Blue Cap : SUSTAINABILITY REPORT 2022

Declaration of conformity 2022

for use as non­financial declaration in accordance with

the CSR Directive Implementation Act

Blue Cap AG

Indicator set	GRI SRS
Contact	Annika Küppers
	Ludwigstraße 11
	80539 München
	Germany
	[phone]­24
	akueppers@blue­cap.de

This declaration of conformity has been reviewed by the Sustainability Code Office and verified as complete in accordance with the CSR Directive Implementation Act.

Indicator set

The declaration was drawn up in	GRI SRS
accordance with the following reporting
standards:

Reporting obligation:

This declaration of conformity has been reviewed by the Sustainability Code Office and verified as complete in accordance with the CSR Directive Implementation Act.

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Table of contents

General

General Information

CRITERIA 1-10: SUSTAINABILITY POLICY Strategy

1. Strategic Analysis and Action
2. Materiality
3. Objectives
4. Depth of the Value Chain

Process Management

1. Responsibility
2. Rules and Processes
3. Control

1. Key Performance Indicators (5­7)
2. Incentive Systems

1. Key Performance Indicators (8)
2. Stakeholder Engagement

1. Key Performance Indicators (9)
2. Innovation and Product Management

1. Key Performance Indicators (10)

CRITERIA 11-20: SUSTAINABILITY ASPECTS Environment

1. Usage of Natural Resources
2. Resource Management

1. Key Performance Indicators (11­12)
2. Climate­Relevant Emissions

13. Key Performance Indicators (13) Reporting according to EU taxonomy

Society

1. Employment Rights
2. Equal Opportunities
3. Qualifications
4. Key Performance Indicators (14­16)

1. Human Rights

1. Key Performance Indicators (17)
2. Corporate Citizenship

1. Key Performance Indicators (18)
2. Political Influence

1. Key Performance Indicators (19)
2. Conduct that Complies with the Law and Policy

1. Key Performance Indicators (20)

Date: 2022, source: company data. The reporting company is responsible for the information provided.

The data is provided for information purposes only. Please also note the disclaimer at www.nachhaltigkeitsrat.de/ impressum­und­datenschutzerklaerung

Downloaded from

www.nachhaltigkeitsrat.de

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General

General Information

Describe your business model (including type of company, products / services)

Blue Cap AG (also referred to below as "Blue Cap") is a listed investment company established in 2006 and headquartered in Munich. Under the "BUY, TRANSFORM, SELL" strategy, the company invests in SMEs showing clear potential to improve earnings and growth prospects in the B2B sector and actively supports them in their entrepreneurial development. Blue Cap basically focuses on fundamental profitability parameters (growth, cost structures, margins), securing and expanding its economic capacity (liquidity) and adjusting its strategic orientation for successful further development. The companies are headquartered in Germany, Austria and Switzerland and normally generate revenue of between EUR 30 and EUR 80 million. Blue Cap becomes the owner for a limited period. The optimal holding period is between three and seven years. However, value enhancement strategies that are designed for a longer period of time can be considered in equal measure. Companies can remain in the portfolio for a longer time, especially if they have long­term growth prospects. In principle: The portfolio companies are sold as soon as successful performance under a different ownership structure appears to make more sense and Blue Cap has been able to successfully implement large parts of the planned programme.

During the reporting year, the Group held majority stakes in the following companies, which are allocated to different segments:

Adhesives & Coatings

Neschen Coating GmbH (also referred to below as "Neschen "), self­adhesive products and coated media

Planatol GmbH (also referred to below as "Planatol "), solvent­free adhesive products and application systems

Plastics

Uniplast Knauer GmbH & Co. KG (also referred to below as "Uniplast "), plastic cups for the food industry (sold on 14/06/2023)

con­pearl GmbH (also referred to below as "con­pearl "), plastics recycling and products based on self­produced polypropylene foils and lightweight boards H+E Group (also referred to below as "H+E"), high­quality plastic parts and

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assemblies for the automotive industry and other sectors

Business Services

HY­Line Group (also referred to below as "HY­Line"), product and system supplier of electronics components with a focus on technical consulting and application expertise

Transline Group (also referred to below as "Transline"), translation service provider with a high degree of digitalisation and automation (acquired on 02/03/2022)

Others

Gämmerler GmbH (also referred to below as "Gämmerler "), service and spare parts business for postpress processing machines (sold on 04/02/2022)

nokra Optische Prüftechnik und Automation GmbH (also referred to below as

• nokra"), laser measuring systems for the automated inline inspection of geometric measurement variables

In addition, Blue Cap holds a 42% stake in INHECO Industrial Heating and Cooling GmbH (also referred to below as "INHECO"), a manufacturer of various components for laboratory automation in medical technology. The portfolio companies of Blue Cap operate at locations in Germany, Europe and the USA. Further information on the business models and areas of activity of the individual subsidiaries can be found in Blue Cap AG's annual report and on the company's website - www.blue­cap.de/portfolio/.

Additional remarks:

Note on gender rules

We generally follow a non­discriminatory approach and therefore want to use gender­neutral language. However, for reasons of better readability, we continue to use the generic masculine. Corresponding terms apply in principle to all genders in the sense of equal treatment and do not imply any valuation.

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CRITERIA 1-10: SUSTAINABILITY POLICY

Criteria 1-4 concerning STRATEGY

1. Strategic Analysis and Action

The company declares whether or not it pursues a sustainability strategy. It explains what concrete measures it is undertaking to operate in compliance with key recognised sector­specific, national and international standards.

SUSTAINABILITY AT BLUE CAP

Blue Cap's corporate activities are based on the conviction that sustainable added value is only possible when economic, ecological and social impacts and goals are considered as part of a holistic approach.

In 2020 and 2021, we began developing a comprehensive sustainability strategy from within the holding company together with the management teams of the portfolio companies. The three cornerstones of Environmental, Social and Governance (ESG) have been anchored in our "BUY, TRANSFORM, SELL" business model. Our aim is to constantly push ahead with our sustainability strategy. We see the development towards greater sustainability as an ongoing, iterative process and not as a one­off project.

For the 2021 financial year, the ESG performance of the holding company and the portfolio companies was measured against a comprehensive set of key performance indicators for the first time. We published these figures in our first German Sustainability Code Declaration 2021. The reporting standard of the German Sustainability Code enables us to reflect and transparently report on our performance and positioning in the 20 criteria. The KPIs we use are based on the requirements of the Global Reporting Initiative (GRI) and the indicators required therein.

In the 2022 financial year, we continued to work on operationalising the sustainability strategy in the key fields of activity (see criterion 2). The portfolio companies independently defined and anchored the responsibilities and processes from the area of sustainability. Taking the key performance indicators introduced in 2021 as a basis, we defined target values for selected areas and are presenting these for the first time in this report. As part of the review process this entailed, the set of key performance indicators was extended, revised or made more concrete on a case­by­case basis.

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Buy

We implement ESG criteria in the investment and due diligence processes in order to minimise our ESG risk exposure and identify ESG­based value growth potential. We use negative lists to exclude sectors and business models that are critical from an ESG perspective.

We draw on the requirements of the International Labour Organization (ILO), the OECD guidelines for multinationals, the principles of the United Nations Global Compact (UNGC), as well as the requirements of international human rights conventions and the EU Charter of Fundamental Rights for the ESG screening process to exclude sectors and business fields.

Transform

Our aim is to permanently improve the sustainability performance of all portfolio companies while ever they belong to the Blue Cap Group, e.g. by reducing our carbon footprint and developing our products with sustainability in mind. We monitor and measure this progress using clearly defined qualitative and quantitative key performance indicators. From 2023 onwards, ESG will be firmly established as an independent value lever in Blue Cap's "transformation radar" (see criterion 3).

Sell

During the sales process, we integrate an ESG risk profile into the equity story. We also take into account ESG criteria in accordance with the best­owner approach. The idea is to prevent us from selling one of our companies to a non­sustainable investor or strategist.

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2. Materiality

The company discloses the aspects of its business operations that have a significant impact on sustainability issues and what material impact sustainability issues have on its operations. It analyses the positive and negative effects and provides information as to how these insights are integrated into the company's processes.

OUR ENVIRONMENT

As an investment company, our environment is dominated by the SME sector, from which we acquire companies that have a clear potential to improve earnings as well as growth prospects. We concentrate on companies from the B2B area and a broad range of different sectors.

This reveals particularities: Because most of our portfolio companies are actively involved in production, many aspects of the supply chain are considered from an environmental perspective. In socio­economic terms, we are jointly responsible as an employer for maintaining and, ideally, expanding our portfolio companies and establishing standards for employee rights in the supply chain as well. We also want to ready our medium­sized portfolio companies today to meet the future reporting obligations of the CSRD, the Supply Chain Due Diligence Act and EU taxonomy. Blue Cap sees itself here as a partner at the side of its portfolio companies and will support and assist them with a sustainable business orientation.

KEY SUSTAINABILITY ISSUES

Sustainability affects Blue Cap in many ways, but especially through the potential impacts on and from our portfolio companies. As an investment company, we have to be involved in areas where we have the greatest impact and hence the greatest leverage. In spring 2020, a value chain analysis and a materiality analysis were conducted with external support. On the basis of the results, the Blue Cap Group identified the following relevant sustainability issues (see also criterion 9): Ecology, climate protection, employees as well as product portfolio and value creation. All of these issues have an impact on Blue Cap's portfolio companies (outside­in) and are influenced by Blue Cap's portfolio companies (Inside­out).

Ecology: Use of natural resources

Numerous raw materials are used in the portfolio companies in particular. The scarcity of these resources would have a significant impact on the companies' activities (outside­in). At the same time, it's important to keep the use of these raw materials as low and efficient as possible in order to minimise the impact of one's own actions (inside­out).

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Climate protection and adaptation to climate change

Climate change has a specific impact on Blue Cap as a holding company and on its portfolio companies. Physical climate­related risks that threaten locations due to extreme weather events, thus impairing the ability to conduct business, as well as transitory risks such as rising CO2 emission pricing or regulatory

requirements must be increasingly taken into account (outside­in). Moreover, C O2 emissions occur at all stages along the portfolio companies' value chain

(see also criterion 4) and therefore have an impact on climate change (inside­ out).

Employees: Working practices and attractiveness as an employer

Respect for employee rights and ensuring health and safety at the workplace must be ensured at every stage of value creation - especially in the manufacturing and production sector - and the possible negative effects must be countered in a preventive manner (inside­out). Both the portfolio companies and the holding company are heavily reliant on an adequate availability of skilled workers for their business success. Our attractiveness as an employer as well as our own training and development programmes are therefore crucial to sustainable development (outside­in). For this reason, Blue Cap will establish the key competence "People & Culture" as an independent pillar at holding company level at the beginning of 2023 and anchor it as a key transformation competence within the company. This concept is about promoting managers and further developing team skills. At the same time, we want to ensure that the transfer of expertise from older to younger employees runs smoothly. Our aim is to make portfolio company and the holding company attractive employers with a mindset that's open to transformation.

Product portfolio and value creation: Quality and safety

The products of our portfolio companies have an impact on people and the environment. The idea is to minimise negative impacts through a high level of quality and safety, as well as durability and technical reliability. The development of low­emission products and the expansion of recycling activities therefore constitute an important pillar in the research and development departments of the portfolio companies (inside­out).

OPPORTUNITIES AND RISKS

Engaging with the sustainability issues described above creates a raft of opportunities, but it's not without risks and challenges. As far as Blue Cap Holding is concerned, the opportunities presented from a sustainable business orientation clearly outweigh the risks. In addition to the positive contribution this makes to protecting the environment and to society as a whole, the opportunities are also relevant for business success:

The careful use of resources can generate cost savings and improve efficiency. Blue Cap is meeting the growing demand for more sustainable products.

Blue Cap offers employees a workplace based on fair and safe conditions and a

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respectful working environment.

Innovative and sustainable products enables Blue Cap to tap into new markets and generate additional growth.

Blue Cap provides its stakeholders with transparent information about its progress with regard to ESG and readies itself to comply with future legislation.

Challenges that need to be taken into account are primarily found in the necessary upfront investments for technology, research & development and corresponding material and human resources. The manufacture of more sustainable products also calls for a change in the use of raw materials and processes with suitable technical properties.

The risks are described in the following criteria: Criterion 12: Environmental

risks; criterion 14: Risks for employees; criterion 16: Risks for the qualification

of employees; criterion 17: Risks for human rights; criterion 18: Risks for the

community; criterion 20: Compliance risks.

As already shown in criterion 1, Blue Cap AG has integrated the relevant topics directly into its "BUY, TRANSFORM, SELL" business model as a conclusion drawn from the materiality process. This ensures that the essential ESG topics are implemented in the corporate processes directly. From 2023 onwards, ESG will be firmly established as an independent value lever in Blue Cap's "transformation radar" (see criterion 3).

3. Objectives

The company discloses what qualitative and/or quantitative as well as temporally defined sustainability goals have been set and operationalised and how their level of achievement is monitored.

Our goal: "MAKE THINGS BETTER"

Blue Cap's sustainability approach is not just limited to avoiding ESG­related risks.

We see sustainability as an opportunity and an equal value lever for developing our subsidiaries. True to the guiding principle of "make things better", our aim is therefore to continuously improve the sustainability performance of our portfolio companies as part of the transformation process. At Group and individual portfolio company level, we aim to take equal account of economic, ecological and social goals in the long term to ensure that we can continue to develop in a sustainable manner - which also means creating sustainable value. This makes ESG one of our seven transformation dimensions, which we actively manage from within the holding company. Blue Cap considers itself a partner to its portfolio companies and offers them support for substantive and

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