Climate Change Data

Environmental Metrics

Social Achievements

• Intensive discussions with employees about the renaming process received favorable feedback; employees rapidly identified with the new Deufol brand.

Governance Achievements

• Renamed holding company and most Group companies to reflect the single "DEUFOL" brand; established a compliance structure for the Group and control risk management.

Climate Goals & Targets

Environmental Challenges

• Rising timber prices in Industrial Goods Packaging; lack of project business in Industrial Goods Packaging; restructuring measures in the USA for Consumer Goods Packaging; intensity of competition in Warehouse Logistics varies; violation of agreed financial ratio as of December 31, 2010.

Mitigation Strategies

• Restructuring measures in the USA for Consumer Goods Packaging bore fruit; internal rationalization measures and streamlined reporting system in the USA; providing customer-specific additional services in Warehouse Logistics; successful follow-up financing expected for 2011 (though potentially under worse conditions than in the past); interest rate derivative contracts in place for managing interest rate risk.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS, German Commercial Code (HGB)

Third-party Assurance: Ernst & Young AG, Wirtschaftsprüfungsgesellschaft

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Conversion from a German to a European stock corporation (Societas Europaea) at the end of the year and the introduction of registered shares; established a World Board which coordinates “best practice sharing” and promotes business development at a global level.

Climate Goals & Targets

Environmental Challenges

• Fraudulent activities committed by some managers over the past few years; challenging economic environment in Italy and Belgium; consolidation due to the regional withdrawal of a major customer in Belgium; main customer in the USA consolidating activities due to overproduction of gift cards.
• High volume of expenditure which has resulted from clear-up and conversion activities.

Mitigation Strategies

• Clear-up of fraudulent activities and establishment of structures and processes to enable a long-term, competitive framework; gaining new customers in Italy; focusing on consolidation in Belgium; reorganizing the US battery packaging business; streamlining Group operations to reduce high expenditure.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Established a strategic central purchasing system

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IFRS

Certifications: Null

Third-party Assurance: Warth & Klein Grant Thornton, Wirtschaftsprüfungsgesellschaft, Frankfurt am Main

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Cautious market environment
• Loss of Apple as a customer and uncertain outlook for business with P&G in the USA
• Challenges associated with the consolidation of its location in Tienen (Belgium)
• Dealings in China in 2011
• Customer relocation of capacities to Eastern Europe and associated reduction in operations in Belgium
• Loss of a customer in the gift card segment in the USA
• Internal investigation in China resulting in valuation adjustments

Mitigation Strategies

• Personnel and structural changes
• Stabilization and expansion of important customer relationships
• Three-year outline agreement with a major German customer
• New quayside location at the port of Hamburg
• Three-year contract with a large US customer
• Integration of companies and locations
• Best practice sharing system
• Operational Excellence initiative
• Extensive IT projects to improve transparency, efficiency, and control
• Restructuring of Data Packaging business in the USA
• Successful completion of the Tienen (Belgium) consolidation process
• Restructuring of business in China

Supply Chain Management

Responsible Procurement

• Strategic central purchasing system

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: Votum AG, Wirtschaftsprüfungsgesellschaft, Frankfurt am Main

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Loss of a major customer in the Data Packaging segment in the USA.
• Subdued levels of demand from some customers in Northern Germany.
• Relocation of capacities by a major customer in Tienen, Belgium to Eastern Europe.
• Insolvency of a major customer in Italy.

Mitigation Strategies

• Restructuring program in the USA leading to a turnaround in earnings.
• Restructuring measures implemented for various companies in Northern Germany.
• Cost-cutting measures in the USA.
• Shifting core focus of activities in China to Yantai and integrating activities in a joint venture with Meilink Group.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: Votum AG, Wirtschaftsprüfungsgesellschaft, Frankfurt am Main

Environmental Metrics

Social Achievements

• Developed and rolled out the DEUFOL EXPERT PROGRAM (DEXPRO) worldwide to support, promote, and motivate employees, expanding leadership and employee competencies, improving communication channels, and making the Deufol Group's vision tangible.

Climate Goals & Targets

Environmental Challenges

• Possible customer losses due to relocation of packaging-related production sites or insufficiently consistent expansion of market leadership in core business areas.
• Slow recovery of Southern European economies, particularly in the Italian market.
• Risks from acquisitions and investments due to high capital expenditure and long-term capital commitment.
• Limited number of larger customers in some segments, potentially impacting revenue and earnings.
• IT risks related to network outages or data corruption.
• Financial risks related to variable interest rates, currency fluctuations, and potential covenant breaches.
• General legal and tax risks.

Mitigation Strategies

• Focus on strengthening customer relationships through joint projects and high customer orientation.
• Acquisition of smaller customers to stabilize the customer base.
• Regular reviews to detect negative developments early.
• Decentralized IT infrastructure to limit the impact of isolated IT risks.
• Redundant servers and backup solutions to reduce data loss.
• Optimized and extended consortium financing in Europe.
• Independent banking financing in the USA.
• Performance-based compensation for managers.
• Use of external service providers to manage fluctuating workload.
• Documentation of relevant know-how and distributed decision-making processes to mitigate know-how loss.
• Comprehensive protective measures such as virus protection concepts, firewalls, emergency and recovery plans, and external backup solutions.
• Hedging against currency risks in the Czech Republic.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: Votum AG

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Temporary lull in economic growth, particularly in Germany, affecting export business.
• Price reductions to retain strategic customers.
• Temporary price increases for wood (key raw material).

Mitigation Strategies

• Changes to Deufol Group structure and optimization of internal organizational structure.
• Further integration of existing subsidiaries and locations.
• Standardization of global IT landscape.
• Fine-tuning of HUB concept to generate time and cost savings for customers.
• Focus on industrial goods packaging-related business and adjacent services.
• Selective activity in consumer goods packaging.
• Integration of data flows in line with goods flows.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: Votum AG, Wirtschaftsprüfungsgesellschaft, Frankfurt am Main

Sustainable Products & Innovation

• Deufol ConPal / ConBox standard crate system

Environmental Metrics

ESG Focus Areas

• Sustainability

Environmental Achievements

• Developing new packaging designs based on modern composite materials with an increased non-wood proportion for increased sustainability and to reduce pest infestation in wood packaging.
• Optimizing production processes to require fewer resources to manufacture new packaging designs.

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Challenging economic environment, including a global recession in industry and political uncertainty.
• Decline in sales and earnings.
• Loss of a major customer in the Consumer Goods Packaging segment.
• Coronavirus pandemic and its impact on the global economy.

Mitigation Strategies

• Cost optimization measures.
• Standardization of processes.
• Focus on Industrial Packaging.
• Close exchange of information at global management level.
• Evaluation and utilization of government assistance packages.
• Negotiations with banks to flexibilize financing arrangements.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IFRS

Certifications: Null

Third-party Assurance: Votum AG, Wirtschaftsprüfungsgesellschaft, Frankfurt am Main

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• New standard pallet and standard crate system “Deufol ConPal / ConBox”
• New packaging designs based on modern composite materials with an increased non-wood proportion

Awards & Recognition

• Not disclosed