Cavotec : Annual and Sustainability Report 2023

2023 Annual and Sustainability Report

Highlights 2023	1
Cavotec in brief	2
CEO's message	4
Market drivers	6
Our business model	8
Strategic priorities	9
Financial performance	12
Offering and introduction to the segments	14
Segment Ports & Maritime	16
Segment Industry	20
Sustainability report	24
Remuneration report	38
Corporate governance report	46
Board of Directors	52
Cavotec Management Team	54
Consolidated financial statements	56
Risk management	82
Statutory financial statements	92
Financial definitions	101
The share	102
Shareholder information	104
Cavotec's history in brief	105

HIGHLIGHTS 2023 |

Improved financial performance and key business wins

Through clear strategic priorities, Cavotec has improved its financial position and performance during 2023. Cavotec has also won several important contracts with both new and existing customers.

Key events in 2023

• Order valued at EUR 6.65 million from one of the world's largest shipping companies for shore power systems
• Long-termservice agreement signed with COSCO Group
• Order signed for mooring units with North American seaway operator worth EUR 6.4 million
• Directed new issue of shares of SEK 165 million
• Joakim Wahlquist appointed new CFO

Key events after the end of 2023

• Two-yearservice agreement signed with APM Terminals at Port of Tanger
• Shore power retrofit order signed with major European shipping line worth USD 5.7 million
• Three-yearservice agreement signed for shore power systems in a large North American port
• The world's first ultra-fast 3 MW charging system for battery- powered heavy-duty vehicles in service at a site in Australia

EUR 000s	2023	2022	2021	2020
Revenue	180,734	147,849	115,794	115,342
Order backlog	123,562	147,207	98,893	57,773
EBIT	7,227	(4,506)	(747)	37
EBIT margin	4.0%	-3.0%	-0.6%	0.0%
Net profit/(loss) for the period	180	(3,170)	(1,211)	(2,973)
Basic and diluted earnings per share, EUR	0.002	(0.034)	(0.013)	(0.031)
Operating cash flow	1,933	(5,485)	8,654	15,501
Net debt	(18,638)	(30,328)	(19,630)	(15,264)
Leverage ratio	1.29x	12.5x	3.20x	0.98x

Revenue, EUR million

EBIT, EUR million

200				8
180				6
160
140				4
120				2
100
			0
80
60				(2)
40				(4)
20
0				(6)
2020	2021	2022	2023	2020	2021	2022	2023

Operating cash flow, EUR million

20
15
10
5
0
(5)
(10)
2020	2021	2022	2023

Annual and Sustainability Report 2023 | Cavotec

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| CAVOTEC IN BRIEF

Cavotec in brief

Cavotec is a leading cleantech company that designs

and delivers connection and electrification solutions to enable the decarbonisation of ports and industrial applications.

180.7

Revenue, EUR million

7.2

EBIT, EUR million

123.6

Order backlog, EUR million

80+

Number of countries where Cavotec's systems are installed

664

Employees

Backed by close to 50 years of experience, our systems ensure safe, efficient and sustainable operations for a wide variety of customers and applications worldwide. Our offering includes automated mooring, shore power, motorised reels, crane electrification and charging solutions.

We enable our customers to optimise productivity, minimise risk to personnel and equipment, and reduce environmental impact. Our unique technologies and engineering expertise combined with a worldwide service offering maximise our customers' profitability and sustainability. In this way, we help their businesses grow and accelerate progress towards a sustainable future.

What

We connect the future.

Why

We want to contribute to a world that is cleaner, safer and more efficient by providing innovative connection solutions for ships, ports, and industrial equipment today.

How

We thrive by shaping future expectations in the areas in which we are active. Our credibility derives from our expertise and dedication to innovation and world-class operations. Our success rests on our core values: Integrity, Accountability, Performance, and Teamwork.

What Why How

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Annual and Sustainability Report 2023 | Cavotec

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| CEO'S MESSAGE

Creating a solid base for profitable growth

Our clear strategic priorities and change program have proven effective and our financial results and position have improved significantly in 2023. We have also made key business wins with important contracts globally. Although the macroeconomic situation remains uncertain, there is strong demand for our electrification solutions driven by national regulations and the need to reduce emissions.

• We ended 2023 with high business activity and important contracts that give us a good basis for profitable growth."
  David Pagels,
  CEO

The growth of 22.2% in 2023 to EUR

180.7 million and the turnaround of EBIT to EUR 7.2 million from -4.5 million clearly show that we are on the right track with the transformation of Cavotec. We work with clear strategic priorities in six areas with comprehensive change programs. We turn over basically all stones in the group and improve routines and processes. The performance in 2023 show that we have come a long way but we are far from done.

One of the externally more visible efforts in 2023 is the review of the order backlog with the goal of securing profitable growth. The decline of 16.1% to EUR 123.6 million reflects both a normalisation of the order backlog and an extraordinary high order intake in 2022. We strongly believe the review is a key strategic move and a driver for continued improved profitability going forward. Some other driving factors for the improved profitability are the increased volumes along with the determined work to increase production efficiency, enhance our sales processes and sharpen our service offering. In 2023, the Ports & Maritime segment was the most successful with these new ways of working, but we expect also the Industry segment to make significant progress in this area going forward.

Strong interest in our solutions We meet a steady stream of customer inquiries and strong interest in our electrification solutions and service offering. The demand is driven by the increasingly urgent need to reduce the

world's emissions of greenhouse gases, to reduce noise in ports and cruise terminals and to improve customers' operational efficiency.

In 2023, we announced a few customers wins that prove our leading position in, among other things, automatic vacuum mooring and shore power. We signed a contract worth EUR 6.65 million with one of the world's largest shipping lines to supply shore power equipment to newbuild container ships. At the end of the year, we announced an order with an existing North American customer for an additional six vacuum mooring units to be installed at locks in a seaway system. The order is valued to EUR

6.5 million. We kicked off 2024 by announcing a contract worth USD 5.7 million to retrofit vessels with shore power solutions for a major European shipping line.

Attractive service offering

Yet another of our changes in 2023 includes the decision to increase the focus on our service offering, which has already paid off. We have announced

1. long-termservice agreement with COSCO Group, one of the world's largest shipping companies. Based on the new agreement, we provide maintenance for more than 60 ocean- going vessels equipped with our shore power systems. In 2024, we have so far announced a two-year service agreement with APM Terminals at Port of Tanger. We will be servicing our 45 vacuum mooring master units and 31 power units installed at the port. In

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CEO'S MESSAGE |

this way, the customer's operational efficiency is significantly improved and the performance of the products is optimised. A special contract is the announced three-year service agreement signed for shore power systems in a large North American port. Here we will assist in the plug in and plug out procedures for vessels which will contribute to improved operational efficiency in the port.

Another strategically important area for us that we will increase our focus on in 2024 is product development since we are determined to continue being a world-leading player in electrification. A good example of our leadership is our ultra-fast 3MW charger - the world's first and most powerful - which is in full operation at a mining site in Australia. Developed by the Industry segment during 2023, it is now included in a solution that charges a prototype 240- ton electric haul truck in just 30

minutes. This technological advance paves the way for the electrification of heavy-duty vehicles and greatly reduced emissions in critical industries worldwide.

Strengthened financial position

It is gratifying to see how our improved profitability and financial management have led to a significantly improved cash flow and strengthened financial position. Operating cash flow increased to EUR 1.9 million from EUR -5.5 million and net debt decreased from EUR 30.3 million to EUR 18.6 during 2023. Our strengthened financial position means that our financing costs will be lower going forward.

Outlook

We ended 2023 with high business activity and important contracts that give us a good basis for profitable growth. Perhaps the most important thing for us in 2024 is the momentum

we have and the commitment that I see everywhere in Cavotec. Although the macroeconomic situation remains uncertain, we meet a continued strong interest from both existing and new customers for our leading electrification solutions. I am confident that Cavotec will continue to be a key player in

the transition to a more sustainable, emission-free world also in the coming years.

David Pagels

CEO

Annual and Sustainability Report 2023 | Cavotec

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| MARKET DRIVERS

Global market trends create new opportunities for us

We have gained deep insights into our market and its driving forces due to our close

to 50 years of experience and long-term customer relationships. On a day-to-day basis, this is about being able to understand, anticipate and adapt to the changing needs and behaviours of our market. This in turn enables us to deepen existing customer relationships, win new customers and continue to strengthen our market position.

Climate

The climate is the most important issue of our time. In order to reach the goals of the Paris Agreement, it is required that all industries and businesses contribute by reducing their emissions. The shipping sector accounted for 2.89% of global greenhouse gas emissions in 2018 according to the International Maritime Organization. When we look at the mining sector, it is responsible for between 4 and 7% of the world's greenhouse gas emissions according to an article published by McKinsey & Co in 2020.

The urgency of reducing carbon emissions is increasingly a priority for a growing number of industries, including the shipping and mining sectors. This means that interest in Cavotec's products and services increases because they reduce customers´ carbon footprint and help them contribute to reaching the Paris Agreement.

Electrification

A critical part of efforts to fullfil the Paris Agreement is electrification and the transition to fossil-free energy. The electrification of processes that have until now been performed with fossil fuels is ongoing throughout many sectors, not least in shipping and mining. Electrification not only contributes to the decarbonisation, it can also generate substantial energy savings due to greater efficiency and enhance air quality.

The electrification of vessels, cranes and other industrial equipment

are central parts of Cavotec's offering. Shipping companies and shipyards, for example, are becoming increasingly interested in the shore power solutions that enable ships to switch off the diesel generators

at berth.

Noise pollution

Awareness is increasing globally about problems associated with noise pollution both on land and in the seas. Noise pollution affects many people on a daily basis and can cause health problems such as high blood pressure, heart disease, and stress. Today we also know that noise pollution can affect animals on land and in the seas.

For many sectors, it is important to reduce noise in the workplace to improve the health of employees and increase attractiveness as an employer. Here, Cavotec contributes through its products and solutions that improve the sound environments in ports and mines, for example.

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MARKET DRIVERS |

Safety

Occupational injuries and work- related ill health are high on the sustainability agenda of many companies today. Many companies have zero visions when it comes to occupational injuries and invest in equipment and processes that reduce risks to employees.

For Cavotec, safe products and solutions that improve the workplace environment have always been an important driving force and key competitive advantage. By automating previously manual processes, such as mooring, the risk of injury to sailors and dock workers is significantly reduced.

Global trade

Global trade means that many different raw materials and products are transported over great distances in the world. About 90% of global trade is today seaborne according to the International Maritime Organization. Efficient and well- performing value chains are central to the functioning of global trading systems.

End-users of Cavotec's solutions are central to the efficient functioning of global trade and they require constant service support to maintain efficiency and delivery reliability. Cavotec is therefore a core part of its customers´ value chains, which is an important reason for the long and close customer relationships.

Regulation

In many parts of the world, demands on the industry to reduce its negative climate and environmental impact are increasing. Requirements are being made by international bodies such as the International Maritime Organization and supranational authorities such as the EU. Demands are also increasing from local authorities that want to lower diesel emissions and noise levels in and around port areas, for example. Stakeholders such as investors and lenders are also pushing companies to become more sustainable.

Increased regulations drive demand for Cavotec's products and services. For Cavotec, this creates increased opportunities to reach new customers and strengthen its market position in sectors that are critical for industry and society.

Annual and Sustainability Report 2023 | Cavotec

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| OUR BUSINESS MODEL

We target the global need to decarbonise

Worldwide, the need to reduce greenhouse gas emissions grow. With our solutions and services, emissions in port, mines and other industrial sites are reduced while workplaces become safer.

Key resources

Skilled employees Global reach

49 years of experience and innovation

With close to 50 years of experience and innovation, we have established ourselves as a preferred supplier and service provider to leading companies in above all the marine and mining industries. By enabling the electrification of ships, port equipment, and mining machinery, we support our customers to reduce greenhouse gas emissions and also noise pollution. The need to reduce the environmental impact is driven from several different stakeholders, including supranational bodies and local authorities. Our solutions also contribute to increasing the safety of professional groups such as sailors, dock workers and miners.

Customers in critical infrastructure We provide our solutions through our two business segments: Ports & Maritime and Industry. Our services organisation provide maintenance, controls, spare parts and repairs to extend equipment lifespan.

Our value proposition

We provide safe and efficient electrification solutions and services that decarbonise ports, vessels and heavy-duty vehicles.

Within Ports & Maritime, a significant proportion of sales are large projects such as electrically powered vacuum mooring systems and motorised reels for container cranes. Sales of reels take place through OEMs that install Cavotec's products

in port cranes, for example. The end customers, typically ports and shipping companies, provide OEMs with product and system specifications.

For Industry, mining machinery OEMs account for the majority of revenue. Sales mainly comprise of critical components in larger volumes.

Critical solutions for our customers Our business is characterised by close, long-term customer relationships.

Because part of our sales are to OEMs, it is important that we also maintain close relationships with the end customers, since they define the specifications. The end customers may also be those who

Customers

Ports and port operators

Shipbuilder and shipping companies

Mining operators

Manufactures of mining machinery and mobile cranes

purchase maintenance service and spare parts directly from us.

Several of our products represent a small value of the final product, but they are critical components of the operation. Downtime can create substantial cost, so customers and end customers are meticulous in their specifications, and value service excellence.

Global supply organisation Assembly of our products takes place in plants, often located in the same region as the customers. Through our service organization and its local presence, we are geographically close to our customers.

Our most important resource is our over 600 employees worldwide and their collective experience. Together with our customers and partners, we constantly develop our offering and create new innovative solutions.

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