Luxempart : Signed luxempart consolidated fs 2020

CONSOLIDATED FINANCIAL STATEMENTS

at 31 December 2020

Contents

IFRS consolidated financial statements

Report of the Réviseur d'entreprises agréé

p. 5

Consolidated statement of profit or loss for the year ended 31 December 2020

p. 11

Consolidated statement of comprehensive income for the year ended 31 December 2020

p. 12

Consolidated statement of financial position at 31 December 2020

p. 13

Consolidated statement of cash flow for the year ended 31 December 2020

p. 15

Consolidated statement of changes in equity for the year ended 31 December 2019 and 2020

p. 16

Notes to the consolidated financial statements as at 31 December 2020

p. 17

Note 1 - General information

p. 17

Note 2 - Consolidation principles, valuation rules, and accounting standards

p. 17

Note 3 - Segment information

p. 26

Note 4 - Operating expenses

p. 30

Note 5 - Staff costs

p. 30

Note 6 - Dividends received

p. 32

Note 7 - Financial income and expenses

p. 32

Note 8 - Current and deferred tax expenses	p. 33
Note 9 - Intangible and tangible fixed assets	p. 34
Note 10 - Financial assets at fair value through
profit or loss	p. 35
Note 11 - Non-current loans and receivables	p. 37
Note 12 - Current loans and receivables	p. 38
Note 13 - Bank deposits, cash and cash equivalents	p. 38
Note 14 - Capital and share premium	p. 39
Note 15 - Reserves and own shares	p. 40
Note 16 - Dividends paid	p. 41
Note 17 - Bank borrowings	p. 41
Note 18 - Non-current provisions	p. 42
Note 19 - Current liabilities	p. 42
Note 20 - List of subsidiaries	p. 43
Note 21 - Main off-balance sheet rights
and commitments	p. 45

Note 22 - Directors' allowances and executive

management remuneration	p.45
Note 23 - Remuneration of the Réviseur
d'entreprises agréé	p. 46
Note 24 - Related parties	p. 46
Note 25 - Financial risks	p. 46
Note 26 - Significant event	p. 48
Note 27 - Events after the reporting period	p. 48

Deloitte Audit

Société à responsabilité limitée 20 Boulevard de Kockelscheuer L-1821 Luxembourg

Tel: [phone]www.deloitte.lu

To the Shareholders of

Luxempart S.A.

12, rue Léon Laval L-3372 Leudelange

REPORT OF THE "RÉVISEUR D'ENTREPRISES AGRÉÉ"

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Luxempart S.A. and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at December 31, 2020, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects the consolidated financial position of the Group as at December 31, 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Basis for Opinion

We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of July 23, 2016 on the audit profession (Law of July 23, 2016) and with International Standards on Auditing (ISAs) as adopted for Luxembourg by the "Commission de Surveillance du Secteur Financier" (CSSF). Our responsibilities under the EU Regulation No 537/2014, the Law of July 23, 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the "Responsibilities of the "réviseur d'entreprises agréé" for the Audit of the Consolidated Financial Statements section of our report. We are also independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Société à responsabilité limitée au capital de 360.000 €

RCS Luxembourg B 67.895

Autorisation d'établissement 10022179

© Deloitte Audit, SARL

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matters identified

Auditor's Answer

Valuation of unquoted investments and fair value changes impacting the consolidated statement of comprehensive income The Group owns a large number of unlisted securities representing 73% of the net asset. These investments are valued according to the fair value principle. The fair value is determined by management following the International Private Equity and Venture Capital Valuation (IPEV) guidelines and the IFRS norms as described in note 2. Owing to the illiquid nature of these investments, the assessment of fair valuation implies significant and complex judgements from management. Even minor changes to the assumptions used in these judgements specifically in the preliminary estimates of financial results and forecasts for the market multiple methods, illiquidity discounts, or others could have a significant impact on the valuation of the unlisted investment portfolio. This could therefore affect the return generated for the shareholders.

We tested internal control processes related to the fair valuation of unquoted investments and tested their implementation. Specifically, we examined the valuation governance structure as well as meeting minutes of the management's oversight of the valuation of unlisted investments. We assessed that management's valuation policies were in compliance with IFRS norms and the IPEV guidelines and that the valuation approach adopted by management was appropriate. With the assistance of our valuation experts, we formed an independent assessment of the valuation of a sample of unlisted investments. With respect of the assumptions used in the valuation models, we tested that the financials metrics and earnings multiples are in line with the latest available accounts of the company at the date of signature of our report. We assessed the reasonableness of the transactions multiples, earnings multiples and/or other comparable information used with available relevant external market sources.

We verified the arithmetical accuracy of the models prepared by management.

We identified and analysed independently the explanation provided by management for any fair value changes compared to the prior exercise, and where applicable, the differences between the selling price of investments realised during the financial year and the prior year fair value: This was to further assess the reasonableness of the current year valuation models and methodology adopted by management.

We ensured the impact of fair value movements are correctly reflected in the consolidated statement of comprehensive income.

Other information

The Board of Directors is responsible for the other information. The other information comprises the information stated in the management report and the Corporate Governance Statement but does not include the consolidated financial statements and our report of the "réviseur d'entreprises agréé" thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard.

Responsibilities of the Board of Directors and Those Charged with Governance for the Consolidated Financial Statements

The Board of Directors is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with IFRSs as adopted by the European Union, and for such internal control as the Board of

Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Responsibilities of the "réviseur d'entreprises agréé" for the Audit of the Consolidated Financial Statements

The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the "réviseur d'entreprises agréé" that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014, the Law of July 23, 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of July 23, 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

• • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors.

• • Conclude on the appropriateness of Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of the "réviseur d'entreprises agréé" to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of the "réviseur d'entreprises agréé". However, future events or conditions may cause the Group to cease to continue as a going concern.

• • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• • Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter.

Report on Other Legal and Regulatory Requirements

We have been appointed as "réviseur d'entreprises agréé" by the General Meeting of the Shareholders on April 27, 2020 and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 19 years.

The consolidated management report is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements.

The Corporate Governance Statement, as published on the Company's [http://www.luxempart.lu/], is the responsibility of the Board of Directors. The information required by Article 68ter paragraph (1) letters c) and d) of the law of December 19, 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings, as amended, is consistent, at the date of this report, with the consolidated financial statements and has been prepared in accordance with applicable legal requirements.

We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent.

We confirm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014 were not provided and that we remained independent of the Group in conducting the audit.

For Deloitte Audit, Cabinet de Révision Agréé

Christian Van Dartel, Réviseur d'Entreprises Agréé

Partner

March 25, 2021

10

Consolidated statement of profit or loss

for the year ended 31 December 2020

in thousands of €	Notes	31/12/2020	31/12/2019
Investments activities
Dividends received	6	47,364	19,758
Net gains / (losses) on financial assets	10	120,490	196,094
Profit on investments activities	167,854	215,852
Ordinary activities
Services / recovery of services	2,433	3,068
Staff costs	5	-6,311	-6,118
Operating expenses	4	-6,362	-5,187
Depreciation and amortisation of non-current assets	9	-923	-101
Depreciation and amortisation of current assets	-544	-
Profit on ordinary activities	-11,707	-8,338
Operating income	156,146	207,514
Financial income	7	1,207	713
Financial expenses	7	-635	-752
Profit before tax	156,718	207,475
Tax current	8	-24	-25
Profit for the year	156,695	207,449
Attributable to the owners of the Company	156,695	207,449
Earnings per share attributable to the owners of the Company
Weighted average number of shares	15	20,084,332	20,075,026
Earnings per share -
attributable to the owners of the Company (in €)	7.80	10.33
The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of comprehensive income

for the year ended 31 December 2020

in thousands of €	Notes	31/12/2020	31/12/2019
Consolidated profit for the year	156,695	207,449
Items that could be reclassified subsequently to profit or loss :	-	-
Total comprehensive income	156,695	207,449
Attributable to the owners of the Company	156,695	207,449
Comprehensive income attributable to the owners of the Company
Weighted average number of shares	15	20,084,332	20,075,026
Comprehensive income per share attributable
to the owners of the Company (in €)	7.80	10.33
The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of financial position

at 31 December 2020

Assets

in thousands of €	Notes	31/12/2020	31/12/2019
Non-current assets
Intangible and tangible fixed assets	9	381	459
Financial assets at fair value through profit and loss	2,3,10	1,599,666	1,458,625
Loans and receivables	11	62	844
Total non-current assets	1,600,109	1,459,929
Current assets
Loans and receivables	12	5,212	2,129
Bank deposits	13	85,000	80,000
Cash and cash equivalents	13	38,978	51,366
Total current assets	129,190	133,495
Total assets	1,729,299	1,593,423
The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of financial position

at 31 December 2020

Equity and liabilities

in thousands of €	Notes	31/12/2020	31/12/2019
Equity attributable to the owners of the Company
Capital and share premium	14	66,860	66,860
Reserves	15	1,478,509	1,300,371
Profit for the year attributable to the owners of the Company	156,695	207,449
Total equity attributable to the owners of the Company	1,702,064	1,574,680
Total equity	1,702,064	1,574,680
Non-current liabilities
Non-current provisions	18	3,308	3,342
Bank borrowing	17	19,169	10,179
Total non-current liabilities	22,477	13,521
Current liabilities
Trade and other payables	19	4,758	5,222
Total current liabilities	4,758	5,222
Total liabilities	27,235	18,743
Total equity and liabilities	1,729,299	1,593,423
The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of cash flow

for the year ended 31 December 2020

in thousands of €	Notes	31/12/2020	31/12/2019
Profit for the year	156,695	207,449
Adjustments for :
Depreciation and amortisation of non-current assets	124	31
Net gains / (losses) on financial assets	10	-120,490	-196,094
36,328	11,386
Acquisition of financial assets	10	-169,154	-197,044
Disposal of financial assets	10	148,603	160,522
Net change in loans and receivables	-2,301	1,681
Net change in borrowings and debts	-497	2,613
Bank borrowing	17	8,990	-20,216
Other changes	-	13
Net cash flows from operating activities	21,969	-41,045
Including :
Taxes paid	-27	-22
Interest paid	-344	-453
Interest received	13	134
Acquisitions / disposals of tangible and intangible assets	9	-46	-140
Net cash flows from investing activities	-46	-140
Transfer from / (to) deposits accounts	13	-5,000	15,000
Disposals / acquisitions of own shares	15	414	-15
Dividends paid	16	-29,725	-28,248
Net cash flows from financing activities	-34,311	-13,263
Net increase/ (decrease) in cash	-12,388	-54,447
Cash at the beginning of the year	13	51,366	105,812
Cash at the end of the year	13	38,978	51,366
Net increase / (decrease) in cash	-12,388	-54,446
The accompanying notes are an integral part of these consolidated financial statements.

Consolidated statement of changes in equity

for the year ended 31 December 2019 and 2020

in thousands of €

Notes	Capital and	Own	Legal	Other	Profit for	Attributable
share	shares	reserve	reserves	the period	to owners
premium	of the
Company

Equity at 31/12/2018	74,894	-104,982	5,989	1,403,571	16,009	1,395,481
Dividends paid by the Company	16	-	-	-	-28,248	-	-28,248
Allocation of profit	-	-	-	16,009	-16,009	-
Capital reduction	14, 15	-8,034	87,779	-	-79,745	-	-
Operations on own shares	15	-	-15	-	13	-	-2
Comprehensive income for the year	-	-	-	-	207,449	207,449
Equity at 31/12/2019	66,860	-17,218	5,989	1,311,600	207,449	1,574,680
Dividends paid by the Company	16	-	-	-	-29,725	-	-29,725
Allocation of profit	-	-	-	207,449	-207,449	-
Legal reserve reduction	-	-	-814	814	-	-
Operations on own shares	15	-	380	-	34	-	414
Comprehensive income for the year	-	-	-	-	156,695	156,695
Equity at 31/12/2020	66,860	-16,838	5,175	1,490,172	156,695	1,702,064

The accompanying notes are an integral part of these consolidated financial statements.

Notes to the consolidated financial statements

at 31 December 2020

Note 1 - General information

Luxempart S.A. ("the Company" or "Luxempart") is an investment company whose registered office is located at 12, rue Léon Laval, L-3372 in Leudelange. The Company was founded on 25 April 1988, under the name BIL Participations. The Annual General Meeting held on 15 September 1992 decided to change the Company's name to Luxempart S.A. The consolidated financial statements for the financial years ending on 31 December 2019 and 31 December 2020 incorporate the financial statements of the Company and its subsidiaries ("the Group") and the Group's share in associates. The Company is listed on the Luxembourg Stock Exchange and registered on the trade register under no. B27846.

Luxempart is primarily active in Luxembourg, Belgium, France, Italy and Germany; it actively manages a portfolio of listed and non-listed companies.

On 24 March 2021, the Board of Directors approved the consolidated financial statements as at 31 December 2020. The consolidated financial statements will be submitted for approval and publication authorisation during the Annual General Meeting to be held on 26 April 2021.

Note 2 - Consolidation principles, valuation rules, and accounting standards

Declaration of conformity

The consolidated annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

Framework for preparation and presentation of financial statements

The consolidated financial statements are presented in thousands of euros (€). The functional currency is the euro (€).

The consolidated financial statements are prepared based on the historical cost, with the exception of financial assets at fair value through profit of loss and financial assets held for trading, which are measured at fair value.

The valuation principles, methods and techniques are applied consistently within the Group.

The consolidated financial statements have been prepared for the accounting periods ended 31 December 2019 and 31 December 2020 are presented before allocation of the Company's profit. The allocation of profit for the year 2020 will be proposed at the Annual General Meeting on 26 April 2021.

Significant management judgments

Qualification as an « investment entity »

Luxempart's management has made significant judgments when determining that Luxempart qualifies as an investment entity. Luxempart has the following characteristics of an investment entity:

• • It has more than one investment;

• • It has more than one investor;

• • Being listed, Luxempart has investors that are not related parties;

• • It has ownership in form of equity or similar interests, mostly shares in the portfolio companies.

Luxempart's purposes is to invest its capital solely for returns from capital appreciation and investment income. To meet this objective, Luxempart has built a strategy on two pillars: the direct investments and the investment funds. The direct investments are made with a medium to long-term perspective to ensure to our portfolio companies to enjoy sufficient time to implement their strategy, execute their business plan and develop their potential. Each of our pillars has an exit strategy designed by the Board of directors, who is composed by a majority of independent members and who will take the decision in the best interest of Luxempart.

Fair valuation

In preparing the financial statements, the application of the accounting principles and methods described hereafter requires Luxempart's management to make assumptions and estimates that may have an impact on the amounts recognised in the statement of profit or loss, on the valuation of assets and liabilities on the statement of financial position, and on the information presented in the accompanying notes. Management makes these estimates and assumptions based on the information available on the date on which the consolidated financial statements are drawn up and may be required to exercise its judgment. By nature, valuations based on these estimates are subject to a number of risks and uncertainties before their future realisation. Consequently, the actual results of the operations in question may differ from these estimates and therefore have a material impact on the consolidated financial statements.

Consolidation principles

Qualifying as an investment entity, Luxempart does not consolidate its subsidiaries and does not apply IFRS 3 when it acquires control over another entity.

There is one exception to this treatment for subsidiaries providing services that relate to Luxempart's investment activities. These subsidiaries are fully consolidated.

Investments in subsidiaries not providing services that relate to Luxempart's investment activities and investments where Luxempart has significant influence or joint control are classified as Financial assets at fair value through profit and loss, in accordance with IFRS 9.

A list of non-consolidated subsidiaries is set out in note 20.

Subsidiaries that provides investment-related services (fully consolidated)

A subsidiary providing services that relate to investment activities means a company over which the Company has control. The Company has control when it:

• • has power over the entity,

• • is exposed, or has rights, to variable returns from its involvement with the entity,

• • has the ability to use its power over the entity to affect the amount of its returns.

These companies are fully consolidated as from the date the Group obtains the control and ceases when this control is lost.

Non-controlling interests are presented in equity on the consolidated statement of financial position, separately from "Equity attributable to the owners of the Company", and classified under "Non-controlling interests". Non-controlling interests in the Group's profit are also indicated separately on the consolidated statement of profit or loss and classified under "Non-controlling interests".

Expenses, income, assets, and liabilities of subsidiaries are fully incorporated into the consolidated financial statements. Transactions between companies of the Group, intercompany accounts, and unrealised profits on intragroup transactions are fully eliminated.

A list of the Group's subsidiaries is presented in note 20.

Transactions in foreign currencies

Transactions carried out in foreign currencies are converted into the functional currency at the exchange rate in force as at the transaction date. At the end of each reporting period, the monetary items in foreign currencies are converted at the rate of the last day of the financial year. Losses or profits from the realisation or conversion of monetary elements denominated in foreign currencies are recognised in the statement of profit or loss.

The following exchange rates were used for conversion of the consolidated financial statements. As at 31 December 2020, one euro is equal to:

US Dollar	1.2352 USD
Pound Sterling	0.8923 GBP
Swiss Franc	1.0816 CHF
Danish Crown	7.4435 DKK
Intangible fixed assets with a finite useful life

Intangible fixed assets with a finite useful life are valued at cost less accumulated amortisation and accumulated impairment losses. Amortisation is applied according to the straight-line method based on an estimate of the fixed asset's useful life and its possible residual value.

Intangible fixed assets are not subject to revaluations. The useful life is as follows:

Acquired software

3 years

Tangible fixed assets

Tangible fixed assets are measured at cost (including transaction costs) less accumulated amortisation and accumulated impairment losses. Depreciation is applied according to the straight-line method based on an estimate of the useful life of the said fixed asset. Costs related to maintenance are recognised in the statement of profit or loss.

Tangible fixed assets are not subject to revaluations.

IFRS consolidated financial statements at 31 December 2020 Luxempart S.A. 20
The estimated useful lives are as follows:
Facilities and transport equipment	3 - 5 years
Other tangible fixed assets, furnishings	10 years

Principle of impairment of tangible and intangible fixed assets

At the end of each reporting period, the Group reviews the carrying amount of tangible and intangible fixed assets in order to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. The recoverable amount is the higher value between the asset's fair value less costs of sell and its value in use. The value in use is the discounted value of estimated future cash flows expected from continued use of the asset.

Financial assets

Financial assets at fair value through profit or loss

Financial assets at fair value through profit and loss ("AFVPL") are initially measured at their acquisition cost.

They are stated at fair value and measured at the end of each reporting period. Unrealised capital gains and losses are recognised in the consolidated statement of profit or loss.

In the event of sale of an AFVPL, the difference between the net proceeds from the sale and the carrying amount is recognised in the consolidated statement of profit or loss under "Net gains/(losses) on financial assets". The transaction is recognised as at the settlement date.

Financial assets held for trading

Financial assets held for trading classified in current assets are assets acquired mainly with a view to be sold in the short term.

They are stated at fair value and measured at the end of each reporting period. Changes in fair value are recognised in the consolidated statement of profit or loss under "Net gains/(losses) on financial assets".

In the event of disposal of a financial asset held for trading, the difference between the net proceeds from the sale and the carrying amount is recognised in the consolidated statement of profit or loss under "Net gains/(losses) on financial assets". The transaction is recognised as at the settlement date.

Fair value of financial assets

Fair value measurements

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, on the principal or most advantageous market, at the measurement date.

Financial assets are measured at their fair value at the end of each reporting period.

Listed shares are measured based on their market price on the closing date.

Non-listed financial assets are measured based on valuation methods in line with the requirements of the International Private Equity and Venture Capital Valuation (IPEV). During the measurement of the fair value of the financial assets in non-listed companies, Luxempart adopts a multi-criteria approach and applies one or several of the methods described in the table hereafter.

Discounts may be applied to the values obtained by using each of these methods (discounts for illiquidity, for small company, etc.).

Assets categorised as level 3 assets are valued by Luxempart's investment managers on the basis of information received from the portfolio companies' management or by external evaluators. After being reviewed in detail by the business controller, these valuations are submitted to the Senior Investment Officers for approval. Finally, they are submitted to the Audit, Compliance and Risks Committee, which conducts a detailed analysis of the methods and assumptions used. They are ultimately approved by the Board of Directors when it approves the financial statements.

Fair value hierarchy

The Group uses a fair value hierarchy that reflects the significance of the data allowing valuations to be established.

• • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

• • Level 2: Data other than quoted market prices included within level 1 that are observable for the asset or liability, either directly (for example, prices) or indirectly (for example, elements derived from prices);

• • Level 3: Data about the asset or liability not based directly on observable market data.

When a level 1 asset is no longer listed, it is reclassified as a level 3 asset as soon as it is delisted. Where data on a level 2 asset is no longer observable on a market, that asset is reclassified as a level 3 asset at the period-end.

Level 3 fair value valuation techniques used

The following table provides information on the methods used according to IFRS 13 to determine the fair value of financial assets in private equity, as well as the valuation techniques and inputs used.

Valuation techniques	Use of the technique	Significant unobservable inputs	Relationship of unobservable inputs to fair value
Recent transaction multiple	Whenever a recent transaction has been completed involving an identical or similar asset	Discount for illiquidity and/or minority between 15% and 30%	The higher the discount, the lower the fair value
Market multiple	In the absence of recent transactions involving an identical or similar asset or in complement to another valuation technical	Discount for illiquidity and/or minority between 5% and 40%	The higher the discount, the lower the fair value
Discounted cash flows	In the absence of a comparable listed company or in addition to the market multiple method	The weighted average cost of capital is between 11% and 12% and the long-term revenue growth rate between 1% and 2%	The higher the growth rate, the higher the fair value	The higher the cost of capital, the lower the fair value	The higher the discounted cash flows, the higher the fair value
Revalued net asset	For private equity funds and holding companies as well as mature companies with assets recognised at fair value	Small cap discount and/or lack of market depth between 0% and 10%	The higher the discount, the lower the fair value

Loans and receivables

Loans and receivables are assets not listed on the stock exchange and repayable with fixed maturity. They originate when the Group either makes funds, assets, or services available. They are part of current assets insofar as their maturity does not exceed twelve months after the end of the reporting period (short term). Otherwise, they are part of non-current assets (long-term).

Loans and receivables are measured at amortised cost according to the effective interest rate method. In the event of a significant loss in value, loans and receivables are impaired through the consolidated statement of profit or loss.

Cash and cash equivalents, Bank deposits

Cash and cash equivalents include liquidities, sight deposits, and short-term deposits of less than three months, as well as highly liquid, easily convertible investments.

Cash deposits having a term above three months are presented under "Bank deposits" in the consolidated statement of financial position.

Capital

Issued shares are considered to be representative of the share capital. Issued equity is recognised at the proceed net of direct issue costs.

When a company of the Group acquires shares of the parent company, the price paid and the related incurred costs is recognised and deducted directly in equity at the moment when these shares are cancelled or transferred. When shares are transferred, the transfer price net of expenses incurred during this transaction and net of taxes is added to the equity.

Bank borrowings

Bank borrowings bearing interest are recognised at the amount of the cash obtained after deducting any direct expenses. Transaction expenses (if they are material) are amortised over the remaining life of the debt.

Current and deferred taxes

Income taxes are calculated according to the legal requirements. Advances paid are recognised as receivable and income tax expense (corporate income tax and municipal business tax) is estimated and recognised as provision.

Deferred taxes originate when a temporary difference appears between the taxable base of an asset or liability and the value at which it appears on the consolidated statement of financial position. Deferred tax is calculated by applying the tax rate as well as the provisions of the law in force at the time of the calculation.

Deferred tax assets are recognised for all deductible temporary differences (on tax loss carry forwards or other temporary differences) to the extent that it is probable that taxable profits will be available, against which those deductible temporary differences can be utilised, or when compensation is possible with existing deferred tax liabilities.

Provisions and other liabilities

Provisions are recognised once the Group has an actual obligation (legal or implied) resulting from past events that will probably generate an outflow of resources representative of economic benefits at an amount that can be reasonably estimated.

Other liabilities are recognised at their nominal value.

Segment information

Luxempart is active on two segments:

• • The "direct investments" that consists in taking direct participations in companies in the target geographical regions, which primarily consist of the Belux Region, France, Germany and Italy.

• • The "investment funds" that consists in the acquisition of shares in investment funds mainly active in private equity and venture capital.

A geographical segmentation is considered not relevant for Luxempart.

Income from ordinary activities

Luxempart and some of its subsidiaries provide services to other entities within the Group. These services are defined in a service agreement between the entities involved and are recognised based on the degree of progress.

Dividends received

The Group recognises dividends when they are received or when the right to receive payment is established. They result from the distribution of profits to holders of equity instruments in proportion to the rights that they hold in a category of securities making up the capital.

Consolidated statement of cash flow

Luxempart is a company whose purpose is the acquisition of shareholdings. The cash flows associated with this activity are classified as net cash flows from operating activities. Dividends received are included in the net income.

Net cash flows from investing activities are composed of flows related to tangible and intangible assets.

Net cash flows from financing activities are composed of transactions on equity (for example, dividends paid to the shareholders, transactions on own shares, capital increase and decrease...) and flows from and to bank deposits.

Changes in accounting methods

The new IAS/IFRS and their interpretations listed below, which entered into force in 2020, had no impact on the Group's financial statements.

•

•

Amendements to References to the Conceptual Framework in IFRS Standards Amendments to IAS 1 and IAS 8: Definition of Material

•

•

Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform Amendments to IFRS3 Businsess combinations

•

Amendments to IFRS 16 Leases Covid-19 Related Rent Concessions

Some standards, interpretations and amendments to standards published by the International Accounting Standards Board (IASB) but had not yet been applied within the European Union as at 31 December 2020. The Group has opted not to apply them early.

These standards are:

•

Amendments to IFRS 4 Insurance Contracts - deferral of IFRS 9

•

•

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform, Phase II IFRS 17 Insurance Contracts; including Amendments to IFRS 17

•

•

Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current Amendments to

• o IFRS 13 Business Combinations;

• o IAS 16 Property, Plant and Equipment;

• o IAS 37 Provisions, Contingent Liabilities and Contingent Assets

• o Annual Improvements 2018-2020

• policies

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting

•

Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting

Estimates

•

Proposed amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions beyond 20 June 2021

The Group doesn't anticipate a significant impact on the financial statements.

Note 3 - Segment information

The following table provides details of segmentation information. The Group considers that a geographical segmentation is not relevant.

Prior period comparable figures have been restated to reflect the new segmentation.

(*) All assets, liabilities, income and expenses that are not directly allocated to a segment are presented in "Others".

31 December 2020

Direct
in thousands of €	investments	31/12/2020
Investments activities
Dividends received	47,308	55	-	47,364
Net gains / (losses) on financial assets	101,779	21,200	-2,489	120,490
Profit on investments activities	149,088	21,255	-2,489	167,854
Ordinary activities
Services / recovery of services	-	-	2,433	2,433
Staff costs	-	-	-6,311	-6,311
Operating expenses	-	-	-6,362	-6,362
Depreciation and amortisation of non-current assets	-	-	-923	-923
Depreciation and amortisation of current assets	-	-	-544	-544
Profit on ordinary activities	-	-	-11,707	-11,707
Operating income	149,088	21,255	-14,196	156,146
Financial income	-	-	1,207	1,207
Financial expenses	-	-	-635	-635
Profit before tax	149,088	21,255	-13,625	156,718
Tax current	-	-	-24	-24
Profit for the year	149,088	21,255	-13,648	156,695

Investment funds

Others (*)

in thousands of € Non-current assets

Intangible and tangible fixed assets

Financial assets at fair value through profit and loss

Loans and receivables

Total non-current assets

Current assets

Loans and receivables Bank deposits

Cash and cash equivalents

Total current assets

Direct investments

- 1,187,615

62 1,187,677

- - - -

Investment funds

- 377,668

- 377,668

- - - -

Others

(*)

31/12/2020

381 34,383

381 1,599,666

-

62

34,764 1,600,109

5,212 5,212

85,000 85,000

38,978 38,978

129,190 129,190

Total assets

1,187,677

377,668

163,954

1,729,299

in thousands of € Total equity Non-current liabilities

Non-current provisions

Bank borrowing

Total non-current liabilities Current liabilities

Trade and other payables Total current liabilities

Total liabilities

Direct investments

-

- 19,169

19,169

- -

19,169

Total equity and liabilities

19,169

InvestmentfundsOthers (*)

• - 1,702,064

- -

31/12/2020 1,702,064

3,308 3,308

- 19,169

-

- - - -

1,710,130

3,308 22,477

4,758 4,758

4,758 4,758

8,066 27,235

1,729,299

31 December 2019

Direct
in thousands of €	investments	31/12/2019
Investments activities
Dividends received	19,669	90	-	19,758
Net gains / (losses) on financial assets	148,530	47,258	306	196,094
Profit on investments activities	168,199	47,348	306	215,852
Ordinary activities
Services / recovery of services	-	-	3,068	3,068
Staff costs	-	-	-6,118	-6,118
Operating expenses	-	-	-5,187	-5,187
Depreciation and amortisation of non-current assets	-	-	-101	-101
Profit on ordinary activities	-	-	-8,338	-8,338
Operating income	168,199	47,348	-8,032	207,514
Financial income	-	-	713	713
Financial expenses	-	-	-752	-752
Profit before tax	168,199	47,348	-8,071	207,475
Tax current	-	-	-25	-25
Profit for the year	168,199	47,348	-8,097	207,449

Investment funds

Others (*)

in thousands of €
Non-current assets
Intangible and tangible fixed assets	-	-
Financial assets at fair value through profit and loss	1,091,316	340,182
Loans and receivables	844	-
Total non-current assets	1,092,160	340,182
Current assets
Loans and receivables	-	-
Bank deposits	-	-
Cash and cash equivalents	-	-
Total current assets	-	-
Total assets	1,092,160	340,182
Direct	Investment
in thousands of €	investments	funds
Total equity	-
Non-current liabilities
Non-current provisions	-
Bank borrowing	10,179
Total non-current liabilities	10,179
Current liabilities
Trade and other payables	-
Total current liabilities	-
Total liabilities	10,179
Total equity and liabilities	10,179

Direct investments

Investment funds

Others (*)	31/12/2019
459	459
27,128	1,458,625
-	844
27,587	1,459,929
2,129	2,129
80,000	80,000
51,366	51,366
133,495	133,495
161,081	1,593,423
Others (*)	31/12/2019
-	1,574,680	1,574,680
-	3,342	3,342
-	-	10,179
-	3,342	13,521
-	5,222	5,222
-	5,222	5,222
-	8,564	18,743
-	1,583,244	1,593,423

Note 4 - Operating expenses

The following table provides details of operating expenses:

in thousands of €	2020	2019
External advisors and other similar fees	3,151	2,173
Taxes other than income tax	583	713
Directors allowances	808	728
Rental expenses	471	471
Insurance premiums	88	105
Administrative expenses and other operating expenses	1 261	997
Total	6,362	5,187
2019
5,646
260
212
6,118

The following table provides details of staff costs and benefits:

All expenses are recognised in the consolidated statement of profit or loss at the time of the transaction.

Note 5 - Staff costs

in thousands of €

2020

Remuneration, wages and bonuses 5,793

Social security contributions 308

Supplementary pension plan 210

Total

6,311

The Group has opted for a defined-contribution pension plan and pays annual contributions to a separate entity (Foyer Vie). The Group will have no legal or implied obligation to pay additional contributions if said entity does not have enough assets to cover the benefits corresponding to the services rendered by staff members during the current and prior periods.

Premiums are paid annually and recognised directly in the consolidated statement of profit or loss.

The Group offers defined-contribution pension plans to its employees. Luxempart pays contributions corresponding to a percentage of the payroll expenses into the retirement scheme in order to fund these benefits. The only obligation with regard to the retirement scheme involves paying these contributions which are recognised in staff costs.

The following table indicates the average number of employees over the year:

Category	2020	2019
Managers	6	6
Support staff	13	10
Total	19	16
Stock option plan for management

In 2009, Luxempart established a stock option plan for members of management. For financial year 2020, the Board of Directors granted 99,000 Luxempart options with an exercise price of € 47.73 per share and 120,100 options with an exercise price of € 46.00 per share.

The fair value of the options is calculated according to a matrix using a Monte Carlo analysis. No expense has been recognised in the consolidated statement of profit or loss for 2020.

The table below summarises the movements of the year:

Total

Number of options issued as at 01/01/2020	313,728
Options exercised in 2020	-13,750
Options issued in 2020	219,100
Number of options issued as at 31/12/2020	519,078
The table below provides the plan's characteristics:
Share price
Exercise	when
Tranche	Year	price	Exercise period	allotted
Tranche 1	2009	21.20	May 2012 - May 2019	22.00
Tranche 2	2010	23.99	May 2013 - May 2020	22.51
Tranche 3	2011	23.64	May 2014 - May 2021	22.84
Tranche 4	2012	22.50	May 2015 - May 2022	24.94
Tranche 5	2013	27.40	Sept 2017 - Sept 2021	27.80
Tranche 6	2014	31.20	Dec 2018 - Dec 2022	31.51
Tranche 7	2015	34.51	Jul 2019 - Jul 2023	33.79
Tranche 8	2016	33.99	Oct 2020 - Oct 2024	39.78
Tranche 9	2017	52.61	Aug 2021 - Aug 2025	50.00
Tranche 10	2018	56.50	June 2022 - June 2026	47.80
Tranche 11	2019	52.50	May 2023 - May 2027	53.00
Tranche 12	2020	47.73	April 2024 - April 2028	49.00
Tranche 13	2020	46.00	Januar 2025 - Januar 2029	49.00
Dividend growth	5.00%
Historical volatility of share price	26.69%
Discount rate	-0.35%

As at 31 December 2020, the provision relating to the stock option plan amounts to € 1,061 thousand (2019: € 1,061 thousand) and is recognised in "non-current provisions" in note 18. As at 31 December 2020, 118,328 options can be exercised.

Note 6 - Dividends received

The following table breaks down the dividends received during the year:

in thousands of €	2020	2019
Foyer	5,648	10,112
Kauman & Broad	1,033	1,787
Atenor	1,387	1,321
Mehler	38,530	-
SES	593	4,522
RTL Group	-	625
Other	173	1,392
Total	47,364	19,758

Note 7 - Financial income and expenses

a. Financial income

Interest and similar income are mainly composed of interest received on deposit accounts with credit institutions and on loans granted to subsidiaries. As at 31 December 2020, they amount to € 1,207 thousand (2019: € 713 thousand). An analysis of the financial risk relating to interest is detailed in note 25.

b. Financial expenses

in thousands of €	2020	2019
Bank expenses and interest expenses	478	622
Other expenses	158	131
Total	635	752

Bank expenses and interest expenses primarily include interest paid on short-term cash advances and negative interest paid on cash at bank. The other expenses primarily include foreign exchange losses on current assets.

Note 8 - Current and deferred tax expenses

The Group recognised the current tax expenses on the corporate profits as follows:

a. Details of taxes

in thousands of €
Corporate income tax (IRC)
Deferred taxes on revaluation of available-for-sale financial assets
Income tax expenses (b.)	0	0
Wealth tax	24	25
Total	24	25
b. Reconciliation of income tax expenses to the accounting profit
in thousands of €	2020	2019
Profit before tax	156,695	207,449
Company's average tax rate	26.76%	24.94%
Theoretical tax expense	41,931	51,738
Restated deferred taxes	-	99
Effect of non-taxable capital gains	-32,131	-48,906
Effect of non-taxable dividends	-12,674	-4,678
Other tax adjustments	2,874	1,747
Total tax expense	-0	0

2020 - -

2019 - -

Note 9 - Intangible and tangible fixed assets

The movements in intangible and tangible fixed assets that occurred during financial years 2019 and 2020 are as follows:

Cost

in thousands of € as at 31/12/2018

Acquisitions and disposals as at 31/12/2019

Software26 24 49 12 61

Office andcomputer

Acquisitions as at 31/12/2020

equipment 403 116 519 33 552

Vehicles

244 673

- 140

244 812

- 46

244

858

Depreciation

in thousands of €

Office andcomputer

Software

as at 31/12/2018 26

Depreciation 0

as at 31/12/2019 26

Depreciation 5

as at 31/12/2020

31

equipment	Vehicles	Total
129	108	263
32	58	90
161	166	353
63	56	124
224	222	477

Carrying amount

in thousands of €

Office andcomputer

Software

as at 31/12/2019 23

as at 31/12/2020 31

equipment	Vehicles	Total
358	78	459
328	22	381

Note 10 - Financial assets at fair value through profit and loss

The following tables provide details of changes in financial assets at fair value through profit and loss in 2019 and 2020.

Financial assets at fair

in thousands of €
Fair value as at 31/12/2018	51,216
Asset classification transfer	-51,216
Acquisitions	-
Disposals	-
Net gains/(losses) on financial assets	-
Fair value as at 31/12/2019	0
Acquisitions	-
Disposals	-
Net gains/(losses) on financial assets	-
Fair value as at 31/12/2020	0

Financial assets held for	value through profit and
trading	loss	Total
1,174,794	1,226,010
51,216	-
197,043	197,043
-160,522	-160,522
196,094	196,094
1,458,625	1,458,625
249,388	249,388
-228,838	-228,838
120,490	120,490
1,599,666	1,599,666

Financial assets at fair value through profit and loss ("AFVPL") are classified into two segments, direct investments and investment funds. During the 2020 financial year, the Group invested:

• • € 201,887 thousand in the direct investments mainly in Enoflex, SNP, Atenor and the listed assets of Luxempart PIPE that was merged into Luxempart.

• • € 47,501 thousand in the investment funds activity, mainly in Capital at Work and a new bonds portfolio.

The Group sold a part of its shares in SES, Kaufman & Broad and Zooplus generating a realised gain of € 2,130 thousand.

Luxempart PIPE was merged into Luxempart as at 1st January 2020. The assets LPKF, Low & Bonar and Nanogate were sold and generated a realised gain of € 7,937 thousand. These net capital gains realised in 2020 correspond to the value increase since 31

December 2019.

The net gains recognised for 2020 on the Direct investments is € 80,904 thousand (principally on Foyer, Zooplus and Assmann) and € 20,179 thousand on the investment funds.

The carrying amount of the AFVPL is their fair value.

Assets at fair value through profit and loss are categorised as level 1, level 2 and 3 assets.

Fair value hierarchy of financial assets

in thousands of €	Level 1	Level 2	Level 3	Total
Fair value as at 31/12/2018	312,095	-	913,915	1,226,010
Acquisitions	51,774	83,715	61,554	197,043
Disposals	-122,692	-	-37,829	-160,522
Net gains/(losses) on financial assets	-5,954	25,877	176,171	196,094
Fair value as at 31/12/2019	235,223	109,592	1,113,810	1,458,625
Level transfer	-	6,493	-6,493	-
Acquisitions	155,090	-	94,298	249,388
Disposals	-105,132	-83,715	-39,990	-228,838
Net gains/(losses) on financial assets	67,221	-27,810	81,079	120,490
Fair value as at 31/12/2020	352,402	4,560	1,242,704	1,599,666
There was one transfer between levels of fair value in 2020.

Luxempart PIPE was merged into Luxempart, therefore its assets are shown as an acquisition in the level 1.

Level 1 financial assets consist of listed investments, mainly in Zooplus, Atenor, Kaufman & Broad, PIPE assets, and Capital at Work, totalling € 352,402 thousand.

Level 2 financial assets consist of holding companies holding listed investments,

Level 3 financial assets consist of private-equity investments, mainly in Foyer, Armira Holding, Mehler, Stoll, ESG and Luxempart Capital Partners SICAR SA.

Level 1 financial assets risk analysis

An analysis of the sensitivity of the listed assets is provided in the table below. A range of variation of -10% to +10% was applied to the valuation as at 31 December 2020. This range of variation is relevant and reasonably possible.

in thousands of €
Share price sensitivity	-10%	0%	10%
Fair value	317,162	352,402	387,643
Impact through profit and loss	-35,240	-	35,240

Level 1 for financial assets

The Group's sensitivity to the stock markets remained virtually unchanged compared with the previous year. The market risk is detailed in the note 25.

Level 2 financial assets risk analysis

A range of variation of -10% to +10% was applied to the valuation as at 31 December 2020. This range of variation is relevant and reasonably possible.

in thousands of €

Level 2 for financial assets

Sensitivity	-10%	0%	+10%
Fair value	3,392	4,560	5,727
Impact through profit and loss	-1,168	-	1,168
Level 3 financial assets risk analysis

The following table sets out the impacts of changes in non-observable data on the fair value of financial assets. The information on the methods used to determine the fair value of these assets (including the valuation techniques and input data used) is provided in note 2.

in thousands of €	Level 3 for financial assets
Sensitivity	-10%	0%	+10%
Fair value	1,184,746	1,242,704	1,306,100
Impact through profit and loss	-57,958	-	63,396

At 31 December 2020, the valuation methods have not significantly changed since 2019.

Note 11 - Non-current loans and receivables

The non-current loans and receivables consist of a loan receivable within more than one year granted to a portfolio company. As at 31 December 2020, it amounts to € 62 thousand (2019: € 844 thousand). The fair value of the non-current loans and receivables does not differ significantly from their carrying amount.

Note 12 - Current loans and receivables

The following table provides details of the current loans and receivables:

in thousands of €	2020	2019
Trade receivables	1,092	1,613
Tax receivables	3,816	362
Accrued interest not yet due	237	101
Other receivables	68	53
Total	5,212	2,129

As at 31 December 2020, Luxempart has a claim of € 3,461 thousand against the German tax authorities.

The fair value of short-term receivables does not differ significantly from their carrying amount. The maturity of current loans and receivables is less than one year.

Note 13 - Bank deposits, cash and cash equivalents

The following table provides details of the bank deposits, cash and cash equivalents:

in thousands of €	2020	2019
Bank deposits	85,000	80,000
Cash and cash equivalents	38,978	51,366
Total	123,978	131,366

Bank deposits of the Group are placed on accounts with a maturity between 18 to 36 months. Deposits bear interest at variable rates in force on the market. An analysis of the liquidity risk is provided in note 25.

Note 14 - Capital and share premium

a. Capital and share premium

in thousands of €	2020	2019
Subscribed capital	51,750	51,750
Share premium	15,110	15,110
Total	66,860	66,860
The authorised capital amounts to € 90,000 thousand.
b. Capital management

As at 31 December 2020, subscribed capital amounts to € 51,750,000 and is represented by 20,700,000 fully paid-up shares without designation of nominal value. Each share entitles the holder to a dividend and a vote during General Meetings.

There are no other share classes or options or pre-emptive rights entitling holders to the issuance of shares of another class that could have a dilutive effect on the number of shares issued.

The Company's share capital may be increased from its current amount to € 90,000,000 through the creation and issuance of new shares without designation of nominal value, with the same rights and benefits as existing shares.

The Board of Directors has the authorisation, until the 2021 Annual General Meeting, to buy back own shares. The accounting par value of the shares bought back, including own shares already previously acquired, may not exceed 30% of the subscribed capital. This own share buyback policy is intended to improve the security's liquidity on the stock exchange, grant shares to managers, cancel the own shares through a decision of the Extraordinary General Meeting, or transfer these shares to a new shareholder.

In view of the Group's liquidity, all new investments are funded only from the Company's equity. For investments in private equity, external debt may be used at the level of the investment. The debts contracted by the Group are intended to hedge against foreign exchange risk (see note 17).

Note 15 - Reserves and own shares

a. Legal reserve

From the net profit of the statutory accounts under Luxembourg GAAP, 5% must be deducted annually to build up the reserve fund required by Luxembourg law. This deduction will no longer be mandatory when the reserve fund reaches one-tenth of the share capital.

The legal reserve may not be distributed to the shareholders except in case of dissolution of the Company.

As at 31 December 2020, the legal reserve amounts to € 5,175 thousand (2019: € 5,989 thousand).

b. Other reserves

in thousands of €	2020	2019
Consolidated reserves	1,480,726	1,302,154
Special reserve	9,446	9,446
Total	1,490,172	1,311,600
Consolidated reserves

The consolidated reserves are composed of the income accumulated by the subsidiaries since their first consolidation, as well as some movements related to consolidation entries. These reserves also include the IFRS adjustments of companies within the consolidation scope.

Special reserve

As at 31 December 2020, the special reserve includes the untaxed capital gains from disposal on participations. These capital gains, recognised in the equity, result from application of Article 54 of the income tax law and are to be reinvested within two years following the financial year of the disposal. If these gains are not reinvested within this two-year period, they will be reversed through the consolidated statement of profit or loss and subject to tax.

c. Own shares and reserve for own shares

Number of shares issued

Number of own shares

Number of outstanding shares

As at 31/12/2018	23,913,594	3,843,420	20,070,174
Capital reduction	-3.213.594	-3.213.594	-
Acquisition and disposals	-	-6,398	6,398
As at 31/12/2019	20,700,000	623,428	20,076,572
Acquisition and disposals	-	-13,750	13,750
As at 31/12/2020

20,700,000

609,678

20,090,322

As at 31 December 2020, Luxempart holds 609,678 own shares (2019: 623,428 own shares), with the reserve for own shares amounting to € -16,838 thousand (2019: € -17,218 thousand).

The weighted average number of shares outstanding as at 31 December 2020 is 20,084,332 (2019: 20,075,026).

Note 16 - Dividends paid

A dividend of € 1.48 gross per share was paid during the first half of 2020 in respect of the 2019 financial year, giving a total dividend of € 29,725,167 (2019: € 1.407 gross per share, giving a total dividend of € 28,247,737).

The consolidated financial statements as at 31 December 2020 do not include the dividend that will be proposed to the Annual General Meeting of 26 April 2021. It was not recognised as a liability in the 2020 financial statements.

The Board of Directors proposes an ordinary dividend of € 1.60 gross per share. The payment terms of the dividend will be communicated during the Annual General Meeting of 26 April 2021.

Note 17 - Bank borrowings

As at 31 December 2020, the bank borrowings stand at € 19,169 thousand (2019: € 10,179 thousand) and result from the acquisition of shares in an investment company in CHF. This loan in CHF has been issued in the same currency as the asset in order to hedge any possible currency effects on the profit of the Group. In 2020, the loan in GBP was fully repaid.

These bank borrowings are guaranteed by savings accounts contracted for this purpose. They will be repaid when the underlying financial assets will be sold. These borrowings bear interest at a rate of 3-month Libor +0.9%.

The fair value of these liabilities does not differ significantly from their carrying amount. Management of foreign exchange risk and sensitivity analysis are described in note 25.

Note 18 - Non-current provisions

The following table provides details of the non-current provisions:

in thousands of €	2020	2019
Tax provisions	2,221	2,215
Other provisions	1,087	1,127
Total	3,308	3,342

The tax provisions relate to income taxes, municipal business taxes and wealth tax for 2020 and previous years.

The "Other provisions" item includes the € 1,061 thousand provision for stock options (2019: € 1,061 thousand). The characteristics of the stock option plan are detailed in the note 5.

Note 19 - Current liabilities

in thousands of €	2020	2019
Tax and social debts	588	424
Trade liabilities	3,982	3,753
Other debts	188	1,045
Total	4,758	5,222

Tax and social debts include amounts owed to the tax authorities for social security contributions. Trade liabilities and other debts are mainly composed of amounts due to the Group's suppliers and service providers, as part of its activities. They also include a debt for bonus.

The fair value of current liabilities does not differ significantly from their carrying amount.

Note 20 - List of subsidiaries

a. Subsidiaries providing investment related services, fully consolidated

The following table lists all subsidiaries providing fully consolidated investment related services to the Company:

Subsidiary

Luxempart Invest S.à.r.l

Luxempart Ireland Limited In liquidation Luxempart Management S.à.r.l

Bravo Capital S.A.

Luxembourg Dublin Luxembourg Luxembourg

100% 100%

100% 100%

100% 100%

80% 80%

Given that Luxempart meets the criteria laid down in Article 70 of the Luxembourg Law of 19 December 2002, its Luxembourg subsidiaries are exempt from the requirements relating to the publication of statutory annual accounts.

b. Non-consolidated subsidiaries

Percentage	Percentage
Subsidiary	Place of incorporation	held in	held in
31/12/2020	31/12/2019
Indufin NV	Belgium	40.00%	40.00%
M-Sicherheitsholding GmbH (Mehler)	Germany	30.00%	30.00%
Pescahold S.A.	Luxembourg	100.00%	100.00%
Pryco GmbH (Prym)	Germany	55.60%	55.60%
Foyer S.A.	Luxembourg	27.94%	27.94%
E-Sicherheitsholding GmbH (ESG)	Germany	27.60%	27.60%
ForAtenoR S.A.	Belgium	25.00%	25.00%
DMB2 GmbH & Co (Stoll)	Germany	32.80%	32.80%
Assmann holding GmbH	Germany	50.00%	50.00%
Luxempart PIPE S.à.r.l **	Luxembourg	-	100.00%
LuxCo Invest S.à.r.l **	Luxembourg	83.33%	83.33%

Percentage	Percentage
Subsidiary	Place of incorporation	held in	held in
31/12/2020	31/12/2019
Luxempart Capital Partners SICAR S.A. **	Luxembourg	100.00%	100.00%
Quip Holding GmbH	Germany	51.00%	51.00%
Bravo Capital Partners SCA RAIF**	Luxembourg	100.00%	100.00%
Arbo S.p.a	Italy	40.00%	40.00%
Metalworks S.p.a	Italy	60.00%	60.00%
Bravo Luxury S.à.r.l (Vesta)	Italy	70,00%	-
Luxempart German Invest S.A. **	Luxembourg	100,00%	99.99%
EduPRO GmbH	Austria	60.00%	60.00%
Arwe Mobility Holding	Germany	50.00%	50.00%
Rimed AG	Switzerland	29.30%	29.30%
Rattay Group GmbH	Germany	39.90%	39.90%
WDS GmbH	Germany	44.00%	44.00%
Luxempart German Invest II S.à.r.l **	Luxembourg	100,00%	99.99%
Novotergum GmbH	Germany	43.80%	43.80%
Luxempart French Investment S.à.r.l **	Luxembourg	100.00%	100.00%
D'Alba Invest S.à.r.l **	Luxembourg	99.22%	99.22%
Indufin Capital Partners S.A. SICAR **	Belgium	50.00%	50.00%
Decoscent S.A. (Baobab)*	Belgium	61.50%	61.50%
Kyotec Group *	Luxembourg	-	32,00%
Axithon S.A. (Axi)*	Belgium	51.59%	51.59%

This table lists all entities under the Company's control or significant influence which are measured at fair value through profit or loss (note 10), as well as their own controlled or under influence subsidiaries. Luxempart neither provided nor committed to provide financial or other support to any of its non-consolidated subsidiaries.

* The percentages indicated are the percentages of ownership by Indufin Capital Partners, which is held at 50% by Luxempart Capital Partners SICAR.

** These entities are investments entities, such as defined by IFRS 10.

Note 21 - Main off-balance sheet rights and commitments

The Group has invested in investment funds through its subsidiary Luxempart Capital Partners SICAR. As at 31 December 2020, € 110,048 thousand remain uncalled.

These funds are mainly Ekkio funds (€ 28,232 thousand), Quadrille Technologies funds (€ 20,454 thousand), Faso (€ 13,340 thousand), Apax (€ 14,625 thousand), Committed Advisors (€ 12,525 thousand) , CGS V Feeder (€ 12,000 thousand).

Bravo Capital Partners RAIF has recognised an uncalled capital amounting to € 23,459 thousand to be paid by Luxempart Capital Partners SICAR.

As at 31 December 2020, the commitment for Armira I and Armira II is € 34,198 thousand.

Note 22 - Directors' allowances and executive management remuneration

in thousands of €	2020	2019
Directors allowances and attendance fees	986	891
Management remuneration	3,743	3,267
Total	4,729	4,158

Directors' allowances and attendance fees as well as executive management remuneration for 2020 is recognised in "Operating expenses" (note 4) and in "Staff costs" (note 5). The remuneration of executive officers includes a provision for bonus payable in 2021, relating to 2020.

Note 23 - Remuneration of the Réviseur d'entreprises agréé

The following table shows fees paid to the Réviseur d'entreprises agréé. Audit fees cover the review of the interim consolidated financial statements as at 30 June and the audits of the statutory and consolidated financial statements as at 31 December. They do not cover work on subsidiaries' financial statements, which, where applicable, are audited by other auditors. The audit fees are recognised in "Operating expenses" (note 4).

in thousands of €	2020	2019
Audit fees relating to the statutory and consolidated accounts	111	107
Total	111	107

The Réviseur d'entreprises agréé of the company is also the Réviseur d'entreprises agréé of some subsidiaries (Luxempart Capital Partners, Indufin Capital Partners, Bravo Capital Partners, Luxempart German Investments II). The remuneration of the Réviseur d'entreprises agréé for these subsidiaries is € 92 thousand (2019: € 95 thousand). During the year, the Réviseur d'entreprises agréé provided, in addition to the legal audit services, other services (tax advisory, training…) for an amount of € 5 thousand (2019: € 1 thousand).

Note 24 - Related parties

Income resulting from services provided recognised in the statement of profit or loss exclusively comes from services provided by Luxempart and billed to its subsidiaries and investments.

The Foyer Assurances group rebills, on a quarterly basis, office rental expenses and other related expenses, insurance expenses, and miscellaneous services for a total of € 614 thousand (2019: € 754 thousand).

Two members of Luxempart's Group Executive Committee are not employee of the Group and invoices consulting fees to the Group. The fees amount to € 550 thousand for 2020 (2019: 313 thousand).

Transaction fees paid to Capital at Work, a subsidiary of the Foyer Group, amount to € 20 thousand (2019: € 23 thousand) and are included in "Interest and similar expenses" (note 7).

Note 25 - Financial risks

Management of market risk

The Group's major risk is the exposure of its financial assets to market risk. The risk management policy is established and controlled by the Group Executive Committee, the Board of Directors, and the Audit, Compliance and Risks Committee.

Market risk is the risk of loss in value of financial assets. The main risks and uncertainties to which the Group is exposed relate to the performance of the financial markets (stock markets, comparable transactions, market multiples, etc.). Luxempart does not systematically sell its participations based on financial market volatility. In principle, the Group does not use market risk hedging instruments. It nevertheless regularly monitors changes in the value of its investments.

The investments in companies listed on the stock exchange (mainly stock exchange of Luxembourg, Brussels and Paris) represent 20.8% as at 31 December 2020 of the Net Asset Value (2019: 14.9%).

The table below presents the investment by asset class based on the total financial assets (excluding loans and receivables):

2020	2019
Investment in listed companies	22.1%	16.1%
Investment in private equity	77.9%	83.9%
Total	100.0%	100.0%
A sensibility analysis of the listed financial assets is presented in the notes 10.
Management of interest rate risk

The average duration of the placement of fixed-term deposits varies between 35 days and 36 months, and the average rate over 2020 is zero. The analysis below presents, at a constant cash position, the pre-tax impacts that the increase or decrease in interest rates would have on the Group's profit at 31 December 2020.

in thousands of €	2020	2019
Variation of + 50 basis points	638	830
Variation of - 50 basis points	-638	-830
Management of foreign exchange risk
The Group invests mainly in positions in the Group's functional currency (EUR).

Foreign currency positions in non-current assets are hedged against foreign exchange risk. The assets are acquired through a loan denominated in the foreign currency (note 17).

An investment recognised as financial assets at fair value through profit or loss is in US dollars. This position is not hedged against foreign exchange risk. It represents 1.4% of the financial assets at fair value through profit or loss. The change in the exchange rate has not a significant effect on the change in fair value.

Management of credit risk

Credit risk is the risk that contracted third parties do not meet their commitments towards the Group during transactions with it. Credit risk lies not at the Luxempart level but at the level of the investments, which are responsible for managing their credit risk according to the specific terms appropriate for their situation.

Luxempart has granted loans to companies of the Group totalling € 62 thousand as at 31 December 2020 (2019: € 844 thousand).

If necessary, Luxempart may grant guarantees to companies in which it has invested.

Luxempart minimises its risk exposure by entering into commitments with financial institutions with a high rating. In order to minimise any concentration risk, Luxempart diversifies its exposure by several banking institutions, with a maximum to 5% of equity.

During 2020, there has been no significant change in relation to the credit risk management.

Management of liquidity risk

As at 31 December 2020, Luxempart has a high level of liquidity. Luxempart has taken out currency loans as instruments to hedge foreign exchange risk following the acquisition of assets. These loans are secured by deposit accounts of the same amount in euros (see note 17). The liquidity default risk is low.

Note 26 - Significant event

The Covid pandemic caused a worldwide crisis since the first quarter of 2020 with strong negative impacts on population and economies. The successive waves with associated restriction measures, the more aggressive virus mutations and the slow roll-out of vaccinations in Europe prolongs the crisis and delays the social and economic recovery.

Our investment and management team responded swiftly and prudently such as to support our portfolio lines and protect our employees and their families. It appears that our companies turned out to be resilient and well prepared for the after Covid world. Indeed, not all sectors have been impacted similarly by the pandemic and the diversity f our portfolio as well as the strength of our main lines allowed us to increase our net asset value despite the economical headwind.

Note 27 - Events after the reporting period

During the first months of 2021, Luxempart closed two further new investments, increased its holdings in several lines and sold some investments.

The operations are the following:

• • Investment of € 25,000 thousand in Sogetrel, a French company active in the telecom, IP security and digital solutions market through smart network and services, with a further commitment of ca. € 15 million for follow-on investments.

• • Agreed investment of € 25,000 thousand in iM Global Partners, a French worldwide asset management network with stakes in independent asset managers and a strong distribution force providing its clients access to the best asset management strategies.

• • In Schaltbau, commitment to subscribe up to 20% of the € 60 million mandatory convertible bond issue such as to hold within the acting in concert group on anchor stake above 20%, Schaltbau being a leading German supplier of systems and electromechanical components in the railway and capital goods industry.

• • Agreed sale of our 15% stake in NMC (via Indufin Capital Partners SICAR) realising a 15% IRR.

• • Sale of Kaufman & Broad and RTL for € 31,931 thousand.

Management Report

Management Report ...................................................................................................................................................... 1

What we stand for .......................................................................................................................................................... 2

Message to our shareholders ......................................................................................................................................... 3

Our investment strategy ................................................................................................................................................. 6

One Team ...................................................................................................................................................................... 7

The year at a glance ...................................................................................................................................................... 8

Activity report of the Board of Directors ........................................................................................................................ 12

Evaluation of the equity and summary of the financial statements ........................................................................... 12

Internal evolution ...................................................................................................................................................... 18

Outlook ..................................................................................................................................................................... 19

Main risks and uncertainties ..................................................................................................................................... 19

Other information ......................................................................................................................................................... 20

Research and development .................................................................................................................................. 20

Own shares ........................................................................................................................................................... 20

Branches ............................................................................................................................................................... 20

Transparency ........................................................................................................................................................ 20

Reconciliation between IFRS and the Portfolio activity report ............................................................................... 21

What we stand for

LUXEMPART is a Luxembourg listed investment company with more than 25 years of existence, an estimated net asset value of € 1.7 billion as of end of 2020. The core team of 25 professional and support staff is based in Luxembourg and actively covers the target markets of France, Benelux, DACH region and Northern Italy.

Luxempart's investment strategy is built on two pillars:

• • Direct Investments: minority and majority stakes in mid-sized companies in Continental Europe, either privately held (private equity) or listed.

• • Investment Funds: indirect investment activity via third-party private equity funds in venture, growth capital and buy-outs, both in Europe and increasingly worldwide.

Luxempart has stable and involved family shareholders with industrial background who promote:

For their shareholders

• • A resilient and diversified portfolio of growing companies

• • A steadily increasing dividend

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

• • An access to top-class private equity funds operating world-wide

• • A first class governance of a listed company

For their business partners

• • Tailor-made solutions for family businesses and managers

• • An entrepreneurial and industrial mindset

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

• • A flexible investment horizon with a true long-term approach, aligned on Luxempart management remuneration scheme, based on long-term value creation

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

Direct investments are realised along the following guidelines

• • Investment amounts from € 25 to € 100 million (in equity)

• • Investment in privately held and listed companies

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

• • Supportive, hands-on approach

• • No sector focus but affinity for financial services & insurance, telecommunication, security, healthcare and education.

Luxempart shareholders and management believe in value creation through patient involvement and a shared vision with our partners. We foster an ambitious team spirit based on a truly European work environment and empowering team members early on.

Our track record over the last twenty-five years has been positive with a group IRR above 15% and with a regular dividend increase.

Message to our shareholders

Dear Shareholders,

2020 has been an extraordinary year. The world was taken by surprise by the Covid pandemic. In many countries, we have seen unprecedented lockdowns for several months. Governments reacted quickly. Sanitary measures and extensive testing were put in place to slow down the spreading of the virus. Central banks provided sufficient liquidity and markets recovered rather quickly and even closed in positive territory at year end.

In a record time, vaccines were developed and approved. Today, we see massive vaccination campaigns all around the world and we foresee a light at the end of the tunnel in 2021.

Uncertainty remains as the Covid crisis is not yet over, but we see first take-aways for our industry:

This crisis has accelerated trends of digitalisation. For instance, who would have thought it possible that in such short amount of time millions of people would be able to switch to home office and home schooling. Our ways of working have evolved and our workplaces will have to adapt. Traditional retail has suffered and e-commerce comes out strong and will most probably continue its acceleration. Sectors such as travel, tourism and hospitality have been hit hard and might need several years to fully recover to pre-crisis levels.

Luxempart's portfolio has resisted well. After a decrease in value mid-year, we close the year with a growth in our Net Asset Value (NAV) of 8.0%, which reaches €1.7bn. We have generated an annual NAV increase per share of 10.0% when reintegrating the dividend we paid in April 2020. This performance compares favourably to the MSCI Europe Mid Cap Net Return Index, which we consider to be our benchmark (+3.35% in 2020). This is in part related to the turn-around of global financial markets, but mostly due to significant resilience of the portfolio and little exposure to hard hit sectors. More than 50% of our companies have grown sales in 2020 and even more than 60% have improved results this year.

Despite these very sound fundamentals of our companies, crisis brings about need for change and transformation. We believe this is an opportunity for private equity, as it has shown its ability in the past to actively help companies to rethink themselves and seize opportunities, thanks to vast financial resources and professional teams.

As mentioned in our message to you last year, a transition period has opened for your company. Even though it will last for some time, first positive results have been achieved:

• • Two new managing directors were nominated in April 2020 and as in the coming 12 months a further member of the executive team will retire, there will be further change.

• • Management has launched the strengthening of our investment teams in direct investment and investment funds to support our updated strategy by increasing deal sourcing and execution.

• • Adaptation of our investment funds strategy which will allow us to expand our venture capital, growth and buyout fund portfolio to the US and Asia.

• • Streamlining of our direct investment portfolio to constitute a more concentrated portfolio of larger lines in private equity and selected listed lines.

• • This revised investment strategy was implemented without delay and resulted in sustained investment in attractive growth sectors and solid divestment activity in 2020: your company has invested € 112m in 2020 in both strategies and taken the firm commitment to invest € 40m in an additional transaction that was closed in early 2021. The streamlining of the portfolio has generated sales proceeds of € 149m at returns in line with our long-term objective.

We approach 2021 with a cautiously optimistic stance. Macro-economic environment should improve strongly, admittedly after a very difficult year 2020. Our portfolio companies are faring well and seize new growth opportunities offered by the improving overall environment. Investment activity, under the impetus of the economic recovery and improving capital markets should remain sustained. We will nevertheless remain selective and cautious since the expected scenario heavily relies on the acceleration of the vaccination campaigns and the progressive return to normality of our economies. Our objective is to invest at least € 150m in new direct investments and to take up ca. € 75m new commitments in the investment funds activity, deployed along the revised strategy for this segment. In parallel, we will pursue the effort to streamline our portfolio and expect a number of sales processes to succeed in 2021. Such exits will keep our cash position at a high level, but we are confident that with our growing investment team and strengthened fund-of-fund approach, we will be able to deploy our capital wisely.

Luxempart has been a front runner of private equity in Luxembourg for more than 25 years. We are pleased to see that Luxembourg as a location has continuously grown to become an attractive European platform for private equity and is able to attract more and more front and middle office activities as well as investment teams. This significantly contributes to support and develop the financial ecosystem related to the asset management industry, thereby starting to create a cluster effect that will help our national economy to grow sustainably in the future.

Based on the positive results of 2020, the Board of Directors proposes to shareholders the payment of a gross dividend of €1.60 per share (€ 1.36 net) compared to €1.48 gross per share (€1.26 net) in 2020, an increase of 8% over prior year. As a reminder, Luxempart has maintained since 1992 a constant dividend policy, consisting in growing the dividend by ca. 10% p.a. on average.

We would particularly like to thank all the members of the Board of Directors and the Luxempart team for their great dedication in these exceptionally difficult circumstances. These results would not have been achieved without the unanimous support and commitment of all parties involved.

We also thank you for your continuing support and loyalty and assure you that all energies within the Group are focused on the sustainable development of your Company and on solid value creation of our investment portfolios.

François Tesch	Jacquot Schwertzer	John Penning	Olaf Kordes
Executive Chairman	Vice-Chairman	Managing Director	Managing Director

"As Executive Chairman, my primary focus was on the transition process at executive level. Olaf Kordes has joined the executive team since early 2020 and has brought to the Executive Committee deep knowledge and experience in private equity, perfectly complementing John Penning's more entrepreneurial background. Today, Luxempart is managed by a collegial Executive Committee of four members with complementary backgrounds. This has strengthened the internal organisation and enlarged the deal flow for potential deals, especially in France. An additional executive will be recruited shortly. I am pleased to say that this transition, even though not yet fully accomplished, represents a major successful step for the future development of the Company.

It was also encouraging to see that the new managing directors have endorsed the strategy initiated by the previous managers. Even though and rightly so, this strategy was adapted to changes in the investment environment and to the size of Luxempart."

Our investment strategy

In accordance with what we stand for, we thrive to deploy our investment activity based on a two-pillar strategy.

Our core business remains the Direct Investment activity, which focuses on deploying an average € 50 million per transaction in growing, profitable companies located in our core markets. Such investments target sustainable growth for the companies we invest in and long-term returns for our shareholders. That is why we consider investments over longer terms with no predefined exits. This is the main differentiating factor to classic private equity funds operating in our space.

Such investment projects can be realized in both public and private companies under the form of growth capital investments (with no external debt) or leveraged buy-outs, and can grant Luxempart either minority or controlling stakes in the company.

The strategy in the direct investment activity has been developed many years ago, but has recently been adapted:

Given the size of our Net Asset Value, it was decided to increase the average investment ticket to € 50 million, with a lower limit at € 25m (but with a view to increase investment over time), in order to have a meaningful impact on our Net Asset Value.

Also, in order to be able to actively create value, it was decided that all portfolio companies, whatever capital stake Luxempart holds in them, should grant us adequate governance rights. Such rights should enable us to contribute to shaping our portfolio companies' strategy and to assess its implementation in a timely and professional manner. We are able to give active and hands-on support.

Over the year 2020, we have reviewed our portfolio under the light of this revised strategy and have initiated a number of arbitrage decisions that will lead to a streamlining of the portfolio.

Our objective is to manage by the end of 2023 a more concentrated portfolio, composed of ca. 20 companies that all fit the above-mentioned criteria and present sustainable profitability, significant growth prospects and good visibility. This portfolio will continue to contain both public and private companies.

This means that over the three coming years, we will commit, in parallel to a growing investment activity, to sell a number of listed and unlisted portfolio companies. This process has been initiated in 2020 in an orderly manner, allowing to achieve capital gains in line with our long-term IRR objective.

The second pillar of our strategy is the Investment funds activity.

Historically, this indirect investment activity was centred on four long term relationships where Luxempart is among the cornerstone investors of these funds in Belgium, Germany, France and Italy.

However, their investment activity was to a large extent in overlap with our direct investment activity, which evenresulted in Luxempart sometimes co-investing alongside these partners.

The quality of the teams in three of these funds, their performance, track-record and their development perspectives have decided us to continue to actively support them in the future.

However, it was also decided to dedicate additional means to the Fund-of-Funds activity in order to allow it to double its size in the five coming years, by re-investing proceeds received and by tapping into existing cash reserves of Luxempart.

The target is to commit between € 75 million and € 100 million per annum to 5-8 new funds. However, the overall objective of the Fund-of-Funds activity was set to become a means of diversification, in order not to be any more in overlap with the direct investment activity.

Thus, Fund-of-Funds will seek to internationalise its future commitments by focusing essentially on North America and (more marginally) on Asia. It will commit investments to growth capital and mid-cap buy-out funds, but will also diversify to seek investment opportunities in compelling earlier stage venture funds.

In order to achieve this, the Fund-of-Funds team has retained the services of a first rate global and specialized consulting firm (a so-called gatekeeper). It will support Luxempart in identifying, selecting and diligencing new and promising fundraising projects within the targeted strategies. In order to achieve the overall objective, Luxempart has retained the service of this gatekeeper for a three-year period.

One Team

The shift in strategy has come with a change in the management team. In April 2020, Jacquot Schwertzer has withdrawn from his CEO function to become Vice-Chairman of the Board of Directors.

The shareholders have nominated two managing directors, John Penning and Olaf Kordes, who have started to build up a team commensurate with the new strategy. This process is ongoing with several recruitments underway and should be completed in 2021. We will then have a team that will be able to deploy investment volumes in line with the targets announced.

The variable remuneration scheme for the team is mainly based on value increase of the net asset value.

The year at a glance

Good resistance of portfolio Limited impact of Covid

No significant exposure to hard hit sectors such as travel, tourism, hospitality or traditional retail

55% of our Companies in Direct Investment improve sales in 2020 63% of our Companies in Direct Investment improve their results

Our Investment Funds Portfolio increases in value by 7.9%

2020 was a transitional year. The shift in strategy was initiated and has produced first results:

Luxempart has invested € 88m in its Direct Investment activity, notably in Enoflex and SNP. Furthermore, in November 2020, we have committed to invest ca. € 40m in Sogetrel, which was completed in late January 2021.

In December 2020, Luxempart, alongside other family investors led by Armira, has closed the sale of Mehler Vario Systems, generating revenues of € 38.5. The immediate realised return is close to 3.8x, with additional conditional revenues to come over the coming years.

The Investment funds team has made commitments to two reputed secondaries funds (LGT, Committed Advisors) in 2020. Execution of the new strategy has started and a first commitment in a very promising US growth fund (outstanding management team raising its 5th generation fund), was made in early 2021. In the meantime, the Fund-of-Funds activity has pursued exits and has received total proceeds of € 24m in 2020. Overall, its portfolio has generated a performance of 7.9% in 2020.

In early 2021, we have pursued this strategy notably by continuing to focus the listed portfolio on a limited number of lines and by taking an additional commitment to invest in Schaltbau AG. Furthermore, we have signed a new Direct Investment transaction, iM Global Partner.

Even though we will pursue our investment activity at a sustained pace in 2021 and beyond, our cash position and trading portfolio, net of commitments in our Investment funds activity of ca. € 140m, will remain at a high level.

Indeed, we try to take a cautious approach to new investment opportunities given the limited visibility in the current economic environment. Even though we remain cautiously optimistic about a pick-up in activity during 2021, we need to invest in solid companies.

This is all the more adamant since our existing portfolio has been faring very well in 2020. Even though some companies had to rely temporarily on public aid schemes, the vast majority of them has been only moderately affected by the economic crisis.

55% of our portfolio companies have achieved sales at least comparable to 2019 and 63% have seen their results increase in 2020. This fact associated to the increase in global financial markets in the second half of the year explain the increase in our Net Asset Value that reaches € 1.702 million in 2020 (+ 8%), which brings our total performance (dividend included) to 10% in 2020.

Activity report of the Board of Directors

Evaluation of the equity and summary of the financial statements

The financial statements of Luxempart have been prepared in compliance with the International Financial Reporting Standards for the year ending 31 December 2020.

Main KPI	31/12/2020	31/12/2019
(in € million)
Equity (group share)	1,702	1,575
Net result	157	207
Market capitalisation	985	1,064
Net asset value	1,702	1,575

The Group equity of Luxempart increased from € 1,575 million end 2019 to € 1,702 million end 2020, or per share from € 78.43 to € 84.72, an increase of 8%.

The consolidated net result reaches € 157 million, compared to € 207 million in 2019, mainly due to the fair value evolution of Luxempart's portfolio (for more details, please refer to note 10 of the IFRS financial statements).

The consolidated result of the year ending 31 December 2020 of € 157 million is mainly composed of € 168 million from investments activities (dividends received and capital gains/losses - realised and unrealised) and € -11 million expenses on ordinary activities (operating expenses, staff cost…).

In the statutory accounts (under Lux Gaap) of Luxempart, the equity increased from € 1,093 million as at 31 December 2019 to € 1,131 million as at 31 December 2020 and the net result increases over the same period from € -19,1 million to € 67,7 million.

Group portfolio activity

The indicators below present the activity of the portfolio of the Luxempart Group looking through its investment subsidiaries.

Luxempart is a long-term investor active in the small and mid-cap market segment in specific geographies in Europe and although generalist, with an affinity for certain sectors like financial services, education, healthcare.

Our mission is to take minority and majority stakes of a significant size (from €25 million upwards) alongside entrepreneurial families or managers and to contribute to value creation until the right moment has arrived to withdraw fully or partially.

In line with its long-term investment approach, Luxempart, is building a fund portfolio with selected managers with the objective to reach by 2025 a NAV of up to € 500 million. Part of it will be in US and Asia-based funds and we expect to generate attractive co-investment opportunities. Luxempart is an active and responsible investor who will progressively include ESG strategies on corporate management level and in investment process and monitoring.

Portfolio activity1	31/12/2020	31/12/2019	Variation
(in € million)
Investments in the portfolio	112	149	-25%
Divestments from the portfolio	149	127	17%
Net cash (cash net of financial debt)	140	155	-10%
Trading portfolio	96	79	22%
Net realised and unrealised capital gains
155	193	-20%
(losses) on the portfolio

The net realised and unrealised capital gains measure the increase or decrease of fair market value over 2020. The net realised capital gain is less significant as it measures the value increase (or decrease) of a sold asset as from 1 January 2020 to the date of exit. For 2020, this mainly concerned SES and LPKF partially or totally sold over the period. The valuation exercise is based on market multiples of peer groups after discount for smaller size or reduced liquidity. The valuations are thoroughly verified internally and for the most impacting ones, by an external expert of international reputation.

The net cash is composed of cash deposits of € 159 million and a financial debt of € 19 million. The trading portfolio of €M 96 is invested mainly in diversified bond portfolio.

The investment in the direct investment segment amounts to € 88 million and to € 24 million in the investment funds. The divestment in these different segments were € 125 million for the direct investment and € 24 million for the investment funds.

Dividend payment 2021

The Board of Directors will propose to the Annual General Meeting on April 26, 2021 to approve the payment of a gross dividend of € 1.60 per share, compared to a dividend of € 1.48 in 2019. This increase of dividends of 8.1 % is in line with the dividend policy applied since 1993. Assuming the approval of this proposal, the dividend will be payable as from 17 May 2021.

1 For its performance reporting, the Management of the Group does not exclusively refer to a reporting prepared under IFRS. In addition to the IFRS financial statements, the Group presents indicators of the portfolio activity. The portfolio activity reporting is based on financial measure other than a financial measure defined in the applicable financial reporting framework (IFRS). For more information on the difference between the Group portfolio activity reporting and the IFRS, please refer to the "Other Information" section of this present report. A reconciliation between the portfolio reporting and the IFRS financial statements is presented hereafter.

Key figures per share

12.00 € 10.00 € 8.00 € 6.00 € 4.00 € 2.00 € 0.00 €

Net Asset Value

90.00 € 85.00 € 80.00 € 75.00 € 70.00 € 65.00 € 60.00 € 55.00 € 50.00 €

31/12/2018

31/12/2019

Earnings per share

31/12/2020

10.33 €

31/12/2018

31/12/2019

31/12/2020

The global performance of Luxempart reaches 10.0% including the dividend paid in May 2020.

• • The Board of Directors proposes an ordinary dividend per share of €1.60 (€1.36 net) to be paid in May 2021

Share price & discount

50.0% 42.2% 60.00 €

40.00 €

20.00 €

0.00 €

31/12/2018

31/12/2019

Share priceDiscount

40.0% 30.0% 20.0% 10.0% 0.0%

31/12/2020

Global performance

In 2020, the global performance of Luxempart (Net Asset Value per share evolution), including the dividends paid to our shareholders reached 10% compared to 14.8% in 2019.

In order to compare its performance to the market, Luxempart refers to the MSCI Europe Mid Cap Net Return € index. The MSCI Europe Mid Cap Net Return has been selected in line with the strategy to invest in mid-caps in Europe with a focus on France, BeLux and the DACH region (Germany, Austria and Switzerland). The current fund portfolio is also mostly invested in Europe with an expected evolution towards the US and Asia over the coming years.

Luxempart outperformance of the

2017-2020 MSCI index: 2.5%

Luxempart annualised performance 2017-2020: 9.9%

Main investments in 2020

During the year 2020, the Group succeeded in investing € 112 million, mainly in:

	Enoflex • Acquisition of a minority stake in the global market leader of wine closure solutions • Investment alongside COBEPA and the Moglia family • Representation at the board of directors by 2 Luxempart team members • Enoflex is a mid-cap company resulting from the combination of Enoplastic (IT) and Sparflex (F)
	Atenor • Subscription to the € 78 million capital increase proportionally to our preference rights for € 8 million • Reinforcement of equity capital to pursue growth and international diversification
	SNP • Luxempart has built up a stake of 5.1% in this fast-growing IT service provider and software company. • We have the intention to increase our exposure to this technological company in the coming months, depending on certain criteria and our ability to partner up with the Group's management
	New Commitments in investment funds • € 15m in Committed Advisors IV, a secondary investment fund on a global scale • € 12m in Crown Growth Secondaries V, a secondary investment fund on a global scale • Out of these new commitments, € 2.8m were already called in 2020.

Main exits in 2020

The main exits realised in 2020 were:

	Mehler Vario System • Sale of our stake to Deutsche Private Equity • First dividend received of ca. € 38.5m represent an investment multiple of 3.8x • Future proceeds expected, some of which conditional on reaching certain criteria present additional proceeds representing 0.9x additional investment proceeds (central scenario)
	LPKF • Sale of our stake with an investment multiple of 2.5x • Contribution to value creation through governance measures and strategic input
	SES • Sale of 2.4 million shares during 2020 • Remaining position below 0.5 million shares
	Zooplus • Sale of nearly 30% of our position to benefit from the rising share price and to reduce our exposure • However, Luxempart maintains a significant stake in the group's capital to benefit from continued growth and profitability improvement
	Low&Bonar • Sale of our stake in the wake of the public takeover by the global technology group Freudenberg
	Distribution of proceeds by Armira (Investment funds activity) • Following the sale of Armira I portfolio company F24, proceeds of ca. € 9.5m were received by Luxempart

Recent post-closing events

During the first months of 2021, Luxempart closed two further new investments, increased its holdings in several lines and sold one portfolio company.

The operations are the following:

• • Investment of € 25 million in Sogetrel, a French company active in the telecom, IP security and digital solutions market through smart network and services, with a further commitment of ca. € 15 million for follow-on investments.

• • Investment of € 25 million in iM Global Partners (subject to the approval of supervisory authorities), a French worldwide asset management network with stakes in independent asset managers and a strong distribution force providing its clients access to the best asset management strategies.

• • In Schaltbau, commitment to subscribe up to 20% of the € 60 million mandatory convertible bond issue such as to hold within the acting in concert group on anchor stake above 20%, Schaltbau being a leading German supplier of systems and electromechanical components in the railway and capital goods industry.

• • Agreed sale of our 15% stake in NMC (via Indufin Capital Partners SICAR) realising a 15% IRR.

• • Commitment up to USD 25m in a one of the leading US growth equity investor General Atlantic.

There were no other significant events since 31 December 2020 that would impact the financial and patrimonial situation of the Group.

Impact of the Covid pandemic

The Covid pandemic caused a worldwide crisis since the first quarter of 2020 with strong negative impacts on population and economies. The successive waves with associated restriction measures, the more aggressive virus mutations and the slow roll-out of vaccinations in Europe prolongs the crisis and delays the social and economic recovery.

Our investment and management team responded swiftly and prudently so as to support our portfolio lines and protect our employees and their families. It appears that our companies turned out to be resilient and well prepared for the after Covid world. Indeed, not all sectors have been impacted similarly by the pandemic and the diversity of our portfolio as well as the strength of our main lines allowed us to increase our net asset value despite the economical headwind.

Internal evolution

The governance of our Group has been organised around the partially renewed 13 members of the Board of Directors who are deeply invested in investment decisions and strategic evolution. Several subjects such as human resources, remuneration, risk management and portfolio valuation have been discussed in more detail by specialised committees.

The Executive Chairman, the Vice-Chairman, the two Managing Directors and the investment team guarantee a professional execution of our investment activities. New staff members have been or will be recruited to support and develop certain functions such as talent management, compliance, reporting, analysis, communication and ESG. An external expert in valuation assessed this year the internal private equity valuations of some major portfolio lines and has validated internal results. A new statutory auditor will be proposed at the next Annual General meeting in line with best practice governance and after a 20-year fruitful collaboration with the current auditor.

Outlook

The uncertainty caused by the Covid pandemic affecting the rhythm and intensity of the economic recovery makes it more difficult to give a reliable outlook. It is therefore hazardous to predict how the valuation of our portfolio - and therefore indirectly our net result - will evolve in the future. The timing and speed of a recovery is difficult to predict but we remain convinced that 2021 will show economic growth.

Our strong assets to overcome the current situation and to build on the opportunities to come remains as follows:

• - Strong financial fundamentals and no leverage of Luxempart and limited leverage of most of its major portfolio lines

• - Cash position (including deposits) and treasury portfolio in excess of € 200 million and wide access to credit lines

• - Stable, professional and international team in Luxembourg with team members partially based in our home markets Germany, France, Belgium and Northern Italy

• - Stable shareholder base with entrepreneurial background and a long-term orientation.

Main risks and uncertainties

Luxempart faces specific risks due to the nature of its activities. Each of its investments is exposed to particular risks, mainly due to the business, location, regulation, customer's base and strategy decisions. Luxempart implements governance rules and closely liaises with the management of the major portfolio investments to mitigate the risk factors.

A major risk of Luxempart on all levels of the group is the market risk. All our assets are impacted by the evolution of financial markets and macroeconomic indicators (stock markets, comparable transactions of peer companies, valuation multiples, interest ratios…).

The liquidity risk is limited for Luxempart, as the Company is not an investment fund submitted to exit constraints. Our Group is a patient investor who is not driven by the financial markets and its volatility cycles. Our investment teams and our Audit, Risk and Compliance Committee closely follow the evaluation of the portfolio investments. Investment and divestment decisions depend more on specific company analysis than financial market or fund investment cycles.

The financial risks (market, interest rate, foreign exchange, credit and liquidity risk) are disclosed in the note 25 of the Financial Statements. The Group management risk system is described in more detail in Corporate Statement of the 2020 annual report.

Other information

Research and development

Luxempart does not pursue any research and development activities.

Own shares

During the year, Luxempart sold 13,750 own shares for € 0.4 million. These shares have a par value of € 0.4 million and represent 0.07% of the share capital. As at 31 December 2020 Luxempart holds a total of 609,678 own shares which corresponds to 2.9% of the issued share capital for a book value of € 17 million.

Branches

Luxempart does not have any branch.

Transparency

Responsibility of the Board of Directors

The Board of Directors' responsibilities are determined in law. In that regard, it is responsible for the true and fair preparation and presentation of the annual financial statements in accordance with European directives, as transposed into Luxembourg law. The Board of Directors considers that it has fully complied with these obligations.

Statement by the responsible persons

Pursuant to the Law of 11 January 2008 regarding transparency obligations relating to information on issuers whose transferable securities are admitted for trading on a regulated market, we hereby declare that, to our knowledge, the annual financial statements prepared in accordance with the applicable body of accounting standards provide a true and fair view of the Group's assets and liabilities, financial position, and profits and losses, and that the consolidated management report accurately reflects the firm's development and results, and the Group's financial position.

Law of 19 December 2002

The information required by the Law of 19 December 2002 (Article 68ter) in the updated version of 17 December 2010 is included in the Governance Chapter of the annual report.

The Board of Directors, 24 March 2021

John Penning	Olaf Kordes	François Tesch
Managing Director	Managing Director	Executive Chairman

Reconciliation between IFRS and the Portfolio activity report

The Group makes investments in portfolio companies directly and indirectly through intermediate "Investment entities subsidiaries" (Luxempart Capital Partners SICAR SA, Luxempart French Investments SA and Luxempart German Investments SA). The application of IFRS 10 requires the Group to measure at fair value its Investment entities subsidiaries that were previously consolidated line by line.

This fair value approach prevents the reader of the IFRS Financial Statements to have all the information on the activity and the performance of the Group, as it is not possible to look through the investment entities subsidiaries to understand their operations and results. The dividends and interest received, the expenses incurred and other financial information of these entities are aggregated on one single line in the IFRS Financial Statements. Moreover, intragroup operations that were previously eliminated on consolidation are now presented separately.

The Portfolio activity reporting is a different presentation that looks through the investment entities subsidiaries to provide a more understandable view of the operations and financial situation of the Group.

The tables below present the reconciliation of the IFRS financial indicators and the KPI used by the Management for its Portfolio activity reporting.

Profit and loss as at 31 December 2020

IFRS

(in €M)

Adjustments

Dividends received

Net gains / (losses) on financial assets Result on ordinary activities and tax Profit for the period

47 120 -11 157

-34 13

34 155

0 -11

-

157

The differences between the two reportings are mainly explained:

• - by the dividends and distributions received by Luxempart Capital Partners SICAR, that are recognised in "Net gains /

  (losses) on financial assets" in the financial statements, and

• - the proceeds received from the exit of Mehler Vario System, which are considered as a dividend under IFRS.

Net asset as at 31 December 2020

IFRS

(in €M)

Adjustments

Financial assets at fair value through profit and loss Cash

1,600

-33 1,566

124

35 159

Cash and cash equivalents Bank deposit

39

120 159

85

-85

-

Bank borrowing

-19

- -19

Other assets and liabilities

Total equity / Net asset value

-3 1,702

-1 -4

-

1,702

The Group Executive Committee manages the cash of the Group as being composed of the sum of the cash accounts and bank deposits of Luxempart and all its subsidiaries, whereas "Cash and cash equivalents" under IFRS are only composed of the current accounts of Luxempart and its subsidiaries that provide investment-related services (management companies).

Cash flows in 2020

IFRSAdjustments

(in €M)

Cash at 31/12/2019

Investments Divestments

Other cash movements Cash at 31/12/2020

51 -169 149 8 39

133

Portfolio activity 184

57 -112

0 149

-70 -62

120

The investments are higher under IFRS because Luxempart Capital Partners called more cash than the amount it needed to finance its own investments. Moreover, the IFRS investments comprise the cash invested in the trading portfolio that is not considered as an "investment" in the Portfolio activity.

The divestments amount is lower under IFRS than in the Portfolio activity reporting because, (i) the outflow relating to the sale of Mehler Vario System is recognised as a dividend under IFRS and, (ii) the non-consolidated subsidiaries distributed more cash to Luxempart than the value of the exits performed.

The other cash movements adjustments comprise mainly two impacts:

• - the cash flow from the exit of Mehler Vario System, recognised as a dividend under IFRS whereas as a divestment in Portfolio activity;

• - the investments and divestments of the trading portfolio.