Tessenderlo : Statutory annual report Friday, April 7, 2023

Tessenderlo Group nv

Rue du Trône 130

1050 Brussels

0412.101.728 (the "Company")

Statutory annual report of the Board of Directors relating to

the financial year 2022

(article 3.6 of the Code of Companies and Associations)

In accordance with article 3.6 of the Code of Companies and Associations of the Companies' Code, the Board of Directors reports on the activities of the Company with respect to the financial year 2022.

Operating result, financial situation and cash flows

Total operating income increased from 575,855,581 EUR in 2021 to 823,307,686 EUR in 2022. Turnover increased from 482,567,869 EUR in 2021 to 613,100,425 EUR in 2022, mainly thanks to higher sales prices (which had to compensate for increased raw material, energy and transportation costs) of fertilizers (Tessenderlo Kerley International activity) and gelatins (PB Leiner activity).

The other operating income, which mainly consists of intragroup recharging of services and the sale of electricity - related to energy from an electricity purchase agreement, which is no longer used internally - increased from 88,271,741 EUR in 2021 to 161,847,479 EUR in 2022, mainly as a result of increased energy prices (this positive impact however is partially compensated by the related higher operating costs).

The operating result increased from -7,099,096 EUR in 2021 to +30,612,233 EUR in 2022, thanks to positive circumstances in the market of the fertilizers (Tessenderlo Kerley International activity) as well as in the market of gelatins where margins were able to recover in 2022 (PB Leiner activity).

The financial result increased from +61,992,780 EUR in 2021 to +314,659,220 EUR in 2022. The 2022 results were positively impacted by a higher amount of dividends received from subsidiaries compared to 2021, as well as by the reversal of a previously recognized impairment on the investment in a subsidiary.

Tessenderlo Group nv recorded in 2022 a net profit of +340,968,415 EUR compared to a net profit of +52,685,636 EUR in 2021.

The bond, issued in 2015, with a maturity of 7 years and a fixed interest rate of 2.875% was reimbursed in 2022 for an amount of 191,851,000 EUR. Also in 2022, the group agreed two term loan credit facilities for 30.0 million EUR each, with a maturity of 7 years (started in April 2022) and a maturity of 5 years (starting August 2022) respectively. These loans, with quarterly capital reimbursements, have a fixed interest rate of 1.17% and 0.94% respectively, and contain no financial covenants. Both transactions will further reduce the liquidity risk as well as the interest costs of the group.

Next to these, Tessenderlo Group nv holds, as per December 31, 2022, "Cash Investments" and "Cash" for 143,015,753 EUR (2021: 158,060,741 EUR) and 16,956,230 EUR (2021: 134,708,098 EUR) respectively.

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Proposal for appropriation of the result.
The board proposes to appropriate:
-	the profit of 2022, being	340,968,415 EUR
-	decreased by a transfer from untaxed reserves	483,768 EUR
-	increased by the result brought forward from previous year	494,828,821 EUR
Being a total of:	835,313,468 EUR
Increased by the change in other reserves	3,223,887 EUR

The change in the other reserves is the consequence of the additional purchase of own shares, as well as the use of the own shares as part of the senior management compensation plan (Long Term Incentive Plan).

Being a total of:	838,357,354 EUR
As follows:
-	remuneration of the capital	64,104,571.5 EUR
-	profit to be carried forward	774,432,782.78 EUR

If this profit appropriation proposal is approved, the gross dividend would amount to 0.75 EUR/share.

In accordance with article 7.149 of the Code of Companies and Associations, we request to you to grant discharge for the exercise of our mandate as well as the mandate of the external auditor for the year closed on December 31, 2022.

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Human resources

Tessenderlo Group relies on a team of experienced professionals and this contributes towards our realization of the business and strategic objectives across all areas.

As at December 31, 2022, the total number of employees (FTE) working for Tessenderlo Group nv amounted to 743.8.

With our tagline "Every Molecule Counts" we strongly believe that our people are the most important drivers behind our success of creating sustainable growth. As we are making important strategic shifts across our business units, HR has a crucial role to play in driving people and culture development, business growth, and company agility.

We are convinced that our employees are the most important factor in our success. In a global business where knowledge and expertise are essential, we build on our experienced and motivated employees, who have an in-depth knowledge and understanding of both the group and our products. Our HR managers, who make up part of each of the different management teams in the group, are focused on rolling out the updated business strategies, shaping the organization, defining clear roles and responsibilities, as well as attracting, retaining, and developing the right people, and building motivated teams that will realize the objectives of the group. They also guide each company through the cultural changes that are necessary for the successful implementation of the strategic plans. Professional tools and processes for Talent and Reward, sharing best practices, and automation of transactional work are supporting these common goals.

Within our annual performance cycle, clear objectives that are in line with our strategy execution are defined internally in each of the different business units. Each business unit has a communication plan to cascade these objectives of management down to the shop floor and to communicate them into the minds, hearts, and hands of our team members.

Talent management is a key process within our organization. As our business is constantly growing, we offer challenging yet rewarding jobs for enthusiastic people with backgrounds in Engineering, Sales, and Business Development, as well as Operations Management and General Management. We offer many great opportunities in terms of personal development and we strive to have in place a personal development plan for each individual employee. On-the-job training and a permanent feedback culture are essential, but we also organize learning and training programs for all levels of employees. We build on the strengths of one another, and we deploy our people in a complementary manner.

Within our Talent Review Process, we prepare career paths and carefully develop our talent for the future. In addition, we have invested in platforms to facilitate these processes. HR is also responsible for solid remuneration systems and benchmarked and competitive salary packages. The goal behind our remuneration strategy is payment according to performance, in which we strive to stimulate the entrepreneurial spirit of our employees.

We must ensure that our employees, as individuals, are fully prepared at all times in order to respond to both the short-term and long-term challenges we face, as well as to work productively in result- driven teams.

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Innovation

Investments in innovation and R&D activities remain a key element of the Tessenderlo Group strategy, and this investment continues to underpin our core philosophy that "Every Molecule Counts." Our innovation activities are prioritized in alignment with our business strategies. In R&D and new business development, Tessenderlo Group continued to improve and develop product, process, and application technologies through a customer-centric approach, launching new products, exploring new applications for existing products and more efficient ways of producing them, thus enhancing their utility, sustainability, and environmental protection profile. We also further developed our collaborations with academia, customers, suppliers, and other relevant stakeholders.

In 2022, we continued our efforts to enhance the sustainability of our fertilizers and their production processes. Through dedicated lab, pot, and field trials, we are tailoring our products and their usage to help improve crop growth, yield, crop health, and soil health. This approach means we will continue to contribute to sustainable agriculture practices, translating the insights gained from these scientific trials into fertilizer use recommendations and new fertilizer developments. We strive to continuously improve our production processes through incremental and more disruptive process innovations, with the ambition of ensuring the economic and environmental sustainability of our operations.

We are passionate about improving the lives and well-being of humans and animals and - in that context - our product innovations focus on the valorizing and upcycling of by-products from other industries or making the most out of our precious natural resources.

In this regard, we continued to improve our portfolio of healthy collagen ingredients for humans, including making an investment in a research program to partner with internationally recognized experts in the field from the University of Maastricht. Furthermore, we are continuing to explore the effects of our collagen peptides in the area of sports nutrition via our scientific collaboration with Florida State University. We made good progress with our research program into collagen peptides with the aim of enabling us to expand our market for collagen and gelatin. PB Leiner's gelwoRx™ Dsolve pharmaceutical gelatin portfolio has been extended with three new products: Dsolve B, Dsolve P, and Dsolve xTRA. The new variants have been specially designed to provide advanced solutions for reduced crosslinking and fast dissolution of soft capsules.

In a collaboration with Utrecht University, focusing on biofabrication in regenerative medicine, different promising cell viability results with our Claro™ bioinks have been obtained. We continue to market our IP-protected IDX and VDX technologies, yielding highly digestible blood meals and feather meals, and are starting to license the technologies to those customers that want to significantly upgrade their feather or blood meals, making sure that "Every Molecule Counts."

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