Swiss Steel : Non financial Repor

Statement

by the Chairman

Jens Alder

Chairman of the Board

Dear stakeholders,

In the ever-evolving landscape of business responsibility, Swiss Steel Group embraces the transformative power of Environmen- tal, Social, and Governance (ESG) considerations. Since the change in management in 2021, sustainability has become a core driver of our strategy and daily operations. In consequence, over the last few years, ESG matters have been a catalyst for positive change within our organization.

Recognizing the profound impact steel has on our daily lives, we perceive it as our duty at Swiss Steel Group to contribute to a better, greener, and more sustainable world. Our commitment to sustainable steel production, rooted in circular economy principles and recycling, is ingrained in our DNA. Leveraging our expertise in recycling, electric arc furnace technology, and the use of renewable energy, we have successfully reduced the carbon footprint of our products well below the industry average, offering a distinctive environmental value proposition.

2023 marks a year of progress

In May 2022, Swiss Steel Group committed to set company-wide emission reduction targets in line with climate science with the Science Based Targets initiative (SBTi). According to the steel science-based target setting guidance published in July 2023, we developed our decarbonization targets. In December 2023 we submitted them to SBTi for validation as one of the first steel producers to use the new guidance. Starting from our base year in 2021, we are dedicated to reducing our greenhouse gas

(GHG) emissions with the ultimate goal of reaching net-zero by 2038.

Recognizing the profound impact steel has on our daily lives,

we perceive it as our duty at Swiss Steel Group to contribute to a better, greener, and more sustainable world.

In recognition of our progress towards a sustainable future, Swiss Steel Group was honored with the prestigious German Sustainability Award. It also serves as a testament to the collective efforts of our employees, who have consistently championed sustainability even in challenging economic times. The award stands as a seal of trust for our valued stakeholders, reinforcing our position as a leader in the industry.

Our commitment to sustainable development and continuous improvement of our sustainability management system was acknowledged with a silver medal from EcoVadis. For the second year in a row, we have improved our CDP Climate Change score. We now have a B rating that affirms our efforts to address climate change and manage our environmental practices.

Maintaining transparency, we have successfully obtained limited assurance of our emissions inventory, reaffirming our dedication to accurate reporting and environmental responsibility. We are also in the early stages of implementing a Product Carbon Foot-

Swiss Steel Group Non-Financial Report 2023

Preface

Report on Non-Financial Matters

Annex

print (PCF) tool, aiming for more accurate emissions information based on actual production data.

As we look back on 2023, these highlights are not just achieve- ments; they represent our journey toward a more responsible and sustainable future. We are grateful for the collective efforts of Swiss Steel Group in making this progress possible.

We are dedicated to reducing our greenhouse gas (GHG) emissions with the ultimate goal of reaching net-zero by 2038.

While we celebrate these achievements, we acknowledge and address sustainability risks and challenges. We continue to manage the reputation of the heavy industry, navigate political framework conditions, emerging regulatory requirements for sustainability reporting, and continue to advocate for comparable green steel standards.

Further, we will work hard to improve our health and safety performance. As a steel manufacturer, we prioritize the prevention of personnel accidents, acknowledging the inherent risks in our industry. We actively cultivate a "safety culture" globally, employing measures like reporting and analyzing accidents, conducting cross-business audits, risk assessments,

and implementing behavioral-based safety training. These practices are integral to our standard operating procedure.

A pledge to integrity and future well-being

Addressing social and societal goals, we actively engage with our stakeholders, fostering closer connections with the communities where we operate. This commitment extends to the consideration of stakeholder needs in our production sites and service provision.

We reaffirm our commitment to global standards on human rights throughout our workplace and supply chains, aligning with the UN Sustainable Development Goals (SDGs).

Our commitment to sustainable development, healthy societies, and the needs of future generations is unwavering. We continually enhance our compliance management capabilities, learning from past events, and actively preventing non-compliance, including our dedication to anti-bribery efforts.

Our commitment to sustainable development, healthy societies, and the needs of future generations is unwavering.

This report addresses the new requirements outlined in Art. 964a et seq. of the Swiss Code of Obligations and provides a comprehensive overview of Swiss Steel Group's commitment to environmental protection, the well-being of our employees, and our broader societal impact.

Thank you for your continued partnership as we navigate this journey towards a more sustainable future.

Jens Alder

Chairman of the Board

Swiss Steel Group Non-Financial Report 2023

Report on Non-Financial Matters

Annex

Regulations and Standards Applied

This non-financial report has been compiled in accordance with Art. 964a et seq. and specifically fulfills the requirement of Art. 964j-k of the Swiss Code of Obligations and the Swiss Ordinance on Due Diligence and Transparency in Relation to Minerals and Metals from Conflict -Affected Areas and Child Labor.

The due diligence and reporting obligations covering child labor and conflict minerals are addressed in sections "Human Rights" and "Sustainability in the Supply Chain." The information cited in the content index (see annex) has been prepared with reference to the standards of the Global Reporting Initiative (GRI). The report includes a description of our business model, approach (objectives, policies, due diligence), performance and measures, and risks and their management.

It addresses aspects related to the environment and climate, social and employee issues, human rights and anti-corruption.

The scope of the report covers Swiss Steel Group, i.e. Swiss Steel Holding AG and its controlled group companies as listed in our Annual Report.

Our Operations

Business model

Headquartered in Lucerne (Switzerland), Swiss Steel Group is one of the world's leading producers of special steel long products. Thanks to the exclusive use of steel scrap in electric arc furnaces, the Group is one of Europe's foremost contributors to the circular economy and is among the market leaders in the field of sustainably produced steel.

Swiss Steel Group has its major production facilities in France, Germany, Switzerland and North America, with distribution entities and smaller processing sites in over 25 countries. Through our strong local presence, Swiss Steel Group offers a wide range of individual solutions in the fields of engineering steel, stainless steel and tool steel. Swiss Steel Holding AG is listed on the SIX Swiss Exchange and employs approximately 8,800 em- ployees, more than 90 % of whom are located in Europe and North America.

Click for locations

Swiss Steel Group offers one of the most comprehensive portfolios of steel grades, ranging from unalloyed structural steels and tool steels to high-alloy,corrosion-resistant stainless steels. Dimensions range from 0.013 millimeters for drawn wire to 1,100 millimeters for forged bars. These products are essential in many industries, including the automotive, aerospace, machinery, medical, construction and energy sectors. Its strength, toughness and workability make steel a key material for innovative solutions in these industries.

Revenue by customer industry

Architecture, building and construction 3 %

Figures 2023

Our production process

Swiss Steel Group's production process begins with the collection, sorting and segregation of scrap, followed by the melting of scrap and alloys in electric arc furnaces (EAFs).

While scrap is sourced locally, ferroalloys depend on global supply chains. After adjusting the temperature, chemical composition and cleanliness of the liquid steel in the secondary metallurgy, the steel is cast into billets, blooms or ingots. A small portion of production is sold directly to customers as cast steel. In the rolling mills and forge shops, the cast steel is first reheated in natural gas-fired furnaces and then hot-formed into wire, bars or forgings. Some products are then either sold directly to customers or further processed in our numerous finishing shops through heat treatment and cold finishing processes, such as drawing or peeling.

Effects of activities on non-financial matters

We are fully aware of the responsibility that comes with the nature of our business and we act in a responsible manner to avoid any adverse impact on non-financial matters. Our operations can have an effect on non- financial aspects in the following way:

Environmental matters

The production of steel requires large amounts of energy and natural resources. Through the use of scrap steel and electric arc furnaces (EAF), our environmental footprint is significantly smaller than that of traditional steel- making. However, our operations still generate emissions such as carbon dioxide, dust, noise or emissions to soil, as well as waste that must be managed with great care. Our Group has made investments in recent years to ensure we minimize our footprint.

Social issues

Most of our sites have a long history and are located in urban areas. Our activities can have an impact on the well-being of local commu- nities. Within these communities, we play an important role in social integration, providing employment opportunities and contributing through sponsorship and donations in partnership with local stakeholders to ensure the sustainable development of these areas.

Employee-related issues

The working environment in heavy industry involves risk factors such as heat, dust, noise, exposure to chemicals and the movement

of heavy loads. We take great care to avoid any impact on the health and safety of our employees through various measures such as training on health safety, regular audits and proactive equipment maintenance.

Respect for human rights

We source materials globally and employ approximately 8,800 people worldwide. Due to varying laws and local circumstances, our activities may have an impact on human rights, particularly in the supply chain. Swiss Steel Group has initiated several actions in recent years to ensure that our business partners follow our standards aligned with best-in-class rules.

Combatting corruption

Based in more than 25 countries, our Group is evolving in multiple jurisdictions with different laws for fighting corruption and varying sensitivities on the matter. To ensure a global understanding of the principles that need to be followed, Swiss Steel renewed its Code of Conduct in 2023 to ensure a common ground on anti-corruption, complemented by several policies and trainings.

Sustainability governance

At Swiss Steel Group, sustainability and climate-related issues have been defined as one of our top five strategic priorities.

The Vice President Corporate Technology, supported by a dedicated team, has overall functional responsibility for all sustainability issues at the Group. As a result, sustainability is a regular agenda item at Executive Board meetings. CAPEX plans, sustainability goals and initiatives, as well as environmental management and risks, are also discussed and reviewed at the quarterly Technical Board meetings. In addition, a Group-level Sustainability Working Group is committed to improve our sustainability management system.

The Audit Committee oversees the Group's sustainability performance and its compliance system, which ensures adherence to legal requirements, including current and future sustainability regulations and reporting stand- ards. ESG was one of the focus areas of our internal audit team in 2023. Multiple audits at the corporate and site levels were conducted to review sustainability performance and reporting accuracy. Strengths and weaknesses were identified and reported to the Audit Committee. These will be followed up by the relevant corporate and site functions in 2024.

At Swiss Steel Group, sustainability and climate-related issues have been defined as one of our five top strategic priorities.

We benchmark our performance and identify opportunities for improvement by participating in respected external initiatives and ratings such as the Science Based Targets initiative (SBTi), the Carbon Disclosure Project (CDP) and EcoVadis.

Committed to the Science Based Targets initiative (SBTi)

In May 2022, Swiss Steel Group committed to setting company-wide emission reduction targets in line with climate science with the Science Based Targets initiative (SBTi). According to the 1.5°C steel target-setting guidance published in July 2023, we developed our decarbonization targets and submitted them in December 2023 to SBTi for validation as one of the first steel producers to use the new guidance.

Swiss Steel Group is committed to the Science Based Target initiative (SBTi)