Luxempart S A : – Half Year Report 2023

HALF YEAR REPORT

TABLE OF CONTENT

MISSION STATEMENT

HIGHLIGHTS

MANAGEMENT REPORT

PORTFOLIO

FINANCIAL STATEMENTS

MANAGEMENT REPORT

WHAT WE STAND FOR	P.3
STRATEGIC HEADLINES	P.3
WHAT WE OFFER	P.4
HIGHLIGHTS	P.5
MESSAGE TO OUR SHAREHOLDERS	P.7
OTHER INFORMATION	P.17
RECONCILIATION BETWEEN IFRS AND THE PORTFOLIO ACTIVITY REPORT ....	P.17
MAIN PORTFOLIO LINES	P.19

CONDENSED CONSOLIDATED INTERIM

FINANCIAL STATEMENTS

P.25

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TABLE OF CONTENT	MISSION STATEMENT	HIGHLIGHTS	MANAGEMENT REPORT	PORTFOLIO

FINANCIAL STATEMENTS

WHAT WE STAND FOR

STRATEGIC HEADLINES

WHAT WE OFFER

Luxempart is a Luxembourg listed investment company with 30 years of existence and an estimated net asset value of EUR 2.2 billion as of June 30, 2023. Our growing team of close to 30 investment professionals and support staff is based in Luxembourg and actively covers our target markets of France, Benelux, DACH region and Northern Italy.

We aim to be a long term and trusted partner to successful entrepreneurs and families.

Luxempart shareholders and management believe in value creation through patient involvement and a shared vision with our partners.

We foster an ambitious team spirit, led by young and talented colleagues, that are close to our strategic markets, and that are empowered early on.

Our track record over the last thirty years has been positive with a group IRR above 15%, while paying out a steadily increasing dividend.

Direct Investments :

•Equity investments between EUR 25 and 100m per line

•Majority or active minority stakes

•Privately held (private equity) or listed companies

•Focus on France, DACH, Benelux and Northern Italy.

•No specific sector preference, but affinity for financial services & insurance, telecommunication, security, healthcare and industrials

•Supportive, hands-on approach, good understanding of family dynamics

Investment Funds :

•Investments usually between EUR 2.5 and 15m per fund

•Wide range of strategies - venture capital, growth capital and buyouts

•Geographical diversification - Europe, USA, Asia

• Co-investmentopportunities

LUXEMPART has a stable family shareholding structure, that promotes:

FOR OUR SHAREHOLDERS

•A resilient and diversified portfolio of growing European companies

•A direct access to private equity investments managed by a seasoned team

•An access to top-class private equity funds operating worldwide

•A steadily increasing dividend

•The first-class governance of a listed company

FOR OUR BUSINESS PARTNERS

•Tailor-made solutions for founders, family businesses and managers

•An entrepreneurial and industrial mindset

•An active support on all major strategic decisions and available capital to foster growth initiatives or to resist hard times

•No exit pressure with investment horizons beyond traditional private equity funds

•The ability to help national champions to become truly European and develop worldwide

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TABLE OF CONTENT	MISSION STATEMENT	HIGHLIGHTS

HIGHLIGHTS

MANAGEMENT REPORT	PORTFOLIO	FINANCIAL STATEMENTS

Direct investments

+4.3%

streamlining of listed portfolio,

NAV increase

+2.3%

Positive performance

strong deployment in private equity

Total NAV €2,232.6m (+€ 49.7m)

Total

shareholder return

+4.1%

Cash position

€233m

€183.3m investments

Investments funds

positive performance of	€19.3m
6.5%	in cash proceeds

€112m	€48.5m
27.9%	35.8%

+ reinforcement in several existing lines

€22.9m divestments

exit from non strategic listed lines

New investments of	€42m
€60.9m	in new commitments

Prudent

valuation

10.0x EBITDA pro forma 8.4x

(vs 9.9x in 2022)1

Strong growth of portfolio results

+8% EBITDA2

• companies accelerate growth

through acquisitions

in 1H2023

	1	Computed on our Direct Investment portfolio (both listed and unlisted companies). Comparing the last twelve months at the end of June 2023 to the last
		twelve months at the end of December 2022.
/ 5	2	Computed on our Direct Investment Portfolio of unlisted lines only.	/ 6

TABLE OF CONTENT

MISSION STATEMENT

HIGHLIGHTS

MANAGEMENT REPORT

PORTFOLIO

FINANCIAL STATEMENTS

MESSAGE TO OUR SHAREHOLDERS

Dear Shareholders,

The first half of the year has been marked by a strong activity for Luxempart.

We were able to maintain our investment pace with two new large direct investments in French companies, several add-on acquisitions in our portfolio companies and continued deployment in our growing private equity funds portfolio. Furthermore, the streamlining of our portfolio started three years ago is now mostly complete.

With a renewed and strengthened team, we have been able to execute the strategy that we fine-tuned three years ago. But our aim remains the same: build a solid and resilient portfolio, creating value over the long term. To achieve this, we seek to support great entrepreneurs and management teams in their development, and to select the best performing private equity funds to cover areas that we have decided not to cover directly.

In Direct Investments, we team up with entrepreneurs that seek capital and a supporting and constructive partner. They need to partner up to bring their company to the next level, either :

•because the company faces fast growth, and needs capital to stabilize and structure its operations, in order to attack the next wave of growth that its compelling product range can grant;

•or because the company has achieved a significant position in its development, and needs to move to the next stage, where the entrepreneur, usually alone at the helm of his business, feels less comfortable and seeks positive yet dynamic support. The ideal example of this is a company that has achieved national leadership, but now seeks to internationalize.

What does that mean for Luxempart and our investment approach? In our view, a number of elements are fundamental:

•We don't pretend to manage our companies, we remain in our role of active investors. Successful investors know what they are good at and what they don't master. This means that first and foremost, we need to be associated to entrepreneurial managers, who are significantly invested in their business, and who have shown success in running it for a long time. Investing in a business where you have to change everything is not a transaction for Luxempart. We team up with exceptional entrepreneurs and like-minded investors.

•Wecanhelpourcompaniesdevelopbybringingcompetences to the table that do not necessarily exist before we invest, such as support in M&A transactions and balance sheet structuring. Moreover, our presence in various European countries (such as France, Germany, Italy, Belgium) allows for an efficient support in developing our portfolio companies internationally, but our network also helps them identifying talent to reinforce their teams and hence execute their business plans.

•We bring an external eye that has seen many different situations, businesses and sectors, acting as a sparring partner to the entrepreneur on strategic matters.

•We grant time! A strategy and a successful management can be initiated in two quarters, but needs to be carried out over a much longer time horizon. An entrepreneur, who by nature is attached to the long term development of his company will seek partners that are patient, supportive and professional. We strive to be such partners, to support our investments with no pre-defined horizon, but to also never become complacent. When we are not the best shareholder any more, we will seek for an exit, in order to hand over the company to a new partner. We might remain associated to the company, but let the lead to another investor, as we already sometimes do when we team up with other investors. We have a number of examples to give for this.

•Eventually, we know that alone, we might go faster, but together, we get farther. We are happy to partner up with like-minded investors that share the same principles, goals and approach. This allows us to invest in larger companies, which reduces risks, because they benefit from a broader and well-established base of operations.

How does that translate in the strategy that we have been executing since 2020 ?

•We want to be close to our investments, to play a meaningful role and be the partner the entrepreneur turns to when he faces a challenge, be it positive or negative. This means

that we need to have a more limited portfolio of investments, commensurate with our team. We believeANNUALthat 20 to 25

lines can be handled with a team ofREPORT20 investment professionals. We have reduced our portfolio from 43 to

29 lines as of today. We have more time to spend on creating value for each line and to be a good partner to our co- shareholders.

•Reducing the number of lines means that we need to invest larger amounts per line. We have successfully initiated this move and today invest in general amounts above EUR 40m (with a target to reach EUR 50m-100m on average). Investing bigger amounts in a single company may seem more risky. But we believe it is not. It means that our team can dedicate more time and help more actively in developing the company. It also means that the company is usually larger, hence more stable and less risky. And in the end, investing even EUR 100m in a company means investing less than 5% of our NAV. As such, we can achieve satisfactory diversification while deploying more money on a single investment.

•However, we believe that our shareholders, by investing in Luxempart, seek for good diversification of their investment. This is where our Investment Funds activity comes into play. Thanks to this activity, we increase Luxempart's investment reach significantly beyond our European home base. We invest across the globe, mainly in North America, but also in other dynamic regions such as Asia. We do not supervise these investments, but select

third-party private equity funds that have proven their performance, professionalism and resilience. We maintain close contacts with these teams and benefit from these interactions, since they provide meaningful and valuable market insight and business intelligence on various sectors that we can also use in our Direct Investment activity.

Before discussing our half year results and outlook, we would like to put our recent investments or divestments into perspective, given the strategy we have outlined :

•We have built a more concentrated but nevertheless diversified portfolio in our Direct Investment activity, as detailed in this report, that encompasses, among others: financial services, healthcare, construction, general

2019industry, as well as business services.

•We are invested alongside seasoned and successful entrepreneurs, that come to us because we can help them developing or internationalizing their business : Evariste, seeking to further consolidate not only in France, but also abroad (more than 20 acquisitions made since late 2021, with first bridgeheads in Belgium and, very soon, another European country), Coutot-Roehrig, with a view to establish their operations in German-speaking Europe and the UK, or Metalworks, which seeks to further consolidate a fragmented realm of high-value industrial companies catering to the luxury sector.

•We help companies in changing their dimension: Crealis is the successful integration of two world leaders established in Italy and in France, to become the clear world leader in its segment, and then to broaden this business with additional external growth projects (well underway). Kestrel Vision was the world leader in visual inspection of glass containers via its subsidiary Tiama. We joined Caravelle, its historic shareholder, following two significant acquisitions in North America allowing the newly formed group to cover additional materials (plastic and metal) as well as client groups (from container manufacturers to bottlers). For both these investments, the thesis is to create an integrated world leader in its niche market.

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