ALTRI, S.G.P.S., S.A. informs on: 2023 Annual Report and Accounts for consideration at the AGM to be held on May 3, 2024 - non-ESEF version

European single electronic reporting format (ESEF) and PDF version

This document is an unofficial and unaudited PDF version of the Annual Report 2023 of Altri, SGPS, S.A.. This version has been prepared for ease of use and does not contain ESEF information as specified in the Regulatory Technical Standards on ESEF (Delegated Regulation (EU) 2019/815). The official ESEF reporting package is available on the CMVM website and was submitted on 11 April 2024. This document is a true copy of the aforementioned financial information. In case of discrepancies between this version and the official ESEF package, the latter prevails.

ALTRI, SGPS, S.A.

Public Company

Head Office: Rua Manuel Pinto de Azevedo, 818 - Oporto

NIF 507 172 086

Share Capital: 25,641,459 Euro

Integrated Management Report

Corporate Governance Report

Consolidated Financial Statements and Accompanying Notes

Separate Financial Statements and Accompanying Notes

Statutory and Auditor's Report

Report and Opinion of the Statutory Audit Board

INTEGRATED MANAGEMENT REPORT

• Altri
• Performance
• Environment
• Social
• Governance
• Future

Proposal for the application of results

About the report

Annexes to the Integrated Management Report

ANNUAL

REPOR 2023

INTEGRATED

MANAGEMENT

REPORT

CORPORATE

GOVERNANCE

REPORT

CONSOLIDATED

FINANCIAL

STATEMENTS AND ACCOMPANYING NOTES

SEPARATE

FINANCIAL

STATEMENTS AND ACCOMPANYING NOTES

STATUTORY AND AUDITOR'S REPORT

REPORT AND

OPINION OF THE

STATUTORY AUDIT

BOARD

Table of contents

1. + Altri	7
1.1 Altri in 2023	7
1.2	Leadership Messages	10
1.3 This is Altri	14
1.3.1 Governance Structure	18
1.3.2 Value Creation Model	19
1.3.3 2030 Commitment	21
1.3.4 Stakeholders Engagement	26
1.3.5 2023 Materiality Assessment	28
2. + Performance	31
2.1	Market Context	31
2.1.1 Macroeconomic Framing	31
2.1.2 Pulp Market	33
2.2	Operational Performance	36
2.3	Financial Performance	43
2.4	Stock Market Evolution	45
2.5	European Union Taxonomy	47
2.6	Responsible Investment (Green Bonds)	49
3. + Environment	50
3.1	Forest Management	50
3.2	Biodiversity and Ecosystems	61
3.3	Climate Change and GHG Emissions	67
3.4	Renewable Energy and Energy Efficiency	74
3.5	Water Management	78
3.6	Waste Management and Circular Economy	83
4. + Social	87
4.1	Supply Chain	87
4.1.1 Human Rights in the Value Chain	92
4.2	Employees	94
4.2.1 Health, Welfare and Safety at Work	95
4.2.2 Talent Attraction and Retention	101
4.2.3 Diversity, Equity and Inclusion	106
4.3	Civil Society	107
4.3.1 Job Creation and Local Development	108
4.3.2 Noise, Odors and other Impacts at Local Level	111
5. + Governance	112
5.1	Governance Model	112
5.2	ESG Responsibilities	114
5.3	Risks and Opportunities	121
5.4	Fiscal Strategy	124

1. + Future

1. Innovation
2. Future perspectives

1. + Board of Directors Proposal for the Appropriation of Individual Net Profit
2. About the Report

Annexes to the Integrated Management Report

125

125

131

132

133

135

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1. + Altri

1.1 Altri in 2023

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ANNUAL	INTEGRATED	CORPORATE
REPORT	MANAGEMENT	GOVERNANCE
2023	REPORT	REPORT

INTEGRATED MANAGEMENT REPORT + ALTRI

Main Events

CONSOLIDATED

FINANCIAL

STATEMENTS AND ACCOMPANYING NOTES

SEPARATE

FINANCIAL

STATEMENTS AND ACCOMPANYING NOTES

STATUTORY AND AUDITOR'S REPORT

REPORT AND

OPINION OF THE

STATUTORY AUDIT

BOARD

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ANNUAL	INTEGRATED	CORPORATE
REPORT	MANAGEMENT	GOVERNANCE
2023	REPORT	REPORT

INTEGRATED MANAGEMENT REPORT + ALTRI

Ratings - ESG

CONSOLIDATED

FINANCIAL

STATEMENTS AND ACCOMPANYING NOTES

SEPARATE

FINANCIAL

STATEMENTS AND ACCOMPANYING NOTES

STATUTORY AND AUDITOR'S REPORT

REPORT AND

OPINION OF THE

STATUTORY AUDIT

BOARD

The ratings offer a clear view of companies' contributions to the economy, planet, and society, classifying them according to their level of preparation for the future and risk management. In 2023, the Altri Group was classified by several rating agencies as follows:

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			CONSOLIDATED	SEPARATE
ANNUAL	INTEGRATED	CORPORATE	FINANCIAL	FINANCIAL
REPORT	MANAGEMENT	GOVERNANCE	STATEMENTS AND	STATEMENTS AND
2023	REPORT	REPORT	ACCOMPANYING	ACCOMPANYING
			NOTES	NOTES

INTEGRATED MANAGEMENT REPORT + ALTRI

1.2 Leadership Messages

STATUTORY AND AUDITOR'S REPORT

REPORT AND

OPINION OF THE

STATUTORY AUDIT

BOARD

Alberto Castro

Chairman of the

Board of Directors

We are transparent, aware that this stimulates the will to change, to be better from the bottom perspective, and that good economic performance is not incompatible with a strategy in which the planet and people are, not just a responsibility, but a priority.

2023 was a challenging year

It is known that the cellulosic fiber industry is exposed to cyclical fluctuations, with greater or lesser regularity. That good or excellent years, such as 2021 or 2022, could be followed by less good years would therefore come as no surprise. But, paraphrasing the title of a book on economic crises, it would be said that "This time was different", not so much in nature, but in the speed and intensity with which the descent phase of the cycle occurred, particularly with regard to price trends. Combine this situation with the inertia of factor prices returning to pre-inflationary levels, and we have an environment of "perfect storm", especially demanding when operating in highly competitive commodities markets. As always happens when there are these changes in context, the past has not served as a good predictor of the future, posing additional and even new challenges for management, the organization and people. The future will likely bring us more situations like this. The ability that Altri as a whole has shown to manage such an adverse environment is reason for optimism.

The crisis became yet another opportunity to strengthen the Group's cohesion and competitive capacity, putting values such as Simplicity and Courage to the test: from purchasing processes to sales management, from industrial organization and production to people management, the entire business community mobilized, taking on the challenge, showing its resilience, but also its ambition. Altri comes out of this process with more strength, and more awareness of the priority issues that the future, closer or farther, will put us and, therefore, more prepared to answer them, something that has been recognized by investors and the financial market.

At the same time that our industry was experiencing a less positive situation, the world around it did not stop, complicating the surrounding environment, for reasons ranging from geostrategic tensions to the demands associated with sustainable development objectives (SDGs). The challenges have increased, and their nature has changed. To cope with them, it's not enough just to be more efficient, in the narrow sense of the term. The answer must be more elaborate, which poses new challenges for management, in terms of the diversity and quality of processes, products and skills to be mobilized.

For a company that embraces the motto "Building a more renewable world",

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