to climate and environment, social and governance topics. The goal of this step was to reach a long-list of IROs which indicate how these originate from the Group’s own operations and business relationships.

Borgestad Group engaged stakeholders and performed internal and external interviews. Thirteen stakeholders were interviewed, of which eleven internal spanning the board, management, procurement and employees. Additionally, one client and one bank, with which Höganäs Borgestad and Borgestad ASA have a professional relationship, were interviewed. The interviews were structured around questions regarding the stakeholders’ perception of how Borgestad Group creates ESG-related positive and negative impacts, risks and opportunities through its products and services. The interviews were adjusted according to each stakeholder, and they provided perspectives from directly affected parties such as own employees.

In addition to stakeholder dialogue, internal policies and reports were examined, and media searches and benchmarking exercises were conducted. Relevant industry reports and credible proxy sources were also examined to identify relevant IROs. This was particularly important to gain insights into nature, workers in the value chain and local communities which Borgestad Group did not directly engage with. Insights from the Group’s climate risk assessment were also incorporated into the assessment.

The third step of the DMA entailed assessing the materiality of the identified IROs through a scoring system. The goal of this step was to prioritize IROs and conclude on a shortlist illustrating Borgestad Group’s most material IROs across climate and environment, social and governance topics. This work followed the EFRAG recommendations and assessed impact materiality through severity and likelihood, and financial materiality through magnitude of financial effects and likelihood. Borgestad Group considered a five-point scale to assess each relevant parameter for each IRO. Specific assessments of potentially negative impacts on human rights have been conducted to ensure that severity takes precedence over likelihood in such cases.

To prioritize material IROs, multiple workshops with a diverse group of internal stakeholders were conducted to ensure commitment and adjust quantitative scoring where needed. After the workshops, an overall qualitative assessment of the preliminary shortlist was conducted to ensure that the list reflected the Group’s business activities.

4. Validate

The fourth step entailed validating the results from the DMA. This included a final decision on threshold values concluding that IROs with a materiality score of 3.2 or above would be considered material. The final list of material IROs was approved by the board.

Table 2 illustrates Borgestad Group’s material sustainability topics.

In 2025, Borgestad Group also completed its nature risk assessment, providing deeper insight into its impacts, dependencies, risks, and opportunities related to nature. As a result, the initial IROs for Biodiversity and Ecosystems were refined to better capture the Group’s most significant interactions with nature. Consequently, Pollution is no longer a standalone material topic, as its IROs are now fully integrated into Biodiversity and Ecosystems.

Table 1: Borgestad Group’s material impacts, risks and opportunities

Environmental information

Climate Change

Reducing greenhouse gas (GHG) emissions across Borgestad Group’s operations and value chain is a central element of the Group’s strategy. Borgestad Group, through Höganäs Borgestad, continuously pursues energy-efficient solutions and explores innovative methods for producing refractory products. Nevertheless, as indicated by the results of the double materiality assessment, the Group’s activities - both direct and indirect - have material impacts on climate change.

Borgestad Group conducted a comprehensive climate risk assessment to understand physical and transition risks linked to climate change and the shift to a low-carbon economy. The assessment covered Borgestad Group’s own operations and the value chain, focusing on production sites, transport routes, and raw material sourcing, given Höganäs Borgestad’s reliance on few global suppliers.

Two IPCC AR6⁴ Intergovernmental Panel on Climate Change’s Sixth Assessment Report-based scenarios guided the analysis, reflecting both sustainable development and growing geopolitical tensions. SSP1-2.6 (Sustainable Development) was chosen as the low-emission scenario, as this was considered the most realistic pathway for a low-carbon future despite global temperatures nearing 1.5°C above pre-industrial levels. SSP3-7.0 (Regional Rivalry) served as the high-emission scenario, as it is viewed to be increasingly relevant given weakened international cooperation following events such as the COVID-19 pandemic, the war in Ukraine, and ongoing trade tensions.

Climate-related risks and opportunities were identified using the TCFD⁵ Task Force on Climate-related Financial Disclosures framework. A combination of benchmarking, research, and stakeholder interviews was conducted, supplemented by using Climcycle, a system-based solution for identifying site-specific hazards across short-, medium and long-term time-horizons.

Following the initial identification phase, workshops were held to deepen the understanding of potential consequences and to evaluate each identified risk and opportunity in terms of likelihood and expected financial impact. Likelihood was classified as low, medium, or high, while financial magnitude was assessed as low (1–3% of EBITDA), medium (3–6% of EBITDA), or high (above 6% of EBITDA).

Results show exposure to physical and transition risks in operations and upstream supply chain, plus one energy-related opportunity. Additional opportunities for recycled materials are addressed under Resource Use and Circular Economy.

Policies related to climate change mitigation and adaptation

Höganäs Borgestad’s Ethical Code of Conduct indirectly addresses climate change through a general commitment to protect the environment and minimize negative impacts. Further, Höganäs Borgestad’s environmental policy emphasizes continuous improvement in resource and energy efficiency across operations.

The Borgestad Group complies with all applicable national and international environmental laws and regulations and ensures that relevant emission permits are obtained. Höganäs Borgestad’s management systems are certified according to ISO 9001, ISO 14001, and ISO 45001, providing a structured framework for environmental and climate-related performance. Höganäs Borgestad’s Norwegian operations in Skien are also certified as an Eco-Lighthouse, further supporting systematic environmental management and improvement.

Practices related to climate change mitigation and adaptation

Borgestad Group does not yet have a formal transition plan for climate change mitigation. However, the Group has implemented, and will continue to implement, several measures to reduce emissions, mitigate risks, and capture opportunities related to the low-carbon transition

Energy management

In its own operations, Borgestad Group, through Höganäs Borgestad, focuses on improving energy efficiency and reducing fossil fuel use. At Höganäs Borgestad’s refractory plant in Bjuv, energy management efforts include operating the smaller, more energy-efficient kiln more frequently than the larger one, updating shutdown routines for press and crush and switching to LED lighting. Höganäs Borgestad will also explore the potential to replace diesel with HVO fuel in its vehicle fleet, and switch to electric vehicles when current vehicles have reached end-of-life.

To prepare for the implementation of the revised Energy Efficiency Directive⁶ EU/2023/1791 in Sweden, Höganäs Borgestad is also taking a structured approach to deepen its understanding of energy consumption. Höganäs Borgestad maps areas where energy use can be measured to prioritize the most relevant metrics. This approach will enable Höganäs Borgestad to collect accurate data and identify opportunities for improvement.

Within the value chain, Höganäs Borgestad works continuously to select transport suppliers that can use rail where feasible. A recent example is the transportation of refractory bricks for a large customer from Spain to Kiruna, where a significant portion of the transport is carried out by train - resulting in lower emissions compared to equivalent road transport.

Höganäs Borgestad has invested in a new drying unit⁷ Read more in Circular Economy and Resource Use to be installed and operational in Bjuv in early 2026. This will enable Höganäs Borgestad to increase the share of recycled materials in its products as secondary materials can be dried directly onsite. As part of this initiative, Höganäs Borgestad conducted a project in 2025 to map and calculate the emission intensity⁸ Read more in Circular Economy and Resource Use of all products produced in Bjuv. This provides a solid foundation for assessing how material composition and rate of recycled material impact the environmental footprint of the different products.

Risk mitigation

Following the climate risk assessment, Höganäs Borgestad has integrated climate-related considerations into its supplier screening and selection processes. Höganäs Borgestad also seeks to diversify its supplier portfolio to reduce exposure to physical climate risks and strengthen overall supply chain resilience. Increasing the use of recycled materials is another key measure that mitigates vulnerability to value chain disruptions identified in the climate risk assessment.

Going forward, Höganäs Borgestad will further explore additional risk mitigation measures, including broadening its supplier base, increasing storage capacity for slower-moving products, evaluating alternative raw materials for refractory production, and establishing access to credible embedded emissions data for its CBAM-related goods

Targets related to climate mitigation and adaptation

Borgestad Group has not yet implemented an overarching scienced-based emission reduction target and is not excluded from any EU reference benchmarks that are aligned with the Paris Agreement. During 2026, Höganäs Borgestad will set an absolute emission reduction target related to its scope 1 and 2 emissions, as well as transportation, and set a separate target for the emission intensity from produced products in Bjuv.

Höganäs Borgestad has developed a set of targets related to its energy management plan. These targets are summarized in the table below.

Greenhouse gas emissions

For the 2024 and 2025 climate accounts, Borgestad Group used the SaaS platform Morescope to calculate greenhouse gas emissions. The calculations are based on a combination of primary activity data and transaction data retrieved from group accounting systems. Transaction-based emissions are calculated using an environmentally extended multi-regional input–output (EE-MRIO) model, which estimates cradle-to-gate emissions across global supply chains based on sector and geographic location. The platform ensures that emissions are calculated using either activity data or transaction data, preventing double counting.

Emissions are consolidated according to the financial consolidation approach and reported in line with the GHG Protocol, covering scope 1, scope 2, and scope 3 emissions, and all gases included in the Kyoto Protocol. Conversion factors are primarily sourced from Defra (2025), EPA (2024), NVE (2024), Nowtricity (2024), and OECD datasets for transaction-based calculations.

Total emissions have increased by 2,6% from 2024 to 2025. The primary reasons for this are that gas consumption has increased for both Höganäs Borgestad AS and Höganäs Borgestad Production AB and there is improved data quality for activities such as fuel consumption, waste and business travel for most companies in the Group. Further, there have been updates and changes to the Morescope model, impacting Borgestad Group’s spend-based emissions related to purchased goods and services, capital goods and upstream leased assets. Compared to 2024, the model is now able to distinguish between operating expenses and capital expenses when transaction data is imported into Morescope, resulting in an improved allocation for emissions related to purchased goods and services, capital goods and upstream leased assets. The model can also more accurately identify the most appropriate sector for each supplier, resulting in higher emissions for some suppliers. These changes have thus resulted in a new allocation between scope 3.1, 3.2 and 3.8 and higher total emissions for the categories even though the transaction amounts have not increased from 2024 to 2025.

Scope 1 and 2

Emissions in scope 1 originate from fuel consumption in Group vehicles and stationary combustion of natural gas and LPG for production purposes. Emissions in scope 2 originate from electricity and district heating consumption in all Borgestad Group locations. 98,1% of the emissions are based on activity data.

Scope 3

9,1% of emissions in scope 3 are based on activity data, an increase from 6,6% in 2024. The main reason for this is that Höganäs Borgestad AS has collected activity data for several of the companies it purchases transportation services from, and more data will be collected 2026. Other categories that mainly consist of activity data are fuel- and energy-related activities, waste, and business travel.

Borgestad Group’s largest source of emissions is related to purchased goods and services and capital goods. The Group purchases raw materials and refractory products for millions of NOK each year which results in high emissions.

Table 2: Climate account 2024-2025

Relevant categories not included in the climate account

For the scope 3 categories where Borgestad Group has emission activities, but no transactions or activity data have been retrieved due to lack of data availability, the Group will work to make solid estimates in coming reporting periods to ensure a more complete climate account.

GHG intensity

Table 3 shows Borgestad Group’s GHG emission intensity based on total emissions per turnover. The reasons for the increase from 2024 to 2024 are that emissions have slightly increased while the turnover is reduced by approx. 3,7%.

Energy consumption

Table 4 shows the consumption of different energy sources originating from Borgestad Group’s direct scope 1 and indirect scope 2 energy-related activities in 2024 and 2025. Electricity consumption per energy source is calculated based on the location-based grid mixes in the different countries where Borgestad Group operates. The increase in energy consumption is the result of increased activity from 2024 to 2025.

Biodiversity and ecosystems

During the first half of 2025, Borgestad Group conducted its first nature risk assessment following the LEAP (Locate, Evaluate, Assess, Prepare) approach recommended by the TNFD⁹ Taskforce on Nature-related Financial Disclosures. The results indicate that the Group, through Höganäs Borgestad, has potential negative impacts on nature and biodiversity, is dependent on ecosystem services and is exposed to nature-related risks.

The LEAP approach provided the Group with a structured framework to identify, assess and respond to nature-related issues. The focus of the assessment was on the Locate, Evaluate and Assess phases. The Prepare phase is still in development as Höganäs Borgestad is yet to develop clear actions, targets and KPIs for nature and biodiversity.

Locate – Identify interfaces with nature

Borgestad Group started the assessment by mapping business activities across the value chain to identify activities with significant impact or dependency on nature using the ENCORE tool developed by Global Canopy and the UN Environment Programme. Further, the Group prioritized geographies and activities. The outcome provided a clear scope of priority locations and activities for further analysis.

Evaluate – Understand dependencies and impacts

In the Evaluate phase, each of the impacts and dependencies for the prioritized activities were measured using a set of quantitative indicators and thresholds. The indicators used were retrieved from open sources such as WWF’s Water and Biodiversity Risk Filters and through additional desktop research where relevant indicators were not available. The outcome was a quantitative rating of impacts, dependencies and geographic locations, where the material impacts and dependencies were used as input for the Assess phase.

Assess – Identify risks and opportunities

Building on the prior phase, Borgestad Group assessed how the material impacts and dependencies translate into risks and opportunities. As recommended by TNFD, the Group used two scenarios to understand potential future states. The Group decided to explore the Ahead of the game and Sand in the gears scenarios as they are sufficiently diverse and are comparable to the climate scenarios used in the climate risk assessment. Through interviews, workshops and desktop research, a long list of nature-related risks and opportunities was identified. Each nature-related issue was scored across likelihood and financial magnitude, and the outcome of the assessment was a shortlist of material risks that could significantly affect Borgestad Group’s, through Höganäs Borgestad, business performance.

Policies, practices and targets related to biodiversity

Höganäs Borgestad is in the early stages of developing a structured approach to biodiversity. A key finding is that nature-related risks largely overlap with climate risks, especially regarding raw material production stoppages relevant to Höganäs Borgestad. Measures already in place, such as integrating climate considerations into supplier screening, will consequently also help mitigate nature-related risks.

Borgestad Group aims to strengthen governance on nature by continuing to develop supplier policies, especially for raw material producers. Over time, this will include integrating nature-related considerations into procurement requirements and establishing more formalized practices and targets to manage biodiversity-related risks and opportunities.

Sites in or near biodiversity-sensitive areas

Borgestad Group has screened all sites owned, leased or managed through the World Database on Protected Areas to identify any sites located in or near biodiversity-sensitive areas. As per VSME, near is defined as an area that is (partially) overlapping or adjacent to a biodiversity sensitive area. Höganäs Borgestad’s warehouse in Luleå, measuring 0,2 hectares, is located adjacent to the Kallaxheden Nature Reserve, which is a forest area with rich wildlife. No other sites are located in or near biodiversity-sensitive areas as defined by the World Database on Protected Areas.

Resource use and circular economy

Borgestad Group, though Höganäs Borgestad, has identified negative impacts from upstream extraction of non-renewable raw materials and downstream waste handling. At the same time, opportunities exist to reduce emission costs and capitalizing the demand for low-carbon products.

Policies related to resource use and circular economy

Höganäs Borgestad’s Ethical Code of Conduct addresses resource use and circular economy indirectly through a general commitment to protect the environment and reduce negative impacts. The environmental policy further states that Höganäs Borgestad work continuously with increasing resource efficiency.

Practices related to resource use and circular economy

Borgestad Group, through Höganäs Borgestad, has developed three key actions intended to manage negative impacts related to resource use and circular economy whilst capitalizing on the identified opportunities. These actions will contribute to decreasing dependency on non-renewable raw materials, reduce waste and take advantage of market demand for environmentally friendly products.

Develop recycled products

Höganäs Borgestad aims to develop a range of products based on recycled materials to meet growing customer demand. This effort will refine existing products to meet the high standards of virgin-material alternatives, which are often prequalified and trusted.

In 2025, Höganäs Borgestad invested in a new drying unit that significantly improves the ability to reuse and recycle materials in production, thereby supporting its mission to develop a range of products based on recycled materials. Previously, Höganäs Borgestad relied on sourcing pre-dried materials from external suppliers, which limited flexibility and increased dependency on third parties. With the new installation, Höganäs Borgestad can process and dry materials internally, thereby broadening access to a wider range of recycled inputs and reducing exposure to market fluctuations in the availability of recycled materials.

This investment delivers both environmental and economic benefits. By facilitating greater integration of recycled materials into production, Höganäs Borgestad reduces its dependence on virgin resources, contributing to a lower carbon footprint and improved resource efficiency. At the same time, internal drying capabilities help reduce costs and strengthen resilience in a market where demand for recycled materials continues to grow. Furthermore, companies that supply materials for recycling through Höganäs Borgestad will benefit from reduced Scope 3 emissions, reinforcing shared sustainability objectives across the value chain.

Norsk ildfast Gjenvinning

As a further step in increasing Höganäs Borgestad’s focus on circular production, Höganäs Borgestad acquired Norsk Ildfast Gjenvinning - a company with over 30 years of experience in recycling refractory materials. The company is located in Mo i Rana, Norway, and will strengthen Höganäs Borgestad’s opportunities for improving the lifecycle impact of its products. With Norsk Ildfast Gjenvinning’s well-established setup, Höganäs Borgestad gains the capability to recycle short-travelled refractory materials in the northern parts of the Nordic. This will bring Höganäs Borgestad closer to achieving its sustainability goals and strengthen its circular offering.

Mapping of product composition

In 2025, Höganäs Borgestad launched a project to map the environmental footprint of its products by analysing material composition and related emissions. This includes detailed data on raw materials, transportation, and manufacturing processes, supplemented by third-party databases where supplier data is unavailable. By applying this mapping to all raw materials over one metric ton per product, and kiln-processed products, the company gains precise climate data at the product level.

These insights open opportunities to redesign products for greater circularity, such as substituting virgin materials with recycled alternatives, optimizing material compositions to reduce emissions, and improving durability for extended product life. Over time, this supports principles like resource efficiency, waste reduction, and closed-loop material flows. At the same time, this knowledge strengthens Höganäs Borgestad’s competitiveness in a market driven by transparency and sustainability, guiding strategic decisions, reinforcing its position in the circular economy, and meeting growing stakeholder expectations for climate accountability.

Partnerships for recycled materials

Höganäs Borgestad targets the establishment of multiple small scale production facilities for recycled products, strategically located at or near customer facilities to minimize transportation costs and environmental impact. These units, especially requested by several steel industry players, will handle specific volumes and product ranges, supported by the main production site. This approach offers low investment with solid returns and potential for installation services. Höganäs Borgestad will continue targeting new partnerships in 2026 and 2027.

Targets related to resource use and circular economy

Aligned with growing market demand for environmentally responsible products, Borgestad Group, through Höganäs Borgestad, is committed to increase its share of recycled materials in production. Per 2025, Höganäs Borgestad has achieved approximately 7,5 percent of recycled materials in production.

Reusing materials not only supports sustainability but can also be more cost-efficient, provided the recycled materials maintain the necessary product quality. This strategy offers both environmental and economic benefits, reinforcing Borgestad Group’s commitment to the circular economy while meeting customer expectations and regulatory pressures.

Resource inflows

Höganäs Borgestad’s own operations and upstream value chain utilise various resources, including raw materials essential for the refractory production processes. Höganäs Borgestad primarily uses andalusite, bauxite, mullite, chamotte and clay in its production process. The inflow of these materials is listed in table 5. The table does not include finished products for refractory operations or other types of products.

Of the 228 tonnes of biological materials used during the reporting period, Höganäs Borgestad sourced 213 tonnes - corresponding to 93,4 percent - from verified sustainable sources. All wooden pallets used for manufactured products are procured in accordance with recognized international forestry standards, including the Programme for the Endorsement of Forest Certification (PEFC) and the Forest Stewardship Council (FSC).

Resource outflows

Borgestad Group, through Höganäs Borgestad, produces refractory products, including refractory bricks which can be recycled. The process of recycling refractory bricks involves sorting and cleaning, crushing and grinding, stabilization and passivation, and processing to final specifications. The recycled material can be used in refractory monolithic and bricks.

In the design of refractory products, durability, longer product life and increased use of recycled raw materials are in focus. For refractory bricks, efforts also target lowering firing temperatures and reducing energy consumption in production

Refractory products cannot be repaired, but the design of the refractory lining and the quality used can make the lining last longer. Reducing the wear of the refractory lining reduces the need for changing it, which in turn results in a decrease in raw materials consumed.

Waste

For 2025, Borgestad Group collected waste management data reports for operations in Bjuv, Skien, Mosjøen, Tampere, Rajamäki, Trollhättan, Gävle, Luleå and Agora Bytom. Some waste management companies provide information about waste treatment, while for others, the Group has made assumption about the waste treatment methods.

Table 6 outlines the types of waste generated, along with details on diversion, recovery operations, and disposal methods, highlighting both hazardous and non-hazardous waste categories. The waste directed to disposal is mostly for energy recovery.

Borgestad Group operates in a complex environment that relies on global supply chains and has identified material potential negative impacts related to corruption and bribery through the double materiality assessment. The Group works to ensure compliance with relevant laws, regulations, and responsible business conduct, with a heightened focus in countries and jurisdictions with greater exposure to ethical business and human rights breaches.

Policies related to governance

Borgestad Group is committed to the highest standards of ethical conduct and integrity. This commitment is embodied in Höganäs Borgestad’s Ethical Code of Conduct, which applies to all employees and Board of Directors. The business operations adhere to applicable laws and regulations, and they are underpinned by a dedication to ethical, sustainable, and socially responsible practices.

Practices related to corruption and bribery

Borgestad Group’s actions related to governance are intended to manage its potential negative impacts. These particularly focus on measures to avoid incidents of corruption and bribery, as well as ensuring sufficient whistleblower protection.

Trainings and controls have been implemented to prevent and detect corruption and bribery throughout Group operations. Every individual representing Borgestad Group is entrusted with the responsibility to ensure that their actions are in full compliance with both legal standards and internal ethical requirements as detailed in the Ethical Code of Conduct. Non-compliance is treated as a serious violation and disciplinary matter.

Borgestad Group, through Höganäs Borgestad, relies on several suppliers of critical raw materials, many of whom operate in countries where the risk of corruption and bribery incidents is high. Höganäs Borgestad has a whistle-blower channel, and all employees have a right and duty to report any violations of the principles of the Ethical Code of Conduct. Employees are encouraged to express concerns or draw attention to actions with possible ethical implications.

Targets related to corruption and bribery

Borgestad Group has zero tolerance for any form of corruption and bribery, without exception, and there were no such incidents reported during 2025.

Transparacy Act:

Transparancy Act Borgestad ASA’s Transparency Act statement for 2025 will be published on www.borgestad.no on April 30, 2026.

Lysaker, April 29, 2026

Board of Directors, Borgestad ASA

The document is electronically signed