Corticeira Amorim SGPS S A : Consolidated results as of 30th June 2023

CORTICEIRA AMORIM CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023

First semester 2023 (1H23) (Audited)

Second quarter 2023 (2Q23) (Non audited)

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CORTICEIRA AMORIM, SGPS, S.A.

CONSOLIDATED FINANCIAL STATEMENTS - FIRST HALF 2023

Translation of consolidated financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails

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CORTICEIRA AMORIM, SGPS, S.A.

CONSOLIDATED FINANCIAL STATEMENTS - FIRST HALF 2023

Dear Shareholders,

In accordance with the law, CORTICEIRA AMORIM, S.G.P.S., S.A., a listed company, presents its:

CONSOLIDATED

MANAGEMENT

REPORT

1. SUMMARY OF ACTIVITY

The first half of 2023 was surprisingly strong in terms of economic growth, as well as being positive in regard to financial market developments. The worst fears regarding the impact of a potential European energy crisis during the winter were not realised. The Chinese economy reopened earlier than expected and the United States (US) economy remained practically immune to the impact of sudden interest rate rises.

Some signs of fragility were observed, especially in those sectors most exposed to monetary tightening, amid fears the tightening could worsen. Some US banks especially exposed to interest-rate risk became the targets of official interventions between March and May. Although the instability affecting the US banking system did not last long, it triggered restrictions on granting credit and fears remain over potential impacts arising from the exposure of regional banks to the US commercial real estate sector. At the same time, the acceleration of monetary tightening has led to concerns regarding the residential real estate sector in countries including China, Canada, Australia and Northern Europe.

The US economy proved remarkably resilient, especially in the climate of continuing monetary tightening, mainly due to a robust labour market. In the second quarter, US GDP increased 0.6% quarter-on-quarter (2.4% year- on-year), a faster rate of expansion than in the previous quarter.

The Euro Zone registered a gradual drop in activity levels and a moderate reduction in inflation - Germany's poor performance (reflecting economic stagnation after two quarters of contracting activity) led this downward turn, together with the weak performance of other large European economies such as Italy. Activity levels are estimated to have increased 0.3% quarter-on-quarter - artificially inflated by Ireland's growth - and 0.6% in comparison with the same period of 2022.

China's economic growth fell below expectations in the second quarter, increasing 0.8% quarter-on-quarter, and only 6.3% compared with the same period of 2022, when strong restrictions on mobility had a significant impact on activity.

Corticeira Amorim's consolidated sales totalled €539.3 million in the first six months of 2023, a reduction of 1.1% compared with the same period of the previous year. The drop in sales by the Floor and Wall Coverings Business Unit (BU)(-35.9%) had a decisive impact on the evolution of consolidated sales, in which the Cork Stoppers BU's 5.4% sales growth was a highlight. The downward trend in sales registered in the first quarter (- 1.4%) continued in the second quarter, but at a slower rate (-0.9%).

It should be noted that the exchange rate effect in the first half of the year was almost neutral. Excluding this effect, first-half sales would have decreased by 0.8%.

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CORTICEIRA AMORIM, SGPS, S.A.

CONSOLIDATED FINANCIAL STATEMENTS - FIRST HALF 2023

Sales increased for Raw Materials BU (+19.1%) and the Insulation BU (+23.4%), but fell for the Composite Cork BU (-5.8%).

Consolidated EBITDA totalled €103.8 million in the first half of 2023, up from €98.1 million in the same period of the previous year. Despite the negative impact of increased cork consumption prices and personnel costs, significant savings were recorded in terms of operating costs, due to lower energy and transport prices. The EBITDA-sales ratio was 19.2% (1H22: 18.0%).

The increase in earnings by associate companies was mainly due to the increased contribution by Corchos de Argentina, an associate company which began to adopt the Euro as its operating currency at the end of 2022.

Non-controlling interests ended the quarter with a lower value than in the same period of 2022 (€5.6 million vs €6.4 million) due to the less positive results of some subsidiaries with non-controlling interests.

After results attributable to non-controlling interests, net income totalled €51.4 million, an increase of 8% compared with the same period of the previous year.

Despite the generation of cash flows derived from EBITDA over this period, investment in tangible assets (€46 million), working capital (€79 million) and dividend payments (€27 million) led to a €58 million increase in net debt, which stood at €187 million at the end of the first half.

2. OPERATING ACTIVITIES - FIRST HALF 2023

The Raw Materials BU recorded sales growth of 19.1%, resulting from an increase in activity driven by increased demand from the Corticeira Amorim Group's other BUs.

EBITDA totalled €12.6 million, a decrease compared with the same period of the previous year (€13.4 million). The reduction in the EBITDA margin (from 12.1% in 1H22 to 9.6% in 1H23) resulted mainly from increased consumption prices for raw materials, despite an improvement in the sales mix, an increased cork yield and lower operating costs (energy and transport).

The BU continues to develop its Forest Intervention Project at Herdade de Rio Frio and Herdade da Baliza, focusing on new plantations and on increasing tree density in some areas.

The cork campaign has almost been completed, with purchases progressing as expected. However, prices and quantities are expected to increase following the atypical harvest of 2022.

The Cork Stoppers BU recorded sales totalling €423.3 million, an increase of 5.4% compared with the same period of 2022.

Solid sales growth was driven by an improved product mix and higher sales prices. Sales increased in all wine segments and in most cork stopper categories. The Neutrocork stopper continued to outperform other still wine stopper categories.

In geographical terms, sales increased strongly in the US market following an unfavourable performance in 2022, when sales were penalised by the bottling of high-end wines, whose production was impacted by the 2020 forest fires.

The BU's EBITDA totalled €91.0 million (+18.6% compared with the same period of 2022). The EBITDA margin rose to 21.5% (19.1% in the same period of the previous year). The improvement in the margin was

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CORTICEIRA AMORIM, SGPS, S.A.

CONSOLIDATED FINANCIAL STATEMENTS - FIRST HALF 2023

mainly due to increased sales prices, improvements in the product mix, a reduction in energy costs and an improved crushing performance.

The Floor and Wall Coverings BU recorded sales of €49.6 million, a decrease of 35.9% compared with the same period of 2022 that reflects a significant decrease in activity levels due to the adverse climate in which the BU operates. This was in line with the global trend in the sector, reflecting a slowdown in activity, particularly in the retail/residential segment. Sales of manufactured and trade products both declined.

A reduction in sales was recorded for a majority products and in most regions. Sales to Germany and Scandinavia, the BU's most important markets, remained challenging, showing no signs of recovery.

The BU recorded negative EBITDA, totalling -€2.7 million, compared with a positive EBITDA of €2.2 million in the same period of 2022. The reduction in operational activity due to lower sales levels was the main cause of the deterioration in the EBITDA margin (from 2.8% to -5.5%), despite the positive impact of lower energy, transport and marketing expenses.

Investment in the new digital printing technology will enable the BU to rebuild its product portfolio, using more sustainable products with greater added value, thereby laying the foundation for a recovery in the BU's profitability. This investment should establish the basis for a consistent recovery in profitability, once there is a reversal in the downward sales trend in the flooring market, mainly in Germany, which began in the summer of 2022.

Sales by the Composite Cork BU totalled €58.2 million, a decrease of 5.8% compared with the same period of 2022 (€61.7 million). Although sales benefited from improvements in the product mix and from sales price increases, a reduction in volume sales, particularly in lower-added value segments, led to overall sales dropping in the first six months of 2022.

The most profitable segments outperformed those with the lowest margins. The biggest increases in sales were in the Power Industry, Rail and Sports Surfaces segments. The largest drops in sales were in the Distributors of Flooring & Related Products and Resilient & Engineered Flooring Manufacturers segments.

The positive contribution of joint ventures, whose sales increased 27.6% compared with the same period of 2022, was a sales highlight for this BU.

EBITDA for the period totalled €11.8 million. The EBITDA margin was 20.3% (1H22: 15.8%). The improvement in profitability, despite a decrease in volumes sold and an increase in the cost of raw material cork consumed, was mainly due to an improved product mix, lower energy costs and favourable exchange rates (at constant exchange rates, the EBITDA-sales margin would have been 18.8%).

Sales by the Insulation BU totalled €9.9 million, up 23.4% on the first half of 2022. Strong sales growth, reflecting higher sales prices and an improved product mix, more than offset a drop in sales volume.

The BU posted a negative EBITDA of -€0.6 million, compared with a positive €1.1 million in the same period of 2022. The unit's EBITDA is highly sensitive to cork prices, as cork is the only raw material used in the manufacture of its products. As a result, the climate of rising cork prices had a significant impact on the BU's profitability. The EBITDA margin was also penalised by higher operating costs, despite the positive impact of a reduction in energy prices and an increase in crushing yields.

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CORTICEIRA AMORIM, SGPS, S.A.

CONSOLIDATED FINANCIAL STATEMENTS - FIRST HALF 2023