HAL Trust : Report on the first half year 2022

HAL Trust

Report on the first half year 2022

Table of Contents

Interim report of the Executive Board of HAL Holding N.V.	3
Condensed Interim Consolidated Financial Statements HAL Trust	6
Interim Consolidated Statement of Financial Position	7
Interim Consolidated Statement of Income	8
Interim Consolidated Statement of Comprehensive Income	9
Interim Consolidated Statement of Changes in Equity	10
Interim Consolidated Statement of Cash Flows	11
Basis of preparation	12
Notes to the Condensed Interim Consolidated Financial Statements	16
List of Principal subsidiaries and minority interests	31
Supplemental information	32
Statement by the Executive Board	41

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Interim report of the Executive Board of HAL Holding N.V.

First half year net loss of € 161 million (2021: net income € 597 million). Net asset value decreases by € 56 million.

Net income of HAL Holding N.V. for the first six months of 2022 amounted to a loss of € 161 million (€ 1.86 per share) compared to a profit of € 597 million (€ 6.88 per share) for the same period last year, a decrease of € 758 million.

This decrease is primarily due to exceptional losses at Vopak and a goodwill impairment relating to the Pro Gamers Group (total effect for HAL of € 374 million), as wel as the profit contribution of GrandVision (sold in July 2021) during the first half of 2021(effect € 355 million).

The net asset value based on the market value of the ownership interests in quoted companies and the liquid portfolio and on the book value of the unquoted companies, decreased by € 56 million during the first six months of 2022. After taking into account the cash portion of the 2021 dividend (€ 247 million) and the sale of treasury shares (€ 3 million), the net asset value amounted to € 12,811 million (€ 144.60 per share) on June 30, 2022, compared to € 13,111 million (€ 151.22 per share) on December 31, 2021.

During the period from June 30, 2022, through August 19, 2022, the value of the ownership interests in quoted companies and the liquid portfolio increased by approximately € 20 million (€ 0.23 per share).

The information in this report has not been audited nor reviewed by an external auditor.

Quoted minority interests

At the end of June, the stock market value of HAL's interests in quoted minority interests (Koninklijke Vopak N.V., Koninklijke Boskalis Westminster N.V., Safilo Group S.p.A. and SBM Offshore N.V.) amounted to € 4.5 billion compared to € 4.3 billion at the end of 2021. During the first half year, Boskalis shares were acquired for an amount of € 0.3 billion. The net income from quoted minority interests amounted to a loss of € 26 million (2021: profit of € 97 million) and include exceptional losses at Vopak (HAL share € 223 million). The income from the other quoted minority interests increased.

Unquoted companies

Revenues from the unquoted subsidiaries for the first half year amounted to € 2,826 million (2021: € 2,335 million). representing an increase of 21%. Excluding the effect of acquisitions, divestitures and changes in currency exchange rates, revenues from the unquoted companies increased by 8%, primarily due to higher revenues of Broadview Holding, Timber and Building Supplies Holland and Van Wijnen. The operating income of the unquoted companies (income before interest, exceptional and non-recurring items, taxes and amortization of intangible assets but including amortization of software)

for the first half year amounted to € 180 million (2021:

• 216 million), a decrease of € 36 million. Excluding the effect of acquisitions, divestitures and changes in currency exchange rates operating income decreased by € 42 million.
  Net income from unquoted companies include goodwill impairment charges related to the Pro Gamers Group (HAL share € 151 million).

Liquid portfolio

As of June 30, 2022, the corporate liquid portfolio amounted to € 4.9 billion compared to € 5.6 billion as of December 31, 2021. This excludes the amount of € 0.5 billion held in escrow subsequent to the sale of the ownership interest in GrandVision. The decrease in the liquid portfolio is primarily due to the financing of the acquisition of shares in Boskalis, payment of the dividend over 2021 and the acquisition of a 31.45% ownership interest in Prodrive Technologies. Adverse developments in the financial markets, mainly relating to increased interest rates, had a negative effect of € 163 million on the liquid portfolio. The liquid portfolio consisted for 91% of fixed income instruments (primarily investment grade bonds, with an average duration below two years, and bank deposits) and for 9% of equities. The corporate liquid portfolio provided a total negative return of 2.9% during the first half of 2022, compared to a return of

7.1 % for the same period last year.

Update voluntary public offer for Boskalis

On June 24, 2022, HAL launched an all-cash voluntary public offer of € 32.50 per share (cum dividend) for all issued and outstanding ordinary shares of Koninklijke Boskalis Westminster N.V. ('Boskalis') adjusted to

• 32.00 for the € 0.50 cash dividend paid by Boskalis in May 2022. The acceptance period of the offer runs from June 27, 2022, to September 2, 2022, and completion is expected in the third quarter of 2022. The offer is being made on the terms and subject to the conditions and restrictions contained in the offer memorandum, which is available on HAL's website at www.halholding.com/ boskalis-offer.
  As from March 10, 2022 Stichting Hyacinth (the 'Foundation') acquired Boskalis shares. The Foundation has entered into a block-trade agreement with HAL to sell and transfer all its Boskalis shares to HAL, subject to the condition precedent of HAL having obtained the requisite regulatory and competition clearances. As a result of all regulatory and competition clearances having been obtained on July 27, 2022, the sale by the Foundation to HAL under the block-trade agreement of March 10, 2022, of all shares acquired or yet to be acquired by the Foundation has become unconditional. These shares will be transferred by the Foundation to HAL at or shortly after the end of the acceptance period. In the aggregate, HAL and the Foundation currently own Shares

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representing approximately 55.6% of the issued share capital of Boskalis.

Acquisitions and divestitures unquoted companies and real estate

On February 17, 2022, HAL completed the acquisition of 31.45% of the shares in Prodrive Technologies Group B.V. The company is active in the research, development and manufacturing of high-tech electronics, software and mechatronic products and systems. Sales for 2021 amounted to € 304 million.

On May 31, 2022, Pro Gamers Group (64% HAL) acquired DuckyChannel International Co. Ltd. ('Ducky') based in Taiwan. Ducky develops and manufactures mechanical keyboards and has annual sales of approximately € 30 million.

On May 2, 2022, HAL sold its ownership interest in Orthopedie Investments Holding B.V. ('Livit'). Livit manufactures and sells orthopedic and other medical aids to end-customers and was acquired by HAL in 2007.

On May 31, 2022, HAL sold its ownership interest in Floramedia Group B.V. ('Floramedia'). Floramedia is active in specialty printing, marketing and communication for the green sector. HAL became a shareholder in Floramedia via the acquisition of Mercurius Groep Holding B.V. in 1999.

On July 8, 2022, HAL sold its ownership interest in MYLAPS B.V. ('MYLAPS'). MYLAPS is active in the development and production of identification and timing equipment for sports events. HAL became a shareholder in MYLAPS via the acquisition of an interest in AMB It Holding B.V. in 1998.

The total capital gain on the above three transactions amounts to approximately € 85 million

On February 8, 2022, a joint venture in which HAL had an 85.5% equity interest sold an apartment building in Bellevue, a suburb of Seattle, consisting of 279 apartments. The sale resulted in proceeds to HAL of € 75 million and a pre-tax capital gain of € 50 million. During the first half year, HAL Real Estate in Seattle entered into two joint venture agreements for the acquisition of two parcels of land in the Seattle area for the construction of 41 town homes and the design and entitlement of a 16-story mixed used building. The total expected costs of these two projects are $ 73 million and HAL's equity commitment is $ 19 million.

On July 28, 2022, HAL entered into a joint venture agreement for the construction of 158 apartments in the Seattle area. The total expected costs of this project are

• 61 million and HAL's equity commitment is $ 17 million.
  On August 16, 2022, a joint venture in which HAL had a 90% equity interest sold an apartment building in Beacon Hill, a neighborhood in southeast Seattle, consisting of 139 apartments. The sale resulted in proceeds to HAL of € 27 million and a pre-tax capital gain of € 12 million.

Risks

In the 2021 annual report, the Company included a description of risks associated with its strategy and its implementation such as, but not limited to: market value risk, interest rate risk, currency risk, credit risk, liquidity risk, concentration risk, acquisition risk, financial reporting risk and other risks. The descriptions of these risks are deemed to be incorporated in this report by reference. We expect that the above risk factors will continue to exist for the second half of 2022. In the Company's view, the nature of these risk factors has not materially changed in the first half of 2022. In this respect, reference is made to the paragraph below with respect to the conflict between the Russian federation and Ukraine.

We also refer to the statement on page 41 of this report.

Exposure to the Russian federation and Ukraine

We are deeply concerned about the tragic developments in Ukraine and hope that this situation develops in such a way that this humanitarian drama comes to an end soon.

The direct exposure to the Russian federation and Ukraine is limited. Revenues for 2021 (including Vopak and Safilo and Pro Gamers Group on an annual basis) in the Russian federation and Ukraine amounted to approximately € 80 million. The corporate liquid portfolio as of December 31, 2021, included bonds issued by the Russian federation and a Russian corporate entity for an amount of € 19 million. These assets have been fully impaired. Despite this relatively low direct exposure, the conflict between the Russian federation and Ukraine may result in a decline in demand for the products and services of certain subsidiaries and minority owned companies as well as disruptions of global supply chains leading to inflationary effects on costs and difficulties in servicing demand. During the first half year, certain subsidiaries experienced increased costs especially with respect to energy and raw materials. At this stage it is difficult to assess how long this inflationary pressure will persist and how it will affect the profitability of the operating companies.

Prospects

Due to the fact that a significant part of the Company's net income is determined by the results of the quoted minority interests and potential capital gains and losses, we generally do not express expectations with respect to net income. However, we expect that the net income for 2022 will be significantly lower than the net income for 2021 due to the gain realized on the sale of GrandVision in 2021 (€ 3.5 billion).

The Executive Board of HAL Holding N.V.

August 25, 2022

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Financial calendar
Interim statement	November 23, 2022
Publication of preliminary net asset
value	January 26, 2023
Publication of 2022 annual results	March 29, 2023
Shareholders' meeting HAL Trust
and interim statement	May 17, 2023

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