{
    "company_name": "Acerinox S.A.",
    "company_info": {
        "name": "Acerinox S.A.",
        "industry": "Steel Manufacturer",
        "country": "Spain",
        "revenue": 6607000000.0,
        "number_of_employees": 8229,
        "company_type": "Public limited company",
        "sector": "Materials"
    },
    "extracted_kpis": {
        "currency": "EUR",
        "units": "millions",
        "turnoverKPI": {
            "totalTurnover": {
                "value": 6607.978,
                "percentage": "100%"
            },
            "eligibleTurnover": {
                "value": 5152.439,
                "percentage": "78.0%"
            },
            "alignedTurnover": {
                "value": 4662.75,
                "percentage": "70.6%"
            },
            "nonEligibleTurnover": {
                "value": 1455.539,
                "percentage": "22.0%"
            }
        },
        "capexKPI": {
            "totalCapex": {
                "value": 174.785,
                "percentage": "100%"
            },
            "eligibleCapex": {
                "value": 135.266,
                "percentage": "77.4%"
            },
            "alignedCapex": {
                "value": 134.11,
                "percentage": "76.7%"
            },
            "eligibleNotAlignedCapex": {
                "value": 1.156,
                "percentage": "0.7%"
            },
            "nonEligibleCapex": {
                "value": 39.519,
                "percentage": "22.6%"
            }
        },
        "opexKPI": {
            "totalOpex": {
                "value": 87.653,
                "percentage": "100%"
            },
            "eligibleOpex": {
                "value": 85.338,
                "percentage": "97.4%"
            },
            "alignedOpex": {
                "value": 76.582,
                "percentage": "87.4%"
            },
            "nonEligibleOpex": {
                "value": 2.315,
                "percentage": "2.6%"
            }
        }
    },
    "taxonomy_section": "{51}------------------------------------------------\n\nImage /page/51/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue, crescent-shaped graphic. The crescent appears to be a partial circle, open on the right side, and is thicker than the text.\n\n- Improving energy efficiency through best available techniques.\n- Promotion of heat recovery systems from process sources.\n- Electrification of systems and vehicle fleet.\n- Increased use of renewable energies and, in particular, renewable electricity.\n- Use of alternative low-carbon fuels (e.g. green hydrogen).\n- Increased use of scrap metal.\n- Increased use of low-carbon raw materials.\n- CO<sup>2</sup> capture, storage and use.\n- Boosting digitalisation to improve energy control and management.\n\nThese measures are aligned with the Sustainability Plan's climate change targets for 2030, compared to 2015. Sustainability officers at each factory monitor them every month, alongside the corporate sustainability team. The progress of the objectives is reviewed quarterly by the Sustainability Committee, and appropriate actions are taken in each instance.\n\nAcerinox established sustainability objectives linked to its environmental, social, and corporate governance performance, aligned with its Positive Impact 360º Sustainability Master Plan and the main international standards (Paris Agreement, Sustainable Development Goals, etc.). The monitoring of climate change related targets is shown below:\n\n**1. GHG (Greenhouse Gas) emissions target:** to reduce the direct and indirect carbon emissions intensity (Scopes 1 and 2) of its stainless division by 20% by 2030 compared to 2015 levels. The Acerinox Group is committed to reducing its carbon footprint.\n\nAt the end of the year, Acerinox had reduced its emissions intensity by 3% compared to 2022, and by 11% compared to the base year of 2015 (2% increase in 2022 compared to 2021 and 8% reduction compared to the base year).\n\n**2. Energy Efficiency Target:** to reduce the energy intensity of the stainless-steel division by 7.5% by 2030 compared to 2015 levels.\n\nDuring the year, Acerinox increased its energy intensity by 6% compared to 2022 and by 8% compared to the base 2015 year.\n\nIn the last two years, the combined effect of the increase in imports, especially in 2022, the high inventories in the distribution chain and the energy crisis, exacerbated by the invasion of Ukraine, has led to a decline in stainless steel production. This decrease worsened the indicator of energy intensity per tonne of steel produced, although the total volume of emissions decreased due to the increased use of renewable energy. Acerinox has increased its renewable energy contracts and has certificates for 616,880 MWh (2022: 284,750 MWh), a 117% increase compared to the previous year.\n\n**3. Waste reduction target:** 90% waste recycled in 2030.\n\nDuring the year, Acerinox reached 80% of recycled waste, 1% higher than in 2022.\n\n**4. Water consumption:** 20% reduction in freshwater consumption intensity by 2030 compared to the 2015 baseline.\n\nDuring the year 2023, Acerinox reduced water consumption by 3% vs the previous year, a reduction of 18% over the base year of 2015.\n\nThe impact of climate risk on financial statements are both wide-ranging and potentially complex and will depend on sectorspecific risks. When analysing future business estimates, probability scenarios are presented in which not only the physical consequences of climate change are assessed, but also the changes in environmental regulations to deal with it. These are the so-called physical risks and transitional risks of climate change, with both having economic and financial consequences.\n\nThe impact of climate risk on the Group's financial statements is structured into three main areas: analysis of the recoverability of non-financial assets, determination of the useful lives of plants and equipment and credit ratings.\n\nWith regard to recoverability analyses of non-financial assets, the Group has incorporated climate risk in the estimates, making the corresponding forward-looking judgments. The growth rates used and discount and risk rates are market ratios that also implicitly reflect the valuation of climate risk. These rates do not differ significantly from those applied in previous years. Due to the nature of the business, we feel that there is no material impact from climate change risk that would indicate impairment for any of the Group's CGUs or their inventories.\n\n{52}------------------------------------------------\n\nImage /page/52/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle that is open on the left side.\n\nRegarding the determination of useful lives set out in **Note 3**, Group management determines the estimated useful lives and related depreciation charges of its plant and equipment based on valuations carried out by experts, taking into account technical innovations, variations in the activity levels of the plants, regulatory changes etc. Management periodically reviews the depreciation charge, which is modified whenever the estimated useful lives are different from the lives previously applied. The recurrent maintenance plans and investment proposals carried out by the factories take into account efficiency objectives and adaptation to new technologies, thus contributing to climate change.\n\nWith regard to credit ratings and the limitation that regulations impose on financial institutions to provide financing to unsustainable companies, the European Commission has published its classification of sustainable finance, which serves as a tool to help financial agents and companies define which activities are considered as such. The EU Taxonomy provides a universal definition of the environmental sustainability of economic activities at European level and contributes to the dissemination of consistent and transparent information on how companies are progressing in line with EU-wide transition plans and contributing to the EU's environmental objectives. In accordance with the provisions of the Regulation, companies subject to the presentation of their Non-Financial Information Statement must include in their directors' reports information related to the degree of sustainability of their activities. In particular, non-financial companies must disclose the proportion of turnover, capital expenditure and operating expenditure (capex and opex) that complies with the Taxonomy Regulation. Implementation is being phased in progressively.\n\nThe first exercise carried out in 2022 was to identify the potential activities that could be considered sustainable (eligibility) based on the above indicators. In 2023, an assessment has been made of the technical criteria provided for in the Regulation, which will determine the alignment of activities with the Taxonomy.\n\nIn terms of eligibility criteria, stainless-steel fabrication has been considered, according to the taxonomy regulation, as a potentially sustainable (eligible) activity.\n\nThe activity, in addition to being eligible, must demonstrate that it meets the requirements of Article 3 of the Regulation which, in summary, are:\n\n- Substantial contribution to one or more of the six EU environmental objectives.\n- It does not cause significant harm to the other environmental objectives (Do No Significant Harm -DNSH-).\n- It complies with the minimum social safeguards.\n\nSo far, the technical criteria of substantial contribution to Objectives 1 and 2 (climate change mitigation and adaptation) contained in Annex I and II of the Climate Delegated Regulation have been adopted. In the case of stainless steel, these technical criteria only apply to electric arc installations and set specific thresholds for the carbon intensity indicator per tonne of product and the percentage of scrap used.\n\nThe Group has published in its non-financial information report revenue, capex and opex indicators based on alignment criteria, which determine the proportion of each of these items coming from products or services related to economic activities that are considered aligned.\n\nAt year-end, there are six sustainable financing facilities with an outstanding amount of EUR 647.4 million. These loans tie the financing cost to the performance of two established indicators that are reviewed annually. The first four sustainable loans signed in 2020 and 2021 have a KPI linked to the annual reduction in CO2e emission intensity (Scope 1 + 2) and the other indicator is linked to the annual reduction of the accidents with leave frequency rate. The last sustainable loan signed at the end of 2021 and novated in June 2022 retains the first KPI linked to CO2e emissions (Scope 1 + 2) and replaces the KPI for accidents with leave with a KPI that measures the increase in renewable energy intensity. The latest sustainable financing facility was signed in 2022 by VDM, where the margin is dependent on the VDM Group's rating issued by Ecovadis. Failure to meet the two KPIs would result in a very marginal increase in the cost of these financing facilities, but in no case would it result in the early maturity of these.\n\n**Note 8** details the fixed assets whose purpose is the minimisation of environmental impact and the protection and improvement of the environment, as well as the environmental expenses incurred by the Group.\n\n#### **4.5 Capital management**\n\nThe aims of the capital management policy are:\n\n- to safeguard the Group's capacity to continue its sustained growth;\n- to provide sufficient returns to shareholders; and\n- to maintain an optimal capital structure.\n\n{53}------------------------------------------------\n\nImage /page/53/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif, uppercase letters. The word is positioned inside a blue circle that is open at the top.\n\nThe Company manages its capital structure and makes adjustments to it based on changes in economic circumstances. To maintain and adjust the capital structure, the Company can adopt various policies relating to the payment of dividends, the reimbursement of the issue premium, share repurchases, self-financing of investments, non-current borrowings, etc.\n\nCapital structure is controlled using various ratios, such as the net financial debt/EBITDA ratio, understood to be the period necessary for the resources generated by the Company to cover the level of debt; or the gearing ratio, i.e. the relationship between the net financial debt and equity of the Company.\n\nNet financial debt is taken to be the sum of current and non-current bank borrowings, plus bonds issued, less cash and cash equivalents. EBITDA reflects profit or loss from operations, less depreciation and amortisation, changes in operating provisions and allowances, and impairment losses recognised in the year.\n\nThe \"net financial debt/EBITDA\" ratio is 0.49x (2022: 0.35x), which is very satisfactory in our sector.\n\nOne of the Group's strategic pillars is the maintenance of its financial strength, which is defined as sustainable cash generation over time in order to utilise capital efficiently and generate shareholder value. Cash generation continues to be one of the primary objectives. In 2023, despite the lower results achieved by management to reduce the Group's working capital, particularly inventories, an operating cash flow of EUR 481 million was generated (2022: EUR 544 million). Working capital has been reduced this year by EUR 79 million (2022: increased by EUR 479 million due to strong business activity and higher raw material prices).\n\nFollowing investment payments of EUR 175 million (2022: EUR 126 million), generated free cash flow amounted to EUR 307 million (2022: EUR 419 million).\n\nIn 2023, the Company invested EUR 150 million in shareholder remuneration, representing a payout of 66% (payout calculated as dividend paid/net profit attributable to the Group).\n\nA cash payment of EUR 0.6 per share has been made in 2023. In accordance with Acerinox's Dividend Policy, the total shareholder remuneration is maintained, so that the reduction in the number of shares as a result of the last share buyback plan results in a higher payment per share. The Board of Directors of Acerinox, S.A., held on 20 December 2023, has agreed to propose to the Shareholders' Meeting the payment of a dividend of EUR 0.62 per share, i.e. an increase of 3.33% over the last approved dividend, of which EUR 0.31 gross per share were payable in cash on 26 January 2024.\n\nDuring the year, Acerinox, S.A.'s share capital has been reduced, as approved by the Annual General Meeting held on 23 May 2023, through the amortisation of 10,388,974 treasury shares with a value of EUR 2,597 thousand. The purpose of this reduction of share capital is to increase the value of the shareholders' stake in the Company.\n\nThe Group's net financial debt decreased by EUR 99 million to EUR 341 million (2022: EUR 440 million).\n\nThe gearing ratio stood at 13.85%, a 25-year low.\n\nReturn on Capital Employed (ROCE) in 2023 was 13.34% (2022: 29.3%). The adjusted ROCE, without taking into account the asset impairment would be 17.9%, exceeding the Group's target of 15%, as explained in **Note 8.1**. ROCE is calculated by dividing the operating result (EBIT) in the consolidated statement of profit or loss by the capital employed, i.e. equity plus net financial debt.\n\nAs of 31 December 2023, the Acerinox Group had liquidity amounting to EUR 2,465 million. Of this, EUR 1,794 million corresponds to cash and cash equivalents and short-term deposits and EUR 672 million to available financing at various Group subsidiaries.\n\nThe Group continuously monitors the maturity profile of its financial debt in order to establish the longest possible annual maturities. As explained in both Notes 4.3 and 12.2.3, the Group has continued with the active management of its financing facilities by contracting, renewing and/or extending them.\n\nAt year-end, the Group's outstanding sustainable financing amounted to EUR 647.4 million. The majority of the Group's financing at 31 December 2023 corresponded to loans and private placements. Of these, almost 80% were due to mature in over a year. In addition, 70% of the Group's loans and private placements are at fixed interest rates (these figures include those loans closed at variable interest rates but hedged with an interest rate derivative).\n\n{152}------------------------------------------------\n\nImage /page/152/Picture/1 description: The image contains a logo with the word \"ACERINOX\" in bold, sans-serif font. The text is positioned to the left of a circular graphic, which is colored in blue. The logo appears to be for a company named Acerinox.\n\n## **2.3 Risk Management**\n\n**Acerinox has implemented a risk management model backed by the board of directors and senior management. It aims to identify, evaluate and mitigate the risks inherent to the sector in which it operates, as well as their impact on the Group's financial goals and strategic objectives to the continued benefit of its stakeholders.**\n\nAcerinox recognizes its exposure to risks of various types and natures, which may affect both its financial and nonfinancial results. The identification and effective management of these risks is key to business success. To this end, the Company has implemented an Enterprise Risk Management (ERM) program aligned with the COSO ERM framework, covering all of the Group's business areas and overseen by the Board of Directors:\n\nImage /page/152/Figure/5 description: The image shows a diagram of the three lines of defense model. The first line of defense is operations management. The second line of defense is ERM, which includes scope and context, risk assessment (risk identification, risk analysis, risk evaluation), and treatment. Communication and monitoring are also part of the second line of defense. The third line of defense is internal auditing. Above the three lines of defense are the senior management committee/CFO and the board of directors/audit committee. To the right of the three lines of defense are external auditing and regulator.\n\nImage /page/152/Picture/6 description: The image shows a series of white, triangular structures against a clear blue sky. The structures appear to be part of a building or architectural design, possibly a roof or facade. They are made of a grid-like pattern of white lines, creating a geometric and modern aesthetic. The perspective is from below, looking up at the structures, which emphasizes their height and the pattern against the sky.\n\n{153}------------------------------------------------\n\nImage /page/153/Picture/1 description: The image shows the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle that is not fully closed, creating a crescent shape around the text. The background is white.\n\n## **Main risks**\n\nThe Group's ERM model establishes a risk management methodology aimed at simplifying, unifying and homogenizing risk assessment across the Group's companies. The risk taxonomy is divided into six categories. The main risks within each category are detailed below, as well as the most important measures or plans designed to mitigate them:\n\n| Category      | Main risks                                                         | Description and examples                                                                                                                                                                                                                                                                                                                                                                                                                                             | Main responses                                                                                                                                                                                                                                                                                                                              |\n|---------------|--------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| External      | Economic cycles                                                    | The global economic and geopolitical<br>environment may be affected by tensions and<br>adverse changes affecting stainless steel and,<br>therefore, the Acerinox Group's business in its<br>main markets.                                                                                                                                                                                                                                                            | Strategic Plan and Beyond<br>Excellence underway at the Acerinox<br>Group                                                                                                                                                                                                                                                                   |\n|               | Geopolitical                                                       | Geopolitical tensions arising from Russia's<br>invasion of Ukraine, the Israel-Hamas conflict<br>or the growing tension between China and<br>Taiwan can hamper economic development<br>and put stress on supply chains.                                                                                                                                                                                                                                              | Constant global monitoring to<br>mitigate and/or anticipate economic<br>impacts and potential supply chain<br>disruptions                                                                                                                                                                                                                   |\n|               | Trade barriers and<br>competitiveness                              | Acerinox is a group that works across the<br>globe; its activities span multiple countries<br>and are exposed to different regulatory<br>frameworks. Due to the global nature of the<br>business, the Group is exposed to possible<br>risks arising from the existence and/or<br>elimination of trade restrictions such as anti-<br>dumping/anti-subsidy tariffs, export<br>restrictions, special control measures, etc.                                             | Monitoring of global trade and<br>geopolitical trends with an active<br>presence in the main local and<br>international organizations and<br>institutions                                                                                                                                                                                   |\n| ESG           | CO2 emissions                                                      | In matters relating to environmental, social<br>and corporate governance (ESG), the most<br>significant risks are those related to the                                                                                                                                                                                                                                                                                                                               | Concrete plans to reduce CO2 and<br>improve efficiency                                                                                                                                                                                                                                                                                      |\n|               | Energy                                                             | reduction of CO2 emissions, energy and<br>occupational health and safety.<br>Acerinox has targets for 2030 linked to these                                                                                                                                                                                                                                                                                                                                           | Energy efficiency plans for each<br>facility.                                                                                                                                                                                                                                                                                               |\n|               | Health and safety                                                  | three areas; the specific action plans can be<br>found in the corresponding sections of this<br>report.                                                                                                                                                                                                                                                                                                                                                              | Preventive maintenance programs,<br>safety awareness campaigns,<br>training plans                                                                                                                                                                                                                                                           |\n|               | Climate change<br>(emerging risk)                                  | In addition, climate change was identified as<br>an emerging risk, so transition risks and<br>physical were assessed following TCFD (more<br>information in the Eco-efficiency and climate<br>change mitigation chapter)                                                                                                                                                                                                                                             | Decarbonization plan.<br>Implementation of energy efficiency<br>measures, increased use of<br>renewable energies and greater use<br>of sustainable fuels.                                                                                                                                                                                   |\n| Financial     | Raw material price<br>volatility                                   | The production of stainless steel and high-<br>performance alloys requires raw materials,<br>mainly nickel, ferrochromium, molybdenum,<br>and scrap. For the most part, commodity<br>prices are subject to significant volatility due<br>to the aforementioned geopolitical tensions.                                                                                                                                                                                | Alloy surcharge mechanisms and/or,<br>if applicable, financial hedges to try<br>to minimize the impact of the<br>volatility of the main raw materials<br>(nickel, chrome, etc.)                                                                                                                                                             |\n|               | Macroeconomic, market<br>and third-party insolvency<br>variables   | This same context may put special stress on<br>different macroeconomic and market<br>variables, such as interest rates, exchange<br>rates and commodity prices, and likewise the<br>insolvency of third parties. These are risks<br>that the Group faces in its daily operations in<br>order to achieve its financial targets                                                                                                                                        | Partially insure the risk through<br>financial hedging mechanisms and<br>commercial credit insurance policies.<br>There is an internal commercial<br>credit risk management instruction<br>as well as a global Commercial Risk<br>Committee.                                                                                                |\n| Technological | Cybersecurity                                                      | Increased cybercrime has led to greater risks<br>for the company's operations. The<br>development of Al puts the spotlight on the<br>risks associated with new technologies.<br>Cyberattacks can lead to business<br>interruption and the loss of critical<br>information, as well as loss of customer and<br>supplier confidence and the imposition of<br>governmental fines.                                                                                       | The company added a Global CISO in<br>2023. Reporting to the CEO, the<br>CISO will lead the deployment of the<br>cybersecurity strategy. The<br>Cybersecurity Master Plan is<br>underway; this will increase our<br>protection capacity and improve our<br>response to potential threats                                                    |\n| Operational   | Supply chain. Availability<br>of raw materials / basic<br>supplies | The availability of raw materials and, in<br>general, of the supply chain is essential to<br>maintain the continuity of the production<br>process. Events such as the recent Israel-<br>Hamas conflict, the first impact of which has<br>caused transportation problems across the<br>Red Sea, highlight the risks to which supply<br>chains are exposed.<br>Risks affecting transportation, access to raw<br>materials, or availability of other basic<br>supplies. | Reduction of specific consumption.<br>The Group strives to maintain<br>adequate stability in the supply<br>chain, monitoring the quality and<br>reliability of the main suppliers of<br>raw materials, such as nickel and<br>chrome, as well as the other basic<br>supplies necessary to ensure the<br>continuity of our production process |\n| Strategic     | Strategic plans                                                    | The execution and correctness of the<br>strategic plans implemented by the company<br>always comes with a risk of not achieving the<br>targets set. Strategic investments, M&A<br>processes, plans for improvement and target<br>achievement, etc.                                                                                                                                                                                                                   | Regular review of climates and<br>variables that may affect the<br>achievement of strategic plans                                                                                                                                                                                                                                           |\n\n{154}------------------------------------------------\n\nImage /page/154/Picture/1 description: The image contains the logo of Acerinox, a stainless steel manufacturing company. The logo features the word \"ACERINOX\" in bold, sans-serif font, enclosed within a blue circle. The wordmark is positioned in the center of the circle, with the letters slightly curved to conform to the circular shape. The blue circle has a thick outline, giving the logo a clean and modern appearance.\n\n#### **Emerging risks**\n\nThe Group is exposed to many complex, interconnected risks, conditioned by changes in the business context of a globalized, changing world in turmoil. In this context, in addition to the risk taxonomy, Acerinox pays attention to emerging risks, understood as new or unforeseen risks that have not yet been considered or whose potential damages or losses are not fully known.\n\nEmerging risks, uncertain by nature, are a challenge to identify, assess, and mitigate. In this regard, Acerinox monitors global megatrends and the development of geopolitical tensions; likewise, it may review both the internal environment and specialized third-party publications that anticipate emerging risks which may affect the Group, either directly or indirectly.\n\nAmong the aforementioned emerging risks are those associated with climate change, new areas of transformation in the technological context, new regulation linked to sustainability, the transition towards a low-emissions economy, the effect of the evolution of artificial intelligence (AI) and their implications for cybersecurity and disinformation, as well as their repercussions in the geopolitical and economic sphere.\n\nImage /page/154/Picture/7 description: The image shows a low-angle shot of a modern bridge against a clear blue sky. The bridge features a large, curved white arch from which numerous thin, dark cables descend diagonally. These cables are evenly spaced and create a pattern of converging lines. At the top of the arch, thicker cables run horizontally. The composition is framed by a light purple bar at the top and a larger light purple rectangle at the bottom, adding a graphic element to the architectural photograph.\n\n{155}------------------------------------------------\n\nImage /page/155/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is a dark blue color. The text is enclosed within a circular line, also in dark blue. The background is white.\n\n#### **Review of the cybersecurity model**\n\nIn an increasingly technological world, cyber-threats and security challenges are becoming ever more significant due to their impact on the organization. Their impacts could range from the loss of sensitive data to damage to physical assets or reduced product/service quality, even threatening business continuity itself.\n\nAcerinox believes that it is essential to develop an effective way to manage risks associated with technology, in particular those related to cybersecurity.\n\nThis philosophy is based on the understanding that cybersecurity is one of the essential pillars for the protection of the Group's digital assets and sensitive information. A proactive approach is therefore crucial to safeguarding operational integrity and continuity, as well as to preserve stakeholder confidence, with a special focus on customers.\n\nAcerinox's growing commitment to cybersecurity is reflected in robust governance structures staffed by information security experts, its constant strategy reviews and adherence to internationally-recognized standards such as the ISO/IEC 27001:2017 information security management systems standard, a certification Acerinox has held since 2022.\n\nIn this area, the company added a Global CISO (Chief Information Security Officer) in 2023. Reporting to the CEO, the CISO will lead the deployment of the cybersecurity strategy. Likewise, it has a robust cybersecurity governance structure consisting of a corporate information security committee, chaired by the group CEO and also including the CIO, the director of compliance, the chief legal officer, the chief risk officer and the Group's global CISO. Acerinox also has information security and cybersecurity committees in each business unit that ensure this function is applied consistently throughout the organization.\n\nTo ensure independent control and oversight, the cybersecurity function is subject to regular review by the Audit Committee. Since 2023, the Group has been busy implementing its three-year cybersecurity master plan, which is focused on strengthening the technological, organizational and procedural elements that guarantee that cybersecurity risks as managed properly. This plan is regularly reviewed and updated in order to respond to the shifting cyber-threat landscape.\n\nUnderstanding this landscape means not only taking preventive measures, but also promoting an organizational culture that fosters awareness and shared responsibility in this area. Employee training and awareness is another indispensable pillar for proper cybersecurity management. With these premises in mind, the Group carries out constant training and awareness-raising actions for the entire workforce to promote best practices and mitigate possible risks.\n\nTo this end, Acerinox has a security operations center (SOC) supported by top-tier suppliers, whose purpose is to provide continuous surveillance and an effective response to potential incidents.\n\nAll these efforts reflect the Group's determination to continue managing cybersecurity challenges in a robust, proactive way, thus ensuring that information and assets are protected against potential threats and emerging risks.\n\nImage /page/155/Picture/12 description: The image shows a close-up of a modern building with a glass facade. The glass panels are arranged in a geometric pattern, with some panels angled to create a dynamic and visually interesting effect. The sky is reflected in the glass, creating a sense of depth and openness. The building appears to be well-maintained and in good condition.\n\n{179}------------------------------------------------\n\nImage /page/179/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a partial blue circle. The circle appears to be incomplete, with the word \"ACERINOX\" placed within the open space of the circle. The color of the text is the same blue as the circle, creating a cohesive and recognizable brand identity.\n\nAt year-end 2023, the Spanish stock market reported a 26% drop in trading volume compared to 2022 and a 15% drop in average daily cash traded (Source: BME Market Report 2023).\n\nAt December 31, 2023, Acerinox's market capitalization was EUR 2,657 million (EUR 2,400 million in 2022).\n\nImage /page/179/Picture/4 description: In the image, a worker wearing a hard hat and ear protection is standing in front of a complex network of pipes and machinery. He is holding a tablet in his hands and appears to be interacting with the screen. The worker is wearing a dark blue uniform with a light-colored stripe on the shoulder. The pipes and machinery in the background are various sizes and colors, and they create a sense of depth and complexity. The lighting in the image is somewhat dim, which adds to the industrial atmosphere.\n\n#### **Market capitalization of Acerinox, S.A.**\n\nImage /page/179/Figure/6 description: The image is a line graph showing market capitalization in EUR million from 2009 to 2023. The y-axis ranges from 0 to 5000 in increments of 2500. The x-axis shows the years 2009, 2011, 2013, 2015, 2017, 2019, 2021, and 2023.\n\n## **4.5 Shareholder remuneration**\n\nIn 2023, Acerinox shareholders received EUR 150 million in dividends. The Annual Shareholders' Meeting also approved the redemption of 10,388,974 treasury shares held as part of the buyback program approved by the board of directors on July 27, 2022 (carried out from August 1 to October 26, 2022).\n\n#### **Dividend payment**\n\nAs established in the dividend policy approved by the board of directors in December 2022, an interim dividend of EUR 0.30 gross per share was paid for 2022 to shareholders on January 27, 2023.\n\nIn addition, following approval by the 2023 Annual Shareholders' Meeting, a supplementary dividend of EUR 0.30 gross per share for 2022 was paid on July 17. The total paid to shareholders in 2023 was consequently EUR 0.60 gross per share, 20% higher than the 2022 dividend.\n\nThe board meeting of December 20, 2023, resolved to propose to the next Annual Shareholders' Meeting a total remuneration for 2024 of EUR 0.62 gross per share, 3.3% more than the previous year:\n\n- Interim dividend for 2023 of EUR 0.31 gross per share, paid in January 26, 2024.\n- Supplementary dividend of EUR 0.31 gross per share to be paid in July.\n\n#### **Shareholder remuneration policy**\n\nThe purpose of the dividend policy, approved by the board of directors in December 2022, is to establish the essential principles that will govern the shareholder compensation agreements submitted by the board of directors to the Acerinox Annual Shareholders' Meeting for approval, connecting shareholder compensation to the Group's financial results.\n\nProposals for shareholder compensation must be sustainable and compatible with the maintenance of financial soundness.\n\nProvided that market conditions, the Group's earnings performance, and net debt does not exceed 1.2x the average EBITDA for the cycle permit, the board of directors may resolve to provide extraordinary shareholder remuneration through share buyback plans or the payment of extraordinary dividends pursuant to authorization at the Annual Shareholders' Meeting.\n\nAs a general rule, the dividend will be paid in two tranches:\n\n- A payment on account in January.\n- A supplementary payment in July.\n\nThis policy may be revised when there are significant and tangible organic and/or inorganic investments in the short term or when conditions so advise.\n\n{180}------------------------------------------------\n\nImage /page/180/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, positioned inside a blue circle. The circle is not fully closed, with a gap at the top right, giving it a crescent shape.\n\n## **4.6 European taxonomy on sustainable finance**\n\nThe European taxonomy is part of the European Commission's action plan for financing sustainable growth, which aims to redirect capital flows to sustainable activities. To achieve this, a common language and a clear definition of \"sustainable\" are needed. To this end, the European taxonomy was created, and a common classification system for sustainable economic activities was established.\n\nIn June 2020, European Union Regulation 2020/852 was approved, establishing the criteria for determining whether or not an investment can be classified as sustainable. The aforementioned European taxonomy regulation established six environmental objectives:\n\n- **1.** Climate change mitigation;\n- **2.** Climate change adaptation;\n- **3.** Sustainable use and protection of water and marine resources;\n- **4.** Transition to a circular economy;\n- **5.** Pollution prevention and control;\n- **6.** Protection and restoration of biodiversity and ecosystems.\n\nSubsequently, the European Union adopted delegated acts supplementing Regulation 2020/852. In December 2021, the delegated act related to climate change mitigation and adaptation objectives was approved, with the delegated act related to the rest of the objectives following in December 2023. The delegated acts set out the technical criteria for substantial contributions to each objective, determine whether an economic activity causes significant harm to the other environmental objectives and establish minimum social safeguards.\n\nIn accordance with Regulation 2020/852, non-financial companies must report on the proportion of their revenue, Capex and Opex associated with sustainable activities to determine whether they comply with the taxonomy regulation.\n\nAcerinox is a specialist in the manufacture and distribution of stainless steel and high-performance alloys with a presence on five continents.\n\nIts production network comprises 13 factories. The Group has six stainless steel factories: four flat product plants (three of which are integral: Acerinox Europa, North American Stainless and Columbus Stainless; and one with cold-rolling: Bahru Stainless) and two long product plants. The other seven (split between the US and Germany) produce high-performance alloys.\n\nThe integrated production process consists of three stages: melting, hot rolling and cold rolling.\n\nDuring the melting process, raw materials (scrap, ferro-alloys and other elements) are melted down to make stainless steel. First, the product is melted in electric arc furnaces, reaching temperatures of 1,600 degrees Celsius. Once melted, it is transferred to the AOD converter, where the alloy is refined. The resulting material is transferred using a ladle to the continuous casting machine, where the slag is removed and the product is refined.\n\nImage /page/180/Picture/17 description: The image shows a low-angle view of several modern skyscrapers. The buildings are primarily constructed of glass and steel, reflecting the sky and surrounding structures. The sky is visible in the background, appearing light and clear. The composition emphasizes the height and scale of the buildings, creating a sense of urban grandeur.\n\n{181}------------------------------------------------\n\nImage /page/181/Picture/1 description: The image contains the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged horizontally within a white circle. A thick, blue crescent shape partially surrounds the circle, creating a visual frame around the text.\n\nSubsequently, in the hot rolling stage, the thickness or diameter is reduced, taking advantage of the higher ductility of the material at high temperatures.\n\nIn the hot rolling mill, the slabs are heated in a walking beam furnace, then pass successively through a roughing mill and a finishing mill, with entry and exit furnaces. Later, steam jets are used to descale and clean the surface. The resulting range of products is finally passed to a coiler that winds them, creating coils.\n\nIn the last stage, cold rolling, the material is subjected to heat treatment, then undergoes a mechanical and chemical process to remove surface oxidation. Acerinox has conducted a comprehensive analysis to assess which of its activities may be eligible under the six objectives of the taxonomy. These potential eligible activities are then cross-referenced with the definitions in the taxonomy to identify the Group's eligible activities.\n\n| The company's<br>activity                                               | Eligible activity                                                            | Eligible and potentially<br>aligned activity                       |\n|-------------------------------------------------------------------------|------------------------------------------------------------------------------|--------------------------------------------------------------------|\n| The activity is identified<br>in Annex I of the<br>Delegated Regulation | Does it contribute<br>substantially to the 6<br>environmental<br>objectives? | Does it adhere to<br>the \"Do no<br>significant harm\"<br>principle? |\n| ELIGIBILITY                                                             |                                                                              | ALIGNMENT                                                          |\n|                                                                         |                                                                              | Does it comply<br>with the<br>minimum social<br>safeguards?        |\n\nAcerinox has an analysis tool that records the data used and the results thereof, serving as a document manager and guaranteeing the traceability of the information.\n\n### **Eligibility**\n\nThe Group has identified potentially eligible economic activities for these environmental objectives.\n\n- **Climate change mitigation:** manufacture of basic iron and steel and ferro-alloys.\n- **Climate change adaptation:** manufacture of basic iron and steel and ferro-alloys; flood risk prevention and protection infrastructure.\n- **Transition to a circular economy:** valorization of hazardous and non-hazardous waste materials, renovation of existing buildings and preparation to reuse products and product components at the ends of their useful lives.\n\nAcerinox also carries out other cross-cutting activities related to its core business that also fall under the objective of climate change mitigation.\n\nOnce potentially eligible activities have been identified, the activities included on the taxonomy list are reviewed. Specifically, this involves those included in the Climate Delegated Act (mitigation and adaptation) and in the Delegated Act for the other objectives (water and marine resources, circular economy, pollution prevention, and biodiversity).\n\nFor this purpose, the precise definition of the activities carried out is reviewed, as well as their correspondence with the statistical classification of economic activities as set out in Regulation (EC) No 1893/2006 (NACE codes\\*). The activities carried out by Acerinox are included in Group C. Manufacturing industry, subgroup 24. Metallurgy: manufacture of iron and steel and of ferro-alloys.\n\nActivities falling under NACE subgroups C24.10, C24.20, C24.31, C24.32, C24.33, C24.34, C24.51 and C24.52 qualify as transitional (eligible) activities under article 10(2) of Regulation (EU) 2020/852 when they meet the technical eligibility criteria.\n\nFor each Group company, the applicable NACE code has been identified and compared with the previous codes. Likewise, an exhaustive analysis of the activities carried out by each Group company is carried out, verifying that these activities comply with the definition provided by the European taxonomy.\n\n{182}------------------------------------------------\n\nImage /page/182/Picture/1 description: The image contains the word \"ACERINOX\" in blue, stacked vertically, and enclosed in a blue circle that is open on the left side.\n\nAccording to this analysis, the infrastructure activities of prevention and protection against related flood risks, valorization of hazardous and non-hazardous waste materials, renovation of existing buildings and preparation to reuse products and product components at the ends of their useful lives that may be considered eligible. However, given the nature of the stainless steel production, which includes both upstream and downstream processes, these activities fall within the production process and are therefore grouped under the climate change mitigation objective.\n\nIn this regard, the company is working on improving the information's granularity level in order to assess whether there are significant adaptation measures to be calculated as part of economic activities linked to the adaptation target.\n\nIn conclusion, the manufacture of basic iron and steel and ferro-alloys (NACE 24.20) linked to the climate change mitigation objective is considered eligible.\n\n| Code | Name of the activity            | Description                                              | Taxonomic target             | Alignment |\n|------|---------------------------------|----------------------------------------------------------|------------------------------|-----------|\n| 3.9  | Iron and steel<br>manufacturing | Manufacture of basic iron and steel<br>and ferro-alloys. | Climate change<br>mitigation | YES       |\n\nThis eligible activity does not include the production of high-performance alloys, nor the production of stainless steel long products.\n\n#### **Alignment**\n\nThe activity, in addition to being eligible, must demonstrate that it meets the requirements set out in article 3 of the regulation, summarized as follows:\n\n- Substantial contribution to one or more of the six EU environmental objectives.\n- It does not cause significant detriment to the other environmental objectives (Do No Significant Harm, DNSH).\n- Compliance with minimum social safeguards.\n\nImage /page/182/Picture/12 description: The image shows the steel framework of a building under construction against a blue sky. The framework consists of vertical steel beams supporting horizontal beams and trusses. The trusses are made of diagonal steel bars that form a triangular pattern. The steel is dark gray or blue-gray in color. The sky is a light blue color with no clouds visible.\n\n{183}------------------------------------------------\n\nImage /page/183/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, enclosed within a blue circle.\n\n#### **Substantial contribution**\n\nIn relation to the climate change mitigation objective, appendices I and II of the Delegated Climate Regulation establish the technical criteria for substantial contribution.\n\nSpecifically, paragraph 3.9 states the following: the activity consists of the manufacture of one of the following products: Steel in electric arc furnaces (EAF) producing EAF carbon steel or EAF high alloy steel as defined in Commission Delegated Regulation (EU) 2019/331 and where the steel scrap input relative to production output is:\n\n- 70% for the production of high alloy steel;\n- 90% for the production of carbon steel.\n\nIn the case of Acerinox, some Group companies were not aligned in this analysis as they are part of the production chain but do not have EAFs in their facilities; therefore, the significant contribution criterion could not be measured. The companies at which the substantial contribution criterion can be measured are Acerinox Europa, NAS and Columbus.\n\nTherefore, in order for these companies' activity to be considered aligned in accordance with activity 3.9, 70% of stainless steel production must come from scrap. The percentage of scrap used at each of the identified companies has been calculated; all three companies exceed the established threshold, reaching scrap usage ratios above 90%.\n\nFollowing the analysis of the substantial contribution criteria for the different eligible activities, the compliance of these activities with the do no significant harm (DNSH) principle, explained below, has been assessed.\n\n### **Compliance with the principle of do no significant harm (DNSH)**\n\nCompliance with the conditions set out to do no significant harm to the other environmental objectives for each of the companies identified was then verified.\n\n#### **Climate change adaptation**\n\nThe Group conducted an analysis of physical and transitional climate risks in the medium and long term (2030 and 2050) with the help of an external consultant. Physical risks were assessed using IPCC climate projections, namely the SSP 1-2.6 (RCP2.6) and SSP 5- 8.5 (RCP8.5) scenarios, for each of the company facilities identified.\n\nThe assessment showed significant risks related to water stress and flooding at some facilities; the Group quantified the financial impacts of the relevant risks there and established climate change adaptation plans. As a result of this analysis, in 2023, the Company implemented adaptation measures to mitigate the impact of the Group's most significant risks. In relation to the risk of flooding, the main equipment was raised to protect it, and the necessary containment and drainage measures were established to channel the water. In relation to the risk of water stress and drought, water consumption efficiency measures have been implemented, and investments have been made in treatment and recovery plants. For the stainless steel division, which includes the companies under analysis, a water withdrawal reduction target was set.\n\nRegarding the risk associated with the development of mechanisms and taxes on carbon emissions, energy efficiency and emissions reduction measures were implemented. Actions were also taken to increase the consumption of renewable electricity. In addition, studies were carried out on the replacement of natural gas consumption with low-carbon fuels (hydrogen and biomethane); and carbon capture, storage and use projects were analyzed. For the stainless steel division, a carbon intensity reduction target was set.\n\nA global climate change adaptation plan will also be implemented by 2024.\n\nImage /page/183/Picture/17 description: The image shows two large, silver pipes running vertically. The pipe on the left has a black arrow pointing downwards, with a symbol above it that looks like a horizontal line with two small squares above and below it. The pipe on the right has a black arrow pointing upwards, with the letter 'H' below it. In the background, there is a tall metal structure with multiple lights on top, and other pipes and industrial equipment can be seen.\n\n{184}------------------------------------------------\n\nImage /page/184/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open on the left side, creating a crescent shape that surrounds the text. The text is black, and the blue circle has a glossy appearance.\n\nImage /page/184/Picture/2 description: The image shows a close-up, low-angle view of a complex network of steel beams and supports, likely part of a building's infrastructure. The beams are arranged in a crisscrossing pattern, creating a sense of depth and complexity. The lighting is somewhat dim, casting shadows that accentuate the geometric shapes and lines of the structure. The overall impression is one of industrial strength and architectural design.\n\n#### **Sustainable use and protection of water and marine resources**\n\nAcerinox Europa, Columbus, and NAS have an integrated environmental authorization and all other legally required permits regarding water pollution prevention, and groundwater and surface water extraction and use. At facilities located in water-stressed areas, improvement actions were set out within the framework of the environmental management objectives.\n\nSection 5.2 Eco-efficiency and climate change mitigation provides further information on this area, specifically in the \"Water stewardship\" section. This includes a case study of the Palmones factory (Acerinox Europa). Appendix 6.2 Supplementary information includes detailed information on water withdrawal, consumption and discharge in areas with and without scarcity.\n\nEnvironmental impact assessments were also carried out at the facilities without identifying any risk of environmental degradation to the bodies of water. In 2023, the water footprint of each Group company was analyzed. For facilities that discharge water into rivers, such as NAS, the gray water footprint has been calculated to estimate the degree of pollution associated with a process step. It was concluded that the concentration of contaminants at the NAS facilities was less than 1,000 mg/l.\n\nIn addition, it was evaluated whether the activity of aligned companies has a negative or hindering impact on seawater. The only company that discharges water into the sea is Acerinox Europa. Water is discharged into the Bay of Algeciras through a general collector managed by the Major Industries Association of Campo de Gibraltar. This discharge is subject to regular analysis in accordance with the Plan for the Monitoring and Control of the Receiving Environment for Discharges into the Bay of Algeciras.\n\nIn the case of Columbus, given that it is located in a water-stressed area, a zero-effluent discharge operation is used.\n\nFinally, NAS has strict measures in place to prevent, avoid and act in the event of spills or discharges resulting from the storage of other substances. The facility has neutralization plants to treat acidic and basic waters, as well as emergency berms to prevent spills into the outside environment and other safety apparatus to eliminate possible spills. The tanks are equipped with a permanent secondary containment mechanism, as well as cleaning and emergency shutdown services. The final effluent water is discharged back into the Ohio River in equal or better condition than it was withdrawn, thus avoiding any possible environmental impact.\n\n#### **Transition to a circular economy**\n\nIn accordance with the specifications established in the European Taxonomy, the iron and steel manufacturing activity has no impact on this objective. Therefore, no additional disclosure is required.\n\n#### **Pollution prevention and control**\n\nAcerinox's activity complies with the emission and discharge limits established in the Best Available Techniques (BAT), as well as with the applicable regulations regarding the presence of hazardous substances in equipment and products.\n\nEach year, the facilities of Acerinox Europa, Columbus, and NAS conduct an assessment of their compliance with environmental legal requirements under the ISO 14001 standard. This standard establishes a specific management procedure through which the organization can monitor the environmental aspects of its activities that may affect the environment in one way or another, either positively or negatively.\n\nLikewise, internal and external ISO14001 certification audits regularly include compliance evaluations for the aforementioned requirements.\n\nAt Acerinox Europa, the Regional Government of Andalusia's technical services team carries out regular legal compliance evaluations as part of their monitoring program for certain facilities.\n\nLikewise, an exhaustive analysis was performed on the products used by Acerinox Europa, Columbus and NAS in their manufacturing and sale processes, in accordance with the specifications established in the taxonomy regulations.\n\nIt concluded that none of the Acerinox Europa, Columbus or NAS facilities manufacture or market organic compounds, substances, or mixtures contained them. The same is the case for substances listed in Article 57 of the REACH Regulation and mercury-added products. Companies take measures to avoid the use of metallic material containing mercury, using the applicable industry BAT. Purchase contracts with suppliers also specify the requirements that the scrap must meet.\n\nThe facilities only use authorized substances with ozone-depleting potential in auxiliary operations, as part of the refrigeration equipment, and in accordance with the operating, maintenance and waste management requirements established in national standards.\n\n{185}------------------------------------------------\n\nImage /page/185/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not fully closed, with a gap on the right side.\n\nThe stainless steel product does not contain elements or substances covered by Directive 2011/65 in quantities exceeding the values indicated in Appendix II, as attested by the Acerinox Europa, Columbus, and NAS Declaration of Restriction of certain Hazardous Substances (RoHS) in electrical and electronic equipment.\n\n#### **Protection and restoration of biodiversity and ecosystems**\n\nAcerinox carries out environmental impact assessments in accordance with applicable regulations.\n\nAcerinox Europa's nearest protected area, the Palmones River Marshes Nature Park, is less than 500 meters away on the northwest side. The protected area's governmental charter (ES6120006) states that in there are several uses in the immediate surroundings of this natural area, among which industrial use stands out, with major industries such as Acerinox, the Los Barrios power plant, and the Palmones I and II industrial estates located nearby. In 2018, the Company conducted an environmental assessment study that took into account Directives 2009/147/EC and 92/43/EEC, among others. The study concluded that Acerinox Europa's activity does not generate any type of impact on any protected area.\n\nOn the other hand, Columbus is located within 50 km of a protected area. Although its activity does not affect said protected area, the company has a biodiversity plan that protects native flora and fauna. In partnership with a local landscaping contractor, it also actively monitors native plant species to avoid possibly altering the local ecosystem.\n\nThe NAS facility is located near a wetland, a protected area administered by the US Army Corps of Engineers. The scope of protection of this agency is not equivalent to the protected areas established in the European Natura 2000 network regulations.\n\nHowever, NAS cannot directly or indirectly affect the wetland without a permit from the US Army Corps of Engineers. Any potential expansion or change in the operating conditions of its activities that may affect the area must include an environmental impact study and permit application.\n\nPreventive measures have been put in place at NAS. For example, we assessed the presence of endangered species in the immediate vicinity to ensure that expanding our activities in the future would not affect protected species. In addition, training activities were carried out for factory personnel so that they are aware of the applicable prohibitions and limits, as was the placement of signs around the borders of the protected area, and access was banned.\n\n#### **Compliance with minimum social safeguards**\n\nAcerinox complies with minimum social safeguards in terms of human rights, corruption and bribery, fair competition, and taxation.\n\nThe Group's global human rights policy is available on the company website and sets out Acerinox's commitments regarding the management of human rights, in accordance with the principles established in the United Nations Universal Declaration of Human Rights, the declaration on fundamental principles and rights at work and its follow-up by the ILO (International Labor Organization), and the Guiding Principles on Business and Human Rights of the United Nations.\n\nAcerinox continues to work on developing a human rights due diligence process by identifying, preventing and mitigating current and potential negative impacts on human rights arising from own, Group, and value-chain activities. No human rights violation reports were received in 2023. For more information, see chapter 5.1 Ethical, responsible and transparent corporate governance, in the section on the human rights due diligence model.\n\nThe Group extends its commitment to sustainability to the entire value chain. Acerinox has a responsible procurement policy, available on the company website, that outlines general principles for purchasing goods and services (including economic, competitive, social, and environmental aspects), and simultaneously defines the Group's objectives and core action framework rolled out in all its companies.\n\nImage /page/185/Picture/15 description: A scenic view of snow-covered mountains under a clear blue sky is captured from behind a metal railing. The mountains are rugged and rocky, with patches of snow clinging to their surfaces. The sky is a deep blue, with a few wispy clouds scattered across it. The metal railing is in the foreground, providing a sense of perspective and depth to the image.\n\n{186}------------------------------------------------\n\nAdditionally, a code of conduct for business partners was established, which defines Acerinox's principles and requirements with respect to its suppliers of goods and services, and vis-à-vis intermediaries, advisors and other Group business partners. The aforementioned code is an essential requirement for the establishment of any contractual relationship with Acerinox. The principles and requirements included are based on the Group's code of conduct and good practices, general contracting conditions, general purchasing policy, and other Company corporate policies. In addition, they are aligned with the 10 principles of the Global Compact, ILO, etc.\n\nThe new Group purchasing strategy 2023-2027 is based on three pillars, one of which is specifically related to compliance with ESG standards and the management of risks inherent in the supply chain. This detailed information is available in this section of chapter 5.5 Supply chain and community impact.\n\nRelatedly, the Group's crime prevention program is aimed at eliminating the risk of committing criminal acts, especially those that entail criminal liability for the legal entity, including risks related to corruption and bribery, competition, and so on. This program includes several phases: updating of protocols and monitoring, self-assessment of monitoring, evaluation and certification, and the action and training plan.\n\nIn 2023, AENOR conducted an external audit of the crime prevention program as part of the certification process under UNE 19601: Management system for criminal compliance. For more information, see chapter 5.1 Ethical, responsible and transparent corporate governance, specifically the section on the crime prevention program.\n\nIn addition, as a sign of its commitment to best practices in tax matters, Acerinox is a signatory to the Code of Good Tax Practices, actively participates in the Tax Forum of Large Companies and has voluntarily submitted, for the second consecutive year, a tax transparency report to the Spanish tax agency.\n\nAs a result of this commitment, the Company was awarded the \"T for Transparent 2022\" seal for responsible taxation and good governance by the Haz Foundation.\n\nThe Group publishes its integrated annual report on the company website. The report includes details of its tax contribution in the countries where it operates, as well as the general tax policy. For more information, see chapter 5.1 Ethical, responsible and transparent corporate governance, specifically the responsible taxation section.\n\nImage /page/186/Figure/8 description: The image shows three donut charts, each representing a different category: Turnover, Capex, and Opex. The Turnover chart indicates that 71% is aligned turnover and 29% is non-aligned turnover. The Capex chart shows that 77% is aligned Capex and 23% is non-aligned Capex. The Opex chart shows that 87% is aligned Opex and 13% is non-aligned Opex. The ACERINOX logo is in the upper right corner.\n\nIn appendix 6.3. Taxonomy-related information includes details on the calculation of financial indicators and ratios related to revenue, Capex and Opex.\n\n{187}------------------------------------------------\n\n## **5. Sustainable management model**\n\n**GRI 3-3**\n\nImage /page/187/Picture/3 description: The image shows a low-angle view of a modern building with a glass facade, reflecting the sky and clouds. The building's structure is defined by a grid of dark, possibly black, frames that create a pattern of rectangular windows. To the right of the building, there is a dense cluster of green leaves, suggesting trees or foliage. The sky is visible through the leaves and in the reflections on the glass, with a mix of blue and white clouds. The overall composition is a blend of architectural and natural elements.\n\nAcerinox is committed to best practices in governance and sustainability to contribute to economic and social development. To this end, it has a responsible management model that structures, coordinates and strengthens the activities necessary to make this a reality.\n\nIn order to guide targets and ensure the sustainability of our business, a sustainability committee was created in 2020 within the board of directors. The Sustainability Director, a direct report of the CEO, reports to the Sustainability Committee. Their purpose is to supervise and promote actions related to the Group's commitment to sustainability.\n\nAcerinox has a regulatory framework with a sustainability policy and a suite of complementary policies laying out the commitments and procedures in a slew of areas, such as risk management, climate change mitigation, defense of human rights, equality, diversity, inclusion, and responsible procurement. These are all available on the company website.\n\nFor the deployment and implementation of our commitment to sustainability, the company has a sustainability plan, Positive Impact 360º, which responds to the ESG risks and materiality analysis, identifies the levers of value generation, and establishes long-term objectives to make this a reality.\n\nPositive Impact 360º sets out the Group's main environmental, social and corporate governance initiatives. This multi-year plan is implemented through annual sustainability programs defined and agreed with the Group's different areas and factories. These programs are a legitimate tool for achieving continuous improvement in responsible execution.\n\nIn 2023, Acerinox worked hard to make progress in the systematization of sustainability management, through procedures that implement the policies and enable better performance of duties, such as the assessment of ESG criteria in the supply chain, management of climate change risks, and transparent reporting of related information. The sections below expound upon the most relevant activities in these areas.\n\n## **Materiality analysis**\n\n#### **GRI 2-29 / 3-1 / 3-2 / 3-3**\n\nIn 2022 the Acerinox Group reviewed and updated the material issues. This analysis process made it possible to identify risks and opportunities, and to better understand the needs and expectations of key stakeholders. To this end, Acerinox consulted customers, shareholders, employees, financial backers, and suppliers, among others, in order to prioritize the most important issues and learn more about these stakeholders' level of satisfaction with the Group's performance. The consultation process included online questionnaires and one-on-one interviews with over 500 professionals, with a response rate of 50%.\n\nThe most relevant issues for stakeholders were health and safety, product safety and sustainability, supply chain, ethics and compliance, and circular economy. The Group was well rated across all aspects, particularly in product safety and sustainability, circular economy, financial management, and supply chain.\n\nAcerinox also performed specific analysis to review ESG risks, i.e. those associated to environmental, social and corporate governance matters, following the same methodology as that applied in the corporate risk management model. This analysis revealed the most relevant risks to be those related to health and safety and the Company's decarbonization.\n\nPhysical risks and transition risks related to climate change were identified as emerging or long-term risks (see detailed information in chapter 5.2 Eco-efficiency and climate change mitigation).\n\nBased on this information and other external sources, material issues were prioritized. Shown below is the materiality matrix approved by the board of directors' Sustainability Committee.\n\n{267}------------------------------------------------\n\n#### **\\_Wage gap by professional category (%)**\n\n|                      | 2023   | 2022    | 2021   |\n|----------------------|--------|---------|--------|\n| Director             | 22.00% | -13.10% | -4.36% |\n| Manager              | 24.00% | 11.75%  | 5.31%  |\n| Analyst              | 25.00% | 12.89%  | 12.95% |\n| Specialist           | 22.00% | 5.99%   | 10.29% |\n| Administrative staff | 19.00% | 16.60%  | 17.21% |\n| Operator             | 12.00% | 15.39%  | 17.14% |\n\n#### **\\_Average base salary (EUR)**\n\n|                      | 2023        |             | 2022        |             | 2021        |             |\n|----------------------|-------------|-------------|-------------|-------------|-------------|-------------|\n|                      | Men         | Women       | Men         | Women       | Men         | Women       |\n| Director             | EUR 187,638 | EUR 160,164 | EUR 215,013 | EUR 156,961 | EUR 207,477 | EUR 148,538 |\n| Manager              | EUR 109,318 | EUR 87,818  | EUR 106,057 | EUR 88,026  | EUR 104,094 | EUR 84,637  |\n| Analyst              | EUR 68,709  | EUR 51,117  | EUR 67,320  | EUR 48,274  | EUR 65,055  | EUR 49,385  |\n| Specialist           | EUR 55,264  | EUR 44,124  | EUR 53,659  | EUR 41,713  | EUR 49,263  | EUR 38,058  |\n| Administrative staff | EUR 51,016  | EUR 41,610  | EUR 49,938  | EUR 40,632  | EUR 47,301  | EUR 39,134  |\n| Operator             | EUR 30,364  | EUR 26,608  | EUR 29,467  | EUR 25,984  | EUR 29,209  | EUR 23,929  |\n\n## **\\_Ratio of base female/male salary by professional category \\*\\***\n\n| GRI 405-2 |  |\n|-----------|--|\n|           |  |\n\n|                      | 2023 | 2022 | 2021 |\n|----------------------|------|------|------|\n| Director             | 0.85 | 1.08 | 1.00 |\n| Manager              | 0.80 | 0.92 | 0.96 |\n| Analyst              | 0.74 | 0.87 | 0.87 |\n| Specialist           | 0.79 | 0.95 | 0.90 |\n| Administrative staff | 0.82 | 0.87 | 0.87 |\n| Operator             | 0.88 | 0.88 | 0.85 |\n\n\\* Only those categories in which both genders are represented are included in the calculation of the gap\n\n{268}------------------------------------------------\n\n#### **6.3 Information regarding the European taxonomy**\n\n#### **Calculation of financial indicators**\n\nAcerinox has defined a procedure to facilitate the identification of the financial information to be reported associated with eligible activities and/or aligned with the EU Taxonomy. Specifically, the procedure assists in the reporting of:\n\n- **Quantitative information**: information on (1) revenue, (2) Capex and (3) Opex of sustainable and nonsustainable activities. (See table with breakdown of quantitative information.)\n- **Qualitative information**: qualitative information consists of three blocks: (1) accounting policies, which include the form and basis on which KPIs were determined, referring to the affected items in the NFIS; (2) compliance assessment, which involves an analysis of how the eligibility of activities has been identified, indicating the nature of the economic activities and explaining the conduct of the assessment of the criteria for eligibility. In addition, an explanation of how any double counting of the three key indicators has been avoided is included; and (3) contextual information, which involves a breakdown of each of the KPIs, identifying the items included in the calculation of each KPI.\n\nThe procedure for obtaining quantitative data follows the following sequence:\n\n- **1.** Identification of data to calculate indicators. Firstly, the necessary information is collected from the Acerinox Group's IT systems. This information is taken from the consolidated data closed in the corresponding year. It is extracted from the information in the consolidation program with the highest level of account detail, considering the consolidated financial statements.\n- **2.** Reconciliation with the annual accounts at heading level.\n- **3.** Selection of the accounts to be included in the calculation of the ratios. The sum of the income and expense accounts is taken from the consolidation application. The amounts relating to investments are taken from the table showing movement in property, plant and equipment in the notes to the annual accounts. For the preparation of the notes to the Group's annual accounts, consolidation packages are received from all companies with the disclosures required by the notes, including movements in property, plant and equipment. All packages are automatically uploaded into the spreadsheets for the notes and reconciled with the account balances.\n- **4.** Contribution per company to each of these accounts in order to exclude amounts corresponding to companies whose activities are not aligned. From the consolidation application, the contribution per company to the balances of the accounts selected in the previous section is extracted.\n- **5.** Calculation of the ratios.\n\t- **i.** Revenue: total revenue is the sum of the Group's consolidated revenue, as shown in the consolidated income statement of the financial statements. Revenue mainly reflects the Group's sales of stainless steel and special alloys,\n\nIn order to calculate revenue from eligible activities, the contribution to the consolidated figure by each of the companies in the consolidation perimeter is extracted from the Group's consolidation systems. Revenue from eligible activities is the aggregate sum of the contribution to consolidated revenue of the companies considered eligible, in accordance with the definition provided in Note 4.6\n\nTo calculate revenue from aligned activities, the consolidated sales figure corresponding to the products of each factory is extracted from the Group's management systems and reconciled with the consolidated revenue figure. Once reconciled, only the total sales of products manufactured by Acerinox Europa, North American Stainless, and Columbus would be included as revenue from aligned activities.\n\nImage /page/268/Picture/15 description: The image shows a close-up of a modern building's exterior. The building features a pattern of alternating dark and light panels, creating a striped effect. The dark panels appear to be recessed, casting shadows that add depth to the facade. Some windows are visible, reflecting a clear blue sky. The overall composition is abstract and emphasizes the geometric shapes and lines of the building's design.\n\n{269}------------------------------------------------\n\n**ii.** Capex: the Group's total Capex corresponds to its total investments in both tangible and intangible fixed assets. It is reported in the Group's consolidated financial statements and is disclosed in the Investments section of the Property, plant, and equipment note in these financial statements.\n\nTo calculate Capex pertaining to eligible activities, the contribution of each of the companies in the consolidation perimeter to the consolidated figure is extracted from the Group's consolidation systems, and the amounts of the investments corresponding to eligible entities are aggregated.\n\nThe Capex pertaining to aligned activities is calculated by multiplying the investment made by each of the companies considered eligible by the percentage contribution to the alignment. To calculate the contribution to the alignment of each entity, the sales of products manufactured by Acerinox Europa, North American Stainless, and Columbus are divided by the entity's total sales. This contribution percentage, calculated for each of the eligible entities, is used as the alignment contribution percentage.\n\n**iii.** Opex: to calculate total Opex, only the following items are taken into account from the total operating expenses in the consolidated financial statements: R&D expenses, maintenance, and operating leases. Total Opex is calculated as the sum of these three expense accounts, which are part of the consolidated Group's accounting plan and are identified in the consolidation program. In the memo note that includes the breakdown of operating expenses (Note 17.3), both the maintenance and lease totals are broken down; these are the two most significant categories, as the R&D expenses recorded as Opex are relatively insignificant.\n\nOpex pertaining to eligible activities corresponds to the aggregate sum of maintenance expenses, leasing expenses, and R&D expenses at the eligible companies. To calculate this figure, the contribution of each Group company to these three items is extracted from the consolidation systems and only those corresponding to the three aligned entities are added\n\nTo determine the Opex pertaining to aligned activities, the total expenses of each company considered eligible are multiplied by the percentage contribution to the alignment. The percentage contribution to the alignment is calculated as explained above.\n\nBy calculating the ratios based on data obtained from the consolidated financial statements, any possible double counting is avoided, since all intra-group transactions that could have an impact on two companies are eliminated beforehand in the consolidation process.\n\nThe variations in the ratios with respect to previous years are a consequence of the volume of activity at the Group's different plants to meet market demand.\n\n{270}------------------------------------------------\n\n#### **2023 Year Substantial contribution criteria Do no significant harm criteria**\n\n| Economic<br>activities (1)                                                                                                                                       | Code<br>(2) | Revenue<br>(3) | Proportion<br>of revenue,<br>year N (4) | Climate<br>change<br>mitigation<br>(5) | Climate<br>change<br>adaptation<br>(6) | Water (7) | Pollution<br>(8) | Circular<br>economy<br>(9) | Biodiversity<br>(10) | Climate<br>change<br>mitigation<br>(11) | Climate<br>change<br>adaptation<br>(12) | Water (13) | Pollution<br>(14) | Circular<br>economy<br>(15) | Biodiversity<br>(16) | Minimum<br>safeguards<br>(17) | Proportion<br>of revenue<br>conforming<br>to<br>taxonomy<br>(A.1) or<br>eligible<br>according<br>to<br>taxonomy<br>(A.2), year<br>2022 (18) | Facilitating<br>activity<br>category<br>(19) | Transitory<br>activity<br>category<br>(20) |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|----------------|-----------------------------------------|----------------------------------------|----------------------------------------|-----------|------------------|----------------------------|----------------------|-----------------------------------------|-----------------------------------------|------------|-------------------|-----------------------------|----------------------|-------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------------------------------|\n| Text                                                                                                                                                             |             | Currency       | %                                       | Y;N;N/EL                               | Y;N;N/EL                               | Y;N;N/EL  | Y;N;N/EL         | Y;N;N/EL                   | Y;N;N/EL             | Y/N                                     | Y/N                                     | Y/N        | Y/N               | Y/N                         | Y/N                  | Y/N                           | %                                                                                                                                           | F                                            | t                                          |\n| A. ELIGIBLE ACTIVITIES ACCORDING TO TAXONOMY                                                                                                                     |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| A.1 Environmentally sustainable activities (conforming to the taxonomy)                                                                                          |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Manufacture of<br>iron and steel<br>(CNAE 12.24)                                                                                                                 | CCM<br>3.9  | 4,662,750      | 70.6%                                   | Y                                      | N/EL                                   | N/EL      | N/EL             | N/EL                       | N/EL                 | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | 74.0%                                                                                                                                       | F                                            | t                                          |\n| Revenue from<br>environmentally<br>sustainable<br>activities<br>(conforming to<br>the taxonomy)<br>(A.1)                                                         |             | 4,662,750      | 70.6%                                   | 70.6%                                  | -%                                     | -%        | -%               | -%                         | -%                   | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | 74.0%                                                                                                                                       |                                              |                                            |\n| Of which:<br>facilitating                                                                                                                                        |             | 0              | -%                                      | -%                                     | -%                                     | -%        | -%               | -%                         | -%                   | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | -%                                                                                                                                          | F                                            |                                            |\n| Of which:<br>transitional                                                                                                                                        |             | 4,662,750      | 71%                                     | 71%                                    | -%                                     | -%        | -%               | -%                         | -%                   | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | 74%                                                                                                                                         |                                              | t                                          |\n| A.2 Activities eligible under the taxonomy but not environmentally sustainable (activities that do not conform to the taxonomy)                                  |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n|                                                                                                                                                                  |             |                |                                         | EL; N/EL                               | EL; N/EL                               | EL; N/EL  | EL; N/EL         | EL; N/EL                   | EL; N/EL             |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Manufacture of<br>iron and steel<br>(CNAE 12.24)                                                                                                                 | CCM<br>3.9  | 489,688        | 7.4%                                    | EL                                     | N/EL                                   | N/EL      | N/EL             | N/EL                       | N/EL                 |                                         |                                         |            |                   |                             |                      |                               | 11.2%                                                                                                                                       |                                              |                                            |\n| Revenue from<br>taxonomy-<br>eligible but not<br>environmentally<br>sustainable<br>activities<br>(activities that do<br>not conform to<br>the taxonomy)<br>(A.2) |             | 489,688        | 7.4%                                    | 7.4%                                   | -%                                     | -%        | -%               | -%                         | -%                   |                                         |                                         |            |                   |                             |                      |                               | 11.2%                                                                                                                                       |                                              |                                            |\n| A. Revenue from<br>taxonomy<br>eligible activities<br>(A.1+A.2)                                                                                                  |             | 5,152,439      | 78.0%                                   | 78.0%                                  | -%                                     | -%        | -%               | -%                         | -%                   |                                         |                                         |            |                   |                             |                      |                               | 85.2%                                                                                                                                       |                                              |                                            |\n| B. NON-ELIGIBLE ACTIVITIES ACCORDING TO THE<br>TAXONOMY                                                                                                          |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Revenue from non-eligible<br>activities under the<br>taxonomy                                                                                                    |             | 1,455,539      | 22.0%                                   |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Total                                                                                                                                                            |             | 6,607,978      | 100%                                    |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n\n{271}------------------------------------------------\n\n#### **Proportion of revenue/Total revenue**\n\n|                                                                 | Taxonomic alignment by target | Eligible taxonomy by target |\n|-----------------------------------------------------------------|-------------------------------|-----------------------------|\n| Climate change mitigation                                       | 70.6%                         | 78.0%                       |\n| Climate change adaptation                                       | 0%                            | 0%                          |\n| Sustainable use and protection of water and<br>marine resources | 0%                            | 0%                          |\n| Transition to a circular economy                                | 0%                            | 0%                          |\n| Pollution prevention and control                                | 0%                            | 0%                          |\n| Protection and restoration of biodiversity and<br>ecosystems    | 0%                            | 0%                          |\n\n{272}------------------------------------------------\n\n#### **\\_Capex**\n\n| 2023                                                                                           | Year       | Substantial contribution criteria |                                           |                                        |                                        |           | Do no significant harm criteria |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n|------------------------------------------------------------------------------------------------|------------|-----------------------------------|-------------------------------------------|----------------------------------------|----------------------------------------|-----------|---------------------------------|----------------------------|-----------------------|-----------------------------------------|-----------------------------------------|------------|----------------|-----------------------------|-----------------------|-------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------------------------------|\n| Economic activities (1)                                                                        | Code (2)   | Capex (3)                         | Proportio<br>n of<br>Capex,<br>year N (4) | Climate<br>change<br>mitigation<br>(5) | Climate<br>change<br>adaptation<br>(6) | Water (7) | Pollution (8)                   | Circular<br>economy<br>(9) | Biodiversit<br>y (10) | Climate<br>change<br>mitigation<br>(11) | Climate<br>change<br>adaptation<br>(12) | Water (13) | Pollution (14) | Circular<br>economy<br>(15) | Biodiversit<br>y (16) | Minimum<br>safeguards<br>(17) | Proportion<br>of revenue<br>conforming<br>to<br>taxonomy<br>(A.1) or<br>eligible<br>according<br>to<br>taxonomy<br>(A.2), year<br>2022 (18) | Facilitating<br>activity<br>category<br>(19) | Transitory<br>activity<br>category<br>(20) |\n| Text                                                                                           |            | Currency                          | %                                         | Y;N;N/EL                               | Y;N;N/EL                               | Y;N;N/EL  | Y;N;N/EL                        | Y;N;N/EL                   | Y;N;N/EL              | Y/N                                     | Y/N                                     | Y/N        | Y/N            | Y/N                         | Y/N                   | Y/N                           | %                                                                                                                                           | F                                            | t                                          |\n| A. ELIGIBLE ACTIVITIES ACCORDING TO TAXONOMY                                                   |            |                                   |                                           |                                        |                                        |           |                                 |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n| A.1 Environmentally sustainable activities (conforming to the taxonomy)                        |            |                                   |                                           |                                        |                                        |           |                                 |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n| Manufacture of iron<br>and steel (CNAE 12.24)                                                  | CCM<br>3.9 | 134,110                           | 76.7%                                     | Y                                      | N/EL                                   | N/EL      | N/EL                            | N/EL                       | N/EL                  | Y                                       | Y                                       | Y          | Y              | Y                           | Y                     | Y                             | 76%                                                                                                                                         | F                                            | t                                          |\n| Capex of<br>environmentally<br>sustainable activities<br>(conforming to the<br>taxonomy) (A.1) |            | 134,110                           | 76.7%                                     | 76.7%                                  | — %                                    | — %       | — %                             | — %                        | — %                   | Y                                       | Y                                       | Y          | Y              | Y                           | Y                     | Y                             | 76%                                                                                                                                         |                                              |                                            |\n| Of which: facilitating                                                                         |            | 0                                 | — %                                       | — %                                    | — %                                    | — %       | — %                             | — %                        | — %                   | Y                                       | Y                                       | Y          | Y              | Y                           | Y                     | Y                             | — %                                                                                                                                         | F                                            |                                            |\n|                                                                                                |            |                                   |                                           |                                        |                                        |           |                                 |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n\nA.2 Activities eligible under the taxonomy but not environmentally sustainable (activities that do not conform to the taxonomy)\n\n| Manufacture of iron<br>and steel (CNAE 12.24) 3.9                                                                                               | CCM<br>1,156 | 0.7%  | EL    | N/EL | N/EL | N/EL | N/EL | N/EL | 4.9%  |\n|-------------------------------------------------------------------------------------------------------------------------------------------------|--------------|-------|-------|------|------|------|------|------|-------|\n| Capex of taxonomy-eligible but not<br>environmentally<br>sustainable activities<br>(activities that do not<br>conform to the<br>taxonomy) (A.2) | 1,156        | 0.7%  | 0.7%  | — %  | — %  | — %  | — %  | — %  | 4.9%  |\n| A.Capex of taxonomy-eligible activities<br>(A.1+A.2)                                                                                            | 135,266      | 77.4% | 77.4% | — %  | — %  | — %  | — %  | — %  | 80.9% |\n| B. NON-ELIGIBLE ACTIVITIES ACCORDING TO THE<br>TAXONOMY                                                                                         |              |       |       |      |      |      |      |      |       |\n| Capex of non-eligible activities<br>according to taxonomy                                                                                       | 39,519       | 22.6% |       |      |      |      |      |      |       |\n| Total                                                                                                                                           | 174,785      | 100%  |       |      |      |      |      |      |       |\n\nOf which: transitional 134,110 76.7% 76.7% — % — % — % — % — % Y Y Y Y Y Y Y 76% t\n\n{273}------------------------------------------------\n\n#### **Ratio of Capex / Total Capex**\n\n|                                                                 | Taxonomic alignment by target | Eligible taxonomy by target |\n|-----------------------------------------------------------------|-------------------------------|-----------------------------|\n| Climate change mitigation                                       | 76.7%                         | 77.4%                       |\n| Climate change adaptation                                       | 0%                            | 0%                          |\n| Sustainable use and protection of water and<br>marine resources | 0%                            | 0%                          |\n| Transition to a circular economy                                | 0%                            | 0%                          |\n| Pollution prevention and control                                | 0%                            | 0%                          |\n| Protection and restoration of biodiversity and<br>ecosystems    | 0%                            | 0%                          |\n\n{274}------------------------------------------------\n\n#### **\\_Opex**\n\n| 2023                                                                                                                                                                  | Year        | Substantial contribution criteria |                                      |                                        |                                        |           |                  | Do no significant harm criteria |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|-----------------------------------|--------------------------------------|----------------------------------------|----------------------------------------|-----------|------------------|---------------------------------|-----------------------|-----------------------------------------|-----------------------------------------|------------|-------------------|-----------------------------|-----------------------|-------------------------------|------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------------------------------|\n| Economic activities<br>(1)                                                                                                                                            | Code<br>(2) | Opex (3)                          | Proportion<br>of Opex,<br>year N (4) | Climate<br>change<br>mitigation<br>(5) | Climate<br>change<br>adaptation<br>(6) | Water (7) | Pollution<br>(8) | Circular<br>economy<br>(9)      | Biodiversit<br>y (10) | Climate<br>change<br>mitigation<br>(11) | Climate<br>change<br>adaptation<br>(12) | Water (13) | Pollution<br>(14) | Circular<br>economy<br>(15) | Biodiversit<br>y (16) | Minimum<br>safeguards<br>(17) | Proportion<br>of Opex<br>conforming<br>to<br>taxonomy<br>(A.1) or<br>taxonomy-<br>eligible<br>(A.2), year<br>2022 (18) | Facilitating<br>activity<br>category<br>(19) | Transitory<br>activity<br>category<br>(20) |\n| Text                                                                                                                                                                  |             | Currency                          | %                                    | Y;N;N/EL                               | Y;N;N/EL                               | Y;N;N/EL  | Y;N;N/EL         | Y;N;N/EL                        | Y;N;N/EL              | Y/N                                     | Y/N                                     | Y/N        | Y/N               | Y/N                         | Y/N                   | Y/N                           | %                                                                                                                      | F                                            | t                                          |\n| A. ELIGIBLE ACTIVITIES ACCORDING TO TAXONOMY                                                                                                                          |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| A.1 Environmentally sustainable activities (conforming to the taxonomy)                                                                                               |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Manufacture of iron<br>and steel (CNAE<br>12.24)                                                                                                                      | CCM<br>3.9  | 76,582                            | 87.4%                                | Y                                      | N/EL                                   | N/EL      | N/EL             | N/EL                            | N/EL                  | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | 75.0%                                                                                                                  | F                                            | t                                          |\n| Opex of<br>environmentally<br>sustainable<br>activities<br>(conforming to the<br>taxonomy) (A.1)                                                                      |             | 76,582                            | 87.4%                                | 87.4%                                  | 0%                                     | 0%        | 0%               | 0%                              | 0%                    | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | 75.0%                                                                                                                  |                                              |                                            |\n| Of which:<br>facilitating                                                                                                                                             |             | 0                                 | — %                                  | — %                                    | 0%                                     | 0%        | 0%               | 0%                              | 0%                    | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | — %                                                                                                                    | F                                            |                                            |\n| Of which:<br>transitional                                                                                                                                             |             | 76,582                            | 87%                                  | 87%                                    | — %                                    | 0         | 0                | 0                               | 0                     | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | 75%                                                                                                                    |                                              | t                                          |\n| A.2 Activities eligible under the taxonomy but not environmentally sustainable (activities that do not conform to the taxonomy)                                       |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n|                                                                                                                                                                       |             |                                   |                                      | EL; N/EL                               | EL; N/EL                               | EL; N/EL  | EL; N/EL         | EL; N/EL                        | EL; N/EL              |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Manufacture of iron<br>and steel (CNAE<br>12.24)                                                                                                                      | CCM<br>3.9  | 8,756                             | 10.0%                                | EL                                     | N/EL                                   | N/EL      | N/EL             | N/EL                            | N/EL                  |                                         |                                         |            |                   |                             |                       |                               | 5.2%                                                                                                                   |                                              |                                            |\n| Opex of eligible<br>activities according<br>to the taxonomy but<br>not environmentally<br>sustainable<br>(activities that do<br>not conform to the<br>taxonomy) (A.2) |             | 8,756                             | 10.0%                                | 10.0%                                  | — %                                    | — %       | — %              | — %                             | — %                   |                                         |                                         |            |                   |                             |                       |                               | 5.2%                                                                                                                   |                                              |                                            |\n| A. Opex of<br>taxonomy-eligible<br>activities (A.1+A.2)                                                                                                               |             | 85,338                            | 97.4%                                | 97.4%                                  | — %                                    | — %       | — %              | — %                             | — %                   |                                         |                                         |            |                   |                             |                       |                               | 80.4%                                                                                                                  |                                              |                                            |\n| B. NON-ELIGIBLE ACTIVITIES ACCORDING TO THE<br>TAXONOMY                                                                                                               |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Opex of non-eligible activities<br>according to taxonomy (B)                                                                                                          |             | 2,315                             | 2.6%                                 |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Total                                                                                                                                                                 |             | 87,653                            | 100%                                 |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n\n{275}------------------------------------------------\n\n#### **Ratio of Opex / Total Opex**\n\n|                                                                 | Taxonomic alignment by target | Eligible taxonomy by target |\n|-----------------------------------------------------------------|-------------------------------|-----------------------------|\n| Climate change mitigation                                       | 87.4%                         | 97.4%                       |\n| Climate change adaptation                                       | 0%                            | 0%                          |\n| Sustainable use and protection of water and<br>marine resources | 0%                            | 0%                          |\n| Transition to a circular economy                                | 0%                            | 0%                          |\n| Pollution prevention and control                                | 0%                            | 0%                          |\n| Protection and restoration of biodiversity and<br>ecosystems    | 0%                            | 0%                          |\n\n{276}------------------------------------------------\n\n#### **\\_Nuclear and fossil gas related activities**\n\n| Row | Nuclear energy related activities                                                                                                                                                                                                                                                                                                             |    |\n|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|\n| 1   | The undertaking carries out, funds or has exposures to research, development,<br>demonstration and deployment of innovative electricity generation facilities that produce<br>energy from nuclear processes with minimal waste from the fuel cycle.                                                                                           | NO |\n| 2   | The undertaking carries out, funds or has exposures to construction and safe operation of<br>new nuclear installations to produce electricity or process heat, including for the purposes of<br>district heating or industrial processes such as hydrogen production, as well as their safety<br>upgrades, using best available technologies. | NO |\n| 3   | The undertaking carries out, funds or has exposures to safe operation of existing nuclear<br>installations that produce electricity or process heat, including for the purposes of district<br>heating or industrial processes such as hydrogen production from nuclear energy, as well as<br>their safety upgrades.                          | NO |\n|     | Fossil gas related activities                                                                                                                                                                                                                                                                                                                 |    |\n| 4   | The undertaking carries out, funds or has exposures to construction or operation of<br>electricity generation facilities that produce electricity using fossil gaseous fuels.                                                                                                                                                                 | NO |\n| 5   | The undertaking carries out, funds or has exposures to construction, refurbishment, and<br>operation of combined heat/cool and power generation facilities using fossil gaseous fuels.                                                                                                                                                        | NO |\n| 6   | The undertaking carries out, funds or has exposures to construction, refurbishment and<br>operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.                                                                                                                                                          | NO |\n\n{286}------------------------------------------------\n\nImage /page/286/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right, giving it a crescent shape.\n\n## **6.6 TCFD table of contents**\n\n| Area                | Recommended TCFD disclosures                                                                                                                                      | Page / Reference |\n|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|\n| Governance          | a) Describe the board's oversight of climate-related<br>risks and opportunities                                                                                   | 81-85            |\n|                     | b) Describe management's role in assessing and<br>managing climate-related risks and opportunities                                                                | 81-85            |\n| Strategy            | a) Describe the climate-related risks and opportunities<br>the organization has identified over the short,<br>medium, and long term                               | 82-84            |\n|                     | b) Describe the impact of climate-related risks and<br>opportunities on the organization's businesses,<br>strategy, and financial planning                        | 82-84            |\n|                     | c) Describe the resilience of the organization's<br>strategy, taking into consideration different climate<br>related scenarios, including a 2°C or lower scenario | 81-86            |\n| Risk management     | a) Describe the organization's processes for identifying<br>and assessing climate-related risks                                                                   | 81-86            |\n|                     | b) Describe the organization's processes for managing<br>climate-related risks                                                                                    | 81-86            |\n|                     | c) Describe how processes for identifying, assessing,<br>and managing climate-related risks are integrated into<br>the organization's overall risk management     | 81-86            |\n| Metrics and targets | a) Disclose the metrics used by the organization to<br>assess climate-related risks and opportunities in line<br>with its strategy and risk management process    | 81-86            |\n|                     | b) Disclose Scope 1, Scope 2, and, if appropriate,<br>Scope 3 greenhouse gas (GHG) emissions, and the<br>related risks                                            | 86-88, 95        |\n|                     | c) Describe the targets used by the organization to<br>manage climate-related risks and opportunities and<br>performance against targets                          | 66, 81-95        |\n\n{287}------------------------------------------------\n\nImage /page/287/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word \"ACERINOX\" is in a lighter color, possibly white or light gray, which contrasts with the darker blue of the circle.\n\n## **6.7 NFIS table of contents**\n\n| Information required by the Non-financial<br>Information Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Associated reporting criteria<br>(GRI Standard)                                               | Page / Reference     |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|----------------------|\n| Finance model                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                               |                      |\n| Taxonomy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Regulation (EU) 2020/852                                                                      | 56-62, Appendix 6.3  |\n| Business model                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                               |                      |\n| Brief description of the Group's business model<br>(business environment and organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2-1 Organizational details                                                                    | 13-18                |\n| Geographical presence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 2-2 Entities included in the<br>organization's sustainability<br>reporting                    | 10-16                |\n| Organization's objectives and strategies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics                                                          | 5-16, 24-27          |\n| Key factors and trends that could affect future<br>performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3-3 Management of material<br>topics                                                          | 19-23                |\n| Environmental topics                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                               |                      |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                               |                      |\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics                                                          | 63-65, 81-82, 85, 97 |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated and allowing<br>for comparisons to be drawn between companies<br>and industries, in line with the benchmark national,<br>European or international frameworks used for each<br>topic.                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics                                                          | 66-67                |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 201-2 Financial implications<br>and other risks and<br>opportunities due to climate<br>change | 85-87                |\n| Actual and foreseeable effects of the Company's<br>activities on the environment and, as the case may<br>be, health and safety                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 201-2 Financial implications<br>and other risks and<br>opportunities due to climate<br>change | 85-87                |\n| Environmental assessment or certification<br>procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 3-3 Management of material<br>topics                                                          | 81-95                |\n| Resources allocated to preventing environmental<br>risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics                                                          | 81-95                |\n| Application of the precautionary principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 3-3 Management of material<br>topics                                                          | 82                   |\n| Amount of provisions and guarantees for<br>environmental risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3-3 Management of material<br>topics                                                          | 82                   |\n| Pollution                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                               |                      |\n\n{288}------------------------------------------------\n\nImage /page/288/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, enclosed within a blue circle. The word \"ACERINOX\" is also in blue.\n\nMeasures to prevent, reduce or remedy emissions seriously affecting the environment, factoring in any specific form of atmospheric pollution of an activity, GHG emissions including noise and light pollution\n\n3-3 Management of material topics. 305-5 Reduction of 86-88\n\n**Circular economy and waste prevention and management**\n\n| Measures for the prevention, recycling, reuse and<br>other recovery and disposal of waste. Actions to<br>combat food waste                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>306-2 Management of<br>significant waste-related<br>impacts<br>306-3 Waste generated<br>306-4 Waste diverted from<br>disposal<br>306-5 Waste directed to<br>disposal | 97-100, Appendix 6.2<br>Given the nature of the<br>Group's business, food waste<br>is not a material issue. |\n|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|\n| Water consumption and supply in accordance with<br>local limitations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 303-1 Interactions with water<br>as a shared resource<br>303-2 Management of water<br>discharge-related impacts<br>303-3 Water withdrawal<br>303-4 Water discharge<br>303-5 Water consumption                | 91-95, Appendix 6.2                                                                                         |\n| Consumption of raw materials and measures<br>implemented to improve the efficiency of their use                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 301-1 Materials used by<br>weight or volume                                                                                                                                                                  | 97-102, Appendix 6.2                                                                                        |\n| Direct and indirect energy consumption                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 3-3 Management of material<br>topics<br>302-1 Energy consumption<br>within the organization                                                                                                                  | 89-90, Appendix 6.2                                                                                         |\n| Measures taken to improve energy efficiency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 3-3 Management of material<br>topics<br>302-4 Reduction of energy<br>consumption                                                                                                                             | 89-90                                                                                                       |\n| Use of renewable energies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 302-1 Energy consumption<br>within the organization                                                                                                                                                          | 89-90                                                                                                       |\n| Climate change                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                              |                                                                                                             |\n| The key elements of the greenhouse gas emissions<br>generated as a result of the Company's activities,<br>including the use of the goods and services it<br>produces.                                                                                                                                                                                                                                                                                                                                                                                                           | 305-1 Direct (Scope 1) GHG<br>emissions<br>305-2 Energy indirect (Scope<br>2) GHG emissions<br>305-3 Other indirect (Scope<br>3) GHG emissions                                                               | 81, 86-88, 95                                                                                               |\n| Measures taken to adapt to the consequences of<br>climate change.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 3-3 Management of material<br>topics                                                                                                                                                                         | 81-96                                                                                                       |\n| Voluntary medium- and long-term greenhouse gas<br>reduction targets and the measures in place to<br>achieve them.                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 305-5 Reduction of GHG<br>emissions                                                                                                                                                                          | 86-88                                                                                                       |\n| Biodiversity protection                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                              |                                                                                                             |\n| Measures taken to preserve or restore biodiversity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 3-3 Management of material<br>topics                                                                                                                                                                         | 96                                                                                                          |\n| Impacts caused by activities or operations in<br>protected areas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 3-3 Management of material<br>topics                                                                                                                                                                         | 96                                                                                                          |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                              |                                                                                                             |\n| A description of the policies applied by the Group with regard to these topics, which shall include the due diligence procedures implemented to identify, assess, prevent and mitigate significant risks and impacts, and assurance and control procedures, including the measures taken.                                                                                                                                                                                                                                                                                       | 3-3 Management of material topics                                                                                                                                                                            | 106-115                                                                                                     |\n| The results of such policies, including the pertinent non-financial key performance indicators, enabling progress to be monitored and evaluated and allowing for comparisons to be drawn between companies and industries, in line with the benchmark national, European or international frameworks used for each topic.                                                                                                                                                                                                                                                       | 3-3 Management of material topics                                                                                                                                                                            | 106-115                                                                                                     |\n| The main risks in relation to such topics as regards the Group's activities, including, where pertinent and appropriate, its commercial relations, products or services that may have an adverse impact on such areas, and how the Group manages such risks, explaining the procedures used to detect and assess them in line with the benchmark national, European or international frameworks used for each topic. Information on any impacts detected must be included, providing a breakdown thereof, particularly as regards the main short-, medium- and long-term risks. | 3-3 Management of material topics                                                                                                                                                                            | 106-115                                                                                                     |\n| Employment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                              |                                                                                                             |\n| Total number and distribution of employees based on diversity criteria (gender, age, country, etc.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2-7 Employees<br>405-1 Diversity of governance bodies and employees                                                                                                                                          | 106-111, Appendix 6.2                                                                                       |\n| Total number and distribution of types of employment contract, average annual number of permanent, temporary and part-time contracts by gender, age and professional category                                                                                                                                                                                                                                                                                                                                                                                                   | 2-7 Employees                                                                                                                                                                                                | 106-111, Appendix 6.2                                                                                       |\n| Number of layoffs by gender, age and professional category                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 3-3 Management of material topics                                                                                                                                                                            | 106-111, Appendix 6.2                                                                                       |\n| Average remuneration and trends therein, broken down by gender, age and professional category or similar                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 405-2 Ratio of basic salary and remuneration of women to men<br>3-3 Management of material topics                                                                                                            | 106-111, Appendix 6.2                                                                                       |\n| Wage gap, remuneration of like positions or average<br>remuneration in the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 405-2 Ratio of basic salary<br>and remuneration of women<br>to men                                                                                                                                           | Appendix 6.2                                                                                                |\n| Average remuneration of board members and<br>management, including variable remuneration,<br>allowances, indemnities, payments into long-term<br>savings schemes and any other amounts received,<br>disaggregated by gender                                                                                                                                                                                                                                                                                                                                                     | 2-19 Remuneration policies                                                                                                                                                                                   | 32-37                                                                                                       |\n| Implementation of policies on disconnecting from<br>work                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 3-3 Management of material<br>topics                                                                                                                                                                         | 106-111                                                                                                     |\n| Employees with disabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 405-1 Diversity of governance<br>bodies and employees                                                                                                                                                        | 106-111                                                                                                     |\n| Organization of work                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                              |                                                                                                             |\n| Organization of working time                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 3-3 Management of material<br>topics                                                                                                                                                                         | 112-115, Appendix 6.2                                                                                       |\n| Absenteeism hours                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 403-9 Work-related injuries                                                                                                                                                                                  | 112-115, Appendix 6.2                                                                                       |\n| Measures aimed at facilitating a work-life balance<br>and encouraging the sharing of responsibilities<br>between both parents                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 401-3 Parental leave                                                                                                                                                                                         | 106-111                                                                                                     |\n| Health and safety                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                              |                                                                                                             |\n\n",
    "report_without_taxonomy": "{0}------------------------------------------------\n\n(The attached External Auditor's Report, Consolidated Annual Accounts and Consolidated Management Report for the fiscal year ended 31 December 2023, have been originally issued in Spanish. The English version is not considered official or regulated financial information. In the event of discrepancy, the Spanish-language version prevails.)\n\n{1}------------------------------------------------\n\nAuditor´s report Consolidated annual accounts at December 31, 2023 Consolidated management report\n\n{2}------------------------------------------------\n\nImage /page/2/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in black, with a stylized graphic element to the right. This element is composed of several overlapping squares and rectangles in shades of orange and yellow, creating a layered, abstract design.\n\n*This version of our report is a free translation of the original, which was prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.*\n\n## Independent auditor's report on the consolidated annual accounts\n\nTo the shareholders of Acerinox, S.A.\n\n### **Report on the consolidated annual accounts**\n\n#### **Opinion**\n\nWe have audited the consolidated annual accounts of Acerinox, S.A. (the Parent company) and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2023, and the profit or loss account, statement of comprehensive income, statement of changes in equity, cash flow statement and related notes, all consolidated, for the year then ended.\n\nIn our opinion, the accompanying consolidated annual accounts present fairly, in all material respects, the equity and financial position of the Group as at 31 December 2023, as well as its financial performance and cash flows, all consolidated, for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) and other provisions of the financial reporting framework applicable in Spain.\n\n#### **Basis for opinion**\n\nWe conducted our audit in accordance with legislation governing the audit practice in Spain. Our responsibilities under those standards are further described in the *Auditor's responsibilities for the audit of the consolidated annual accounts* section of our report.\n\nWe are independent of the Group in accordance with the ethical requirements, including those relating to independence, that are relevant to our audit of the consolidated annual accounts in Spain, in accordance with legislation governing the audit practice. In this regard, we have not rendered services other than those relating to the audit of the accounts, and situations or circumstances have not arisen that, in accordance with the provisions of the aforementioned legislation, have affected our necessary independence such that it has been compromised.\n\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.\n\n#### **Key audit matters**\n\nKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated annual accounts of the current period. These matters were addressed in the context of our audit of the consolidated annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.\n\n*PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400,* www.pwc.es 1\n\n{3}------------------------------------------------\n\nImage /page/3/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in black, with a stylized graphic to the upper right. The graphic is composed of several overlapping squares and rectangles in shades of red, orange, and yellow, creating a layered effect.\n\n#### **Key audit matters How our audit addressed the key audit matters**\n\n#### VDM Metals Group goodwill recovery\n\nAs indicated in notes 2.7, 2.11 and 7.1 of the attached consolidated report, as of December 31, 2023 there is goodwill that fundamentally includes that arising from the acquisition of 100% of the interest in the company VDM Metals Holding, Gmbh for an amount of 49,829 thousand euros.\n\nThe Group Management has estimated the recoverable value of said goodwill (note 2.11 of the attached consolidated report).\n\nTo calculate the recoverable value, the Group's Management has used cash flow projections based on financial budgets that have required relevant judgments and estimates that include, among others, the operating result on sales and long-term discount and growth rates. The most significant assumptions used by Group Management and the sensitivity analyzes carried out are summarized in note 7.1 of the attached consolidated report.\n\nDeviations in these variables and management estimates may determine important variations in the calculations made and, therefore, in the goodwill recovery analyses.\n\nThis fact, together with the relevance of this financial statement line item, drives it to be a key audit matter.\n\n#### Recovery of property, plant and equipment\n\nAs indicated in notes 2.11 and 8.1 of the attached consolidated report, the Group Management evaluates at the end of each year whether there are indications of impairment of the value of property, plant and equipment. If such indication exists, Group Management estimates its recoverable amount. Note 8.1 details the Cash-Generating Units (CGUs) that show signs of impairment.\n\nAs a starting point for our procedures, we have understood the relevant processes and controls linked to the evaluation of impairments in property, plant and equipment by the Group Management, including those linked to the preparation of budgets and the analysis and monitoring of projections, which constitute the basis for the main judgments and estimates made by the Group Management.\n\nOn the first place, we have proceeded to understand the relevant processes and controls linked to the evaluation of the deterioration in goodwill by the Group Management, including those related to the preparation of budgets and the analysis and monitoring of projections, which They constitute the basis for the main judgments and estimates made by the Group's Management.\n\nIn relation to the estimated cash flows, we have analyzed the methodology of the calculations made, we have compared the projected annual flows with those actually achieved in fiscal year 2023, and we have contrasted the key assumptions used by the Group's Management with historical, comparable results. available, relevant industry factors and other external sources. To do this, we have relied on valuation experts from our firm.\n\nAdditionally, we have evaluated the reasonableness of the sensitivity disclosed in the accompanying consolidated annual accounts.\n\nAs a result of the analyzes performed, we consider that the conclusions of the Group Management regarding the estimates made and the information disclosed in the accompanying consolidated annual accounts are adequately supported and consistent with the information currently available.\n\n{4}------------------------------------------------\n\nImage /page/4/Picture/0 description: The image contains the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several overlapping squares and rectangles in shades of red, orange, and yellow, creating a layered, abstract design.\n\nFor calculations of recoverable value through value in use, Group Management uses cash flow projections based on financial budgets that require relevant judgments and estimates. In the cases of Bahru Stainless Sdn. Bhd. and Acerinox Europa, SA, the Group's Management has relied on an independent expert.\n\nThe most significant assumptions and sensitivity analyzes performed are summarized in note 8.1 of the attached consolidated report.\n\nAs a result of the analysis carried out and as mentioned in said note 8.1, in fiscal year 2023 an impairment of 156,207 thousand euros has been recorded on the net assets of the CGU of Bahru Stainless Sdn. Bhd. The accumulated impairment at the end of fiscal year 2023 amounts to 489,435 thousand euros.\n\nDeviations in the variables and estimates indicated above may determine important variations in the conclusions reached and, therefore, in the recovery analysis of property, plant and equipment.\n\nThis fact, together with the relevance of this financial statement line item and the consequent impariment registered, motivates it to be a key audit matter.\n\n**Key audit matters How our audit addressed the key audit matters** In relation to the estimated cash flows, we have analyzed the methodology of the calculations performed, we have compared the projected annual flows with those actually achieved in fiscal year 2023 and we have contrasted the key assumptions considered, with historical results, available comparables, relevant factors of industry and other external sources. For this, we have relied on valuation experts from our firm. In addition, we have analyzed the future plans approved by the Board of Directors.\n\n> Likewise, we have evaluated the competence, capacity, objectivity and conclusions of the independent expert hired by the Group Management, as well as the adequacy of their work as audit evidence.\n\nAdditionally, we have evaluated the reasonableness of the sensitivity analyzes disclosed in the accompanying consolidated annual accounts.\n\nAs a result of the procedures performed, we consider that the conclusions of the Group Management regarding the estimates made and the consequent deterioration recorded, as well as the information revealed in the attached consolidated annual accounts, are adequately supported and consistent with the information currently available.\n\n#### Recognition of deferred tax assets\n\nAs of December 31, 2023, the attached consolidated annual accounts reflect an amount of 169,266 thousand euros of deferred tax assets, net of an amount of 53,823 thousand euros of deferred tax liabilities, the recovery of which depends on the generation of positive tax bases in Corporate Tax in future years (notes 2.19, 3.f and 19.3.3 of the attached consolidated report), in accordance with the applicable tax regulations. Likewise, note 19.3.2 of the attached consolidated report details the unrecognized tax credits.\n\nThe recognition of these deferred tax assets is analyzed by the Group Management by estimating the tax bases for the coming years, based on the business plans of the different Group companies and the planning possibilities allowed by tax legislation. applicable to each company and to the consolidated tax group headed by the Parent Company.\n\nFirst, we have proceeded to understand and evaluate the criteria used by the Group Management to estimate the possibilities of use and recovery of deferred tax assets in the following years, affected by the business plans. Based on the business plans prepared by the Group Management, we have compared the projected annual flows with those actually achieved in fiscal year 2023 and we have contrasted the key assumptions, estimates and calculations made for their preparation, comparing them with the historical performance, comparable available, relevant industry factors and other external sources.\n\nAs part of the analysis, we have also evaluated the tax adjustments considered for the estimation of tax bases, the applicable tax regulations, as well as decisions about the possibilities of using the tax benefits corresponding to the different companies of the Group.\n\n{5}------------------------------------------------\n\nImage /page/5/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in black, with a stylized graphic above and to the right. The graphic is composed of several overlapping squares in shades of red, orange, and yellow, creating a gradient effect.\n\n#### **Key audit matters How our audit addressed the key audit matters**\n\nConsequently, the conclusion on the recognition of deferred tax assets shown in the attached consolidated balance sheet is subject to significant judgments and estimates by the Group Management both with respect to future tax results and the applicable tax regulations. in the different jurisdictions where it operates.\n\nGiven the relevance of the amount recognized and pending recognition, the significant judgments required and estimates necessary for the calculation of future tax bases, the recognition of deferred tax assets is a key matter of our audit.\n\nThe analysis performed have made it possible to verify that the calculations and estimates made by the Group Management, as well as the conclusions reached, in relation to the recognition of deferred tax assets, are consistent with the current situation, with the expectations of future results of the Group and with its tax planning possibilities available in the current legislation.\n\n**Other information: Consolidated management report**\n\nOther information comprises only the consolidated management report for the 2023 financial year, the formulation of which is the responsibility of the Parent company's directors and does not form an integral part of the consolidated annual accounts.\n\nOur audit opinion on the consolidated annual accounts does not cover the consolidated management report. Our responsibility regarding the consolidated management report, in accordance with legislation governing the audit practice, is to:\n\n- a) Verify only that the consolidated statement of non-financial information, certain information included in the Annual Corporate Governance Report and the Annual Report on Directors' Remuneration, as referred to in the Auditing Act, have been provided in the manner required by applicable legislation and, if not, we are obliged to disclose that fact.\n- b) Evaluate and report on the consistency between the rest of the information included in the consolidated management report and the consolidated annual accounts as a result of our knowledge of the Group obtained during the audit of the aforementioned financial statements, as well as to evaluate and report on whether the content and presentation of this part of the consolidated management report is in accordance with applicable regulations. If, based on the work we have performed, we conclude that material misstatements exist, we are required to report that fact.\n\nOn the basis of the work performed, as described above, we have verified that the information mentioned in section a) above has been provided in the manner required by applicable legislation and that the rest of the information contained in the consolidated management report is consistent with that contained in the consolidated annual accounts for the 2023 financial year, and its content and presentation are in accordance with applicable regulations.\n\n**Responsibility of the directors and the audit commission for the consolidated annual accounts**\n\nThe Parent company's directors are responsible for the preparation of the accompanying consolidated annual accounts, such that they fairly present the consolidated equity, financial position and financial performance of the Group, in accordance with IFRS-EU and other provisions of the financial reporting framework applicable to the Group in Spain, and for such internal control as the aforementioned directors determine is necessary to enable the preparation of consolidated annual accounts that are free from material misstatement, whether due to fraud or error.\n\n{6}------------------------------------------------\n\nImage /page/6/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in black, sans-serif font. Above and to the right of the letters is a graphic element composed of several overlapping squares and rectangles in shades of red, orange, and yellow. The squares and rectangles are arranged in a way that creates a sense of depth and movement.\n\nIn preparing the consolidated annual accounts, the Parent company's directors are 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 aforementioned directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.\n\nThe Parent company's audit commission is responsible for overseeing the process of preparation and presentation of the consolidated annual accounts.\n\n#### **Auditor's responsibilities for the audit of the consolidated annual accounts**\n\nOur objectives are to obtain reasonable assurance about whether the consolidated annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.\n\nReasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with legislation governing the audit practice in Spain 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 annual accounts.\n\nAs part of an audit in accordance with legislation governing the audit practice in Spain, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:\n\n- Identify and assess the risks of material misstatement of the consolidated annual accounts, 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.\n- 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.\n- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Parent company's directors.\n- Conclude on the appropriateness of the Parent company's 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 auditor's report to the related disclosures in the consolidated annual accounts 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 auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.\n- Evaluate the overall presentation, structure and content of the consolidated annual accounts, including the disclosures, and whether the consolidated annual accounts represent the underlying transactions and events in a manner that achieves fair presentation.\n- Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated annual accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.\n\n{7}------------------------------------------------\n\nImage /page/7/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several overlapping squares and rectangles in shades of red, orange, and yellow, creating an abstract design.\n\nAcerinox, S.A. and its subsidiaries\n\nWe communicate with the Parent company's audit commission 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.\n\nWe also provide the Parent company's audit commission with a statement that we have complied with relevant ethical requirements, including those relating to independence, and we communicate with the aforementioned those matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.\n\nFrom the matters communicated with the Parent company's audit commission, we determine those matters that were of most significance in the audit of the consolidated annual accounts of the current period and are therefore the key audit matters.\n\nWe describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.\n\n## **Report on other legal and regulatory requirements**\n\n#### **European single electronic format**\n\nWe have examined the digital files of the European single electronic format (ESEF) of Acerinox, S.A. and its subsidiaries for the 2023 financial year that comprise an XHTML file which includes the consolidated annual accounts for the financial year and XBRL files with tagging performed by the entity, which will form part of the annual financial report.\n\nThe directors of Acerinox, S.A. are responsible for presenting the annual financial report for the 2023 financial year in accordance with the formatting and markup requirements established in the Delegated Regulation (EU) 2019/815 of 17 December 2018 of the European Commission (hereinafter the ESEF Regulation). In this regard, the Annual Corporate Governance Report and the Annual Report on Directors' Remuneration have been incorporated by reference in the consolidated management report.\n\nOur responsibility is to examine the digital files prepared by the Parent company's directors, in accordance with legislation governing the audit practice in Spain. This legislation requires that we plan and execute our audit procedures in order to verify whether the content of the consolidated annual accounts included in the aforementioned digital files completely agrees with that of the consolidated annual accounts that we have audited, and whether the format and markup of these accounts and of the aforementioned files has been effected, in all material respects, in accordance with the requirements established in the ESEF Regulation.\n\nIn our opinion, the digital files examined completely agree with the audited consolidated annual accounts, and these are presented and have been marked up, in all material respects, in accordance with the requirements established in the ESEF Regulation.\n\n#### **Report to the audit commission of the Parent company**\n\nThe opinion expressed in this report is consistent with the content of our additional report to the audit commission of the Parent company dated 28 February 2024.\n\n{8}------------------------------------------------\n\nImage /page/8/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in a bold, sans-serif font, stacked horizontally. To the right of the letters is a graphic element composed of several overlapping squares in shades of orange and red. The squares are arranged in a way that creates a sense of depth and dimension.\n\n#### **Appointment period**\n\nThe General Ordinary Shareholders' Meeting held on 23 May 2023 appointed us as auditors of the Group for a period of one year, for the year ended 31 December 2023.\n\nPreviously, we were appointed by resolution of the General Ordinary Shareholders' Meeting for a period of tres years and we have audited the accounts continuously since the year ended 31 December 2017.\n\n**Services provided**\n\nServices provided to the Group for services other than the audit of the accounts are disclosed in note 21 to the consolidated annual accounts.\n\nPricewaterhouseCoopers Auditores, S.L. (S0242)\n\nOriginal in Spanish signed by\n\nJon Toledano Irigoyen (20518)\n\n29 February 2024\n\n{9}------------------------------------------------\n\n## **ACERINOX, S.A. AND SUBSIDIARIES**\n\nImage /page/9/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned in the center of a circular shape, which is open at the top, resembling a crescent moon. The circular shape is also in the same dark blue color as the text.\n\n## **Annual Accounts of the Consolidated Group**\n\n## **for the year ended 31 December 2023**\n\n *Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Note 2). In the event of a discrepancy, the Spanish-language version prevails.*\n\n{10}------------------------------------------------\n\n### **TABLE OF CONTENTS**\n\n#### **CONSOLIDATED FINANCIAL STATEMENTS**\n\n| CONSOLIDATED STATEMENT OF FINANCIAL POSITION   | 2 |\n|------------------------------------------------|---|\n| CONSOLIDATED STATEMENT OF PROFIT OR LOSS       | 4 |\n| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | 5 |\n| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY    | 6 |\n| CONSOLIDATED STATEMENTS OF CASH FLOWS          | 7 |\n\n#### **NOTES**\n\n| NOTE 1 – GENERAL INFORMATION                      | 8   |  |\n|---------------------------------------------------|-----|--|\n| NOTE 2 – ACCOUNTING POLICIES                      | 9   |  |\n| NOTE 3 – ACCOUNTING ESTIMATES AND JUDGEMENTS      | 29  |  |\n| NOTE 4 – FINANCIAL RISK MANAGEMENT                | 31  |  |\n| NOTE 5 – SCOPE OF CONSOLIDATION                   | 45  |  |\n| NOTE 6 – SEGMENT REPORTING                        | 50  |  |\n| NOTE 7 – INTANGIBLE ASSETS                        | 53  |  |\n| NOTE 8 – PROPERTY, PLANT AND EQUIPMENT            | 57  |  |\n| NOTE 9 – INVESTMENT PROPERTY                      | 68  |  |\n| NOTE 10 – RIGHT-OF-USE ASSETS (LEASES)            | 70  |  |\n| NOTE 11 – INVENTORIES                             | 71  |  |\n| NOTE 12 – FINANCIAL INSTRUMENTS                   | 73  |  |\n| NOTE 13 – CASH AND CASH EQUIVALENTS               | 85  |  |\n| NOTE 14 – EQUITY                                  | 85  |  |\n| NOTE 15 – DEFERRED INCOME                         | 93  |  |\n| NOTE 16 – PROVISIONS AND CONTINGENCIES            | 94  |  |\n| NOTE 17 – INCOME AND EXPENSES                     | 99  |  |\n| NOTE 18 – NET FINANCE COSTS101                    |     |  |\n| NOTE 19 – TAX MATTERS                             | 102 |  |\n| NOTE 20 – RELATED PARTY BALANCES AND TRANSACTIONS | 111 |  |\n| NOTE 21 – AUDIT FEES                              | 112 |  |\n| NOTE 22 – EVENTS AFTER THE REPORTING PERIOD       | 113 |  |\n\n{11}------------------------------------------------\n\nImage /page/11/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right. The word \"ACERINOX\" is also in blue, matching the color of the circle.\n\n## <span id=\"page-11-0\"></span>**CONSOLIDATED ANNUAL ACCOUNTS**\n\n## **CONSOLIDATED FINANCIAL STATEMENTS**\n\n## **1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                                   | Note | 2023      | 2022      |\n|-------------------------------------------------------------------|------|-----------|-----------|\n| ASSETS                                                            |      |           |           |\n| Non-current assets                                                |      |           |           |\n| Goodwill                                                          | 7    | 51,064    | 51,064    |\n| Other intangible assets                                           | 7    | 41,339    | 43,437    |\n| Property, plant and equipment                                     | 8    | 1,471,899 | 1,649,607 |\n| Investment property                                               | 9    | 9,668     | 9,916     |\n| Rights of use assets                                              | 10   | 18,851    | 16,207    |\n| Investments accounted for using the equity method                 | 5.3  | 390       | 390       |\n| Financial assets at fair value through other comprehensive income | 12   | 381       | 394       |\n| Deferred tax assets                                               | 19   | 169,266   | 101,225   |\n| Other non-current financial assets                                | 12   | 14,231    | 30,188    |\n| TOTAL NON-CURRENT ASSETS                                          |      | 1,777,089 | 1,902,428 |\n| Current assets                                                    |      |           |           |\n| Inventories                                                       | 11   | 1,860,535 | 2,155,542 |\n| Trade and other receivables                                       | 12   | 626,273   | 637,833   |\n| Other current financial assets                                    | 12   | 27,683    | 51,534    |\n| Current income tax assets                                         | 19   | 13,506    | 22,770    |\n| Cash and cash equivalents                                         | 13   | 1,793,683 | 1,548,040 |\n| TOTAL CURRENT ASSETS                                              |      | 4,321,680 | 4,415,719 |\n| TOTAL ASSETS                                                      |      | 6,098,769 | 6,318,147 |\n\n{12}------------------------------------------------\n\n#### **Acerinox Group Annual Accounts**\n\nImage /page/12/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a semi-circle. The text and the semi-circle are both in a dark blue color. The semi-circle partially encloses the text, creating a circular shape.\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n| Note                                                             | 2023 | 2022      |           |\n|------------------------------------------------------------------|------|-----------|-----------|\n| <b>LIABILITIES</b>                                               |      |           |           |\n| <b>Equity</b>                                                    |      |           |           |\n| Subscribed capital                                               | 14   | 62,334    | 64,931    |\n| Issue premium                                                    | 14   | 268       | 268       |\n| Reserves                                                         | 14   | 2,199,849 | 1,920,753 |\n| Profit/(loss) for the year                                       | 14   | 228,128   | 556,054   |\n| Interim dividend                                                 | 14   | -77,261   | -74,799   |\n| Translation differences                                          | 14   | -7,990    | 93,923    |\n| Other equity instruments                                         | 14   | 4,157     | 3,695     |\n| Shares of the parent                                             | 14   | -1,055    | -90,728   |\n| <b>EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY</b> |      | 2,408,430 | 2,474,097 |\n| Non-controlling interests                                        | 14   | 54,696    | 73,596    |\n| <b>TOTAL EQUITY</b>                                              | 14   | 2,463,126 | 2,547,693 |\n| <b>Non-current liabilities</b>                                   |      |           |           |\n| Deferred income                                                  | 15   | 36,347    | 27,465    |\n| Issuance of debentures and other marketable securities           | 12   | -         | 74,850    |\n| Bank borrowings                                                  | 12   | 1,291,156 | 1,319,182 |\n| Long-term provisions                                             | 16   | 179,994   | 159,058   |\n| Deferred tax liabilities                                         | 19   | 205,901   | 227,784   |\n| Other non-current financial liabilities                          | 12   | 19,799    | 14,971    |\n| <b>TOTAL NON-CURRENT LIABILITIES</b>                             |      | 1,733,197 | 1,823,310 |\n| <b>Current liabilities</b>                                       |      |           |           |\n| Issuance of debentures and other marketable securities           | 12   | 76,584    | 1,634     |\n| Bank borrowings                                                  | 12   | 767,147   | 592,858   |\n| Trade and other payables                                         | 12   | 951,118   | 1,181,440 |\n| Current income tax liabilities                                   | 19   | 12,601    | 58,295    |\n| Other current financial liabilities                              | 12   | 94,996    | 112,917   |\n| <b>TOTAL CURRENT LIABILITIES</b>                                 | 12   | 1,902,446 | 1,947,144 |\n| <b>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</b>                | 12   | 6,098,769 | 6,318,147 |\n\n{13}------------------------------------------------\n\nImage /page/13/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue, circular shape. The blue circle is not fully closed, leaving a gap at the bottom right. The word \"ACERINOX\" is in black.\n\n## <span id=\"page-13-0\"></span>**2. CONSOLIDATED STATEMENT OF PROFIT OR LOSS**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                               | Note     | 2023       | 2022       |\n|---------------------------------------------------------------|----------|------------|------------|\n| Revenue                                                       | 17       | 6,607,978  | 8,688,494  |\n| Other operating income                                        | 17       | 92,198     | 41,025     |\n| Work performed by the Group on non-current assets             | 17       | 7,825      | 27,375     |\n| Changes in inventories of finished goods and work in progress |          | -152,080   | 211,472    |\n| Supplies                                                      |          | -4,282,109 | -5,844,532 |\n| Staff costs                                                   | 17       | -636,546   | -653,762   |\n| Depreciation and amortisation charge                          | 7,8,9,10 | -171,130   | -192,931   |\n| Other operating expenses                                      | 17       | -935,776   | -1,197,459 |\n| Impairment of assets                                          | 7.8      | -156,207   | -203,905   |\n| OPERATING INCOME                                              |          | 374,153    | 875,769    |\n| Finance income                                                | 18       | 79,646     | 26,073     |\n| Finance costs                                                 | 18       | -101,044   | -62,799    |\n| Exchange differences                                          | 18       | 2,273      | -4,624     |\n| Revaluation of financial instruments at fair value            | 18       | 317        | -3,14      |\n| Impairment and loss on disposal of financial instruments      | 18       |            |            |\n| PROFIT FROM ORDINARY ACTIVITIES                               |          | 355,345    | 831,275    |\n| Income tax                                                    | 19       | -138,105   | -260,412   |\n| Other taxes                                                   | 19       | -273       | -473       |\n| PROFIT/(LOSS) FOR THE YEAR                                    |          | 216,967    | 570,386    |\n| Attributable to:                                              |          |            |            |\n| NON-CONTROLLING INTERESTS                                     |          | -11,161    | 14,332     |\n| NET PROFIT (LOSS) ATTRIBUTABLE TO THE GROUP                   |          | 228,128    | 556,05-    |\n| Basic and diluted earnings per share (in euros)               | 14.9     | 0.92       | 2.16       |\n\n{14}------------------------------------------------\n\nImage /page/14/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue, circular shape that is open on the left side. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle appears to be a thick line forming a partial ring around the word.\n\n### **3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                                                                  | Note   | 2023     | 2022    |\n|--------------------------------------------------------------------------------------------------|--------|----------|---------|\n| A) RESULTS OF THE STATEMENT OF PROFIT OR LOSS                                                    |        | 216,967  | 570,386 |\n| B) OTHER COMPREHENSIVE INCOME - ITEMS NOT RECLASSIFIED TO PROFIT OR LOSS FOR THE PERIOD          |        | -5,980   | 30,008  |\n| 1. Arising from valuation of equity instruments at fair value through other comprehensive income | 12.2.5 | -        | 502     |\n| 2. Arising from actuarial gains and losses and other adjustments                                 | 16.1   | -8,906   | 43,999  |\n| 3. Tax effect                                                                                    | 19     | 2,926    | -14,493 |\n| C) OTHER COMPREHENSIVE INCOME - ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS FOR THE PERIOD  |        | -140,570 | 142,522 |\n| 1. Arising from cash flow hedges                                                                 |        |          |         |\n| - Valuation gains / (losses)                                                                     | 12.2.6 | -11,650  | 55,500  |\n| - Amounts transferred to the statement of profit or loss                                         | 12.2.6 | -32,402  | -1,776  |\n| 2. Translation differences                                                                       |        |          |         |\n| - Valuation gains / (losses)                                                                     |        | -109,680 | 103,481 |\n| - Amounts transferred to the statement of profit or loss                                         |        |          |         |\n| 3. Tax effect                                                                                    | 19     | 13,162   | -14,683 |\n| TOTAL COMPREHENSIVE INCOME FOR THE YEAR                                                          |        | 70,417   | 742,916 |\n| a) Attributed to the parent company                                                              |        | 89,345   | 729,173 |\n| b) Attributed to non-controlling interests                                                       |        | -18,928  | 13,743  |\n\n{15}------------------------------------------------\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n<span id=\"page-15-0\"></span>\n\n|                                                                                     |        | Equity attributable to shareholders of the parent company |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             |                    |                     |           |                              |                 |\n|-------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|------------------|------------------------------------------------------------------------|---------------------------------------------------------|--------------------------------|-----------------------------------------------------|-----------------------------------------|----------------------------|-----------------------------|--------------------|---------------------|-----------|------------------------------|-----------------|\n|                                                                                     |        | Subscribed<br>capital                                     | Issue<br>premium | Retained earnings<br>reserves (includes<br>profit/(loss) for the year) | Reserves for<br>revaluation of<br>non-current<br>assets | Cash flow<br>hedge<br>reserves | Fair value<br>adjustments<br>to financial<br>assets | Reserve for<br>actuarial<br>adjustments | Translation<br>differences | Other equity<br>instruments | Treasury<br>shares | Interim<br>dividend | TOTAL     | Non-controlling<br>interests | TOTAL<br>EQUITY |\n| Equity 31/12/2021                                                                   |        | 67,637                                                    | 268              | 2,094,072                                                              | 5,242                                                   | -272                           | -370                                                | 5,820                                   | -10,154                    | 3,048                       | -10,251            | 0                   | 2,155,040 | 59,822                       | 2,214,862       |\n| Profit/(loss) for the year 2022                                                     | Note   |                                                           |                  | 556,054                                                                |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | 556,054   | 14,332                       | 570,386         |\n| Financial assets at fair value through other comprehensive income (net of tax)      | 12.2.5 |                                                           |                  |                                                                        |                                                         |                                | 370                                                 |                                         |                            |                             |                    |                     | 370       |                              | 370             |\n| Cash flow hedges (net of tax)                                                       | 12.2.6 |                                                           |                  |                                                                        |                                                         | 39,041                         |                                                     |                                         |                            |                             |                    |                     | 39,041    |                              | 39,041          |\n| Actuarial valuation of employee benefit obligations (net of tax)                    | 16.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     | 29,631                                  |                            |                             |                    |                     | 29,631    | 7                            | 29,638          |\n| Translation differences                                                             | 14.4   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         | 104,077                    |                             |                    |                     | 104,077   | -596                         | 103,481         |\n| Income and expenses recognised in equity                                            |        |                                                           |                  |                                                                        |                                                         | 39,041                         | 370                                                 | 29,631                                  | 104,077                    |                             |                    |                     | 173,119   | -589                         | 172,530         |\n| Total comprehensive income                                                          |        |                                                           |                  | 556,054                                                                | 0                                                       | 39,041                         | 370                                                 | 29,631                                  | 104,077                    | 0                           | 0                  | 0                   | 729,173   | 13,743                       | 742,916         |\n| Interim dividend                                                                    | 14.2   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             |                    | -74,799             | -74,799   |                              | -74,799         |\n| Dividends paid                                                                      | 14.2   |                                                           |                  | -129,850                                                               |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | -129,850  |                              | -129,850        |\n| Transactions with shareholders                                                      |        | 0                                                         | 0                | -129,850                                                               | 0                                                       | 0                              | 0                                                   | 0                                       | 0                          | 0                           | 0                  | -74,799             | -204,649  | 0                            | -204,649        |\n| Acquisition of treasury shares                                                      | 14.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             | -206,005           |                     | -206,005  |                              | -206,005        |\n| Amortisation of treasury shares                                                     | 14.1   | -2,706                                                    |                  | -121,588                                                               |                                                         |                                |                                                     |                                         |                            |                             | 124,294            |                     | 0         |                              | 0               |\n| Long-term incentive plan for senior executives                                      | 16.1.3 |                                                           |                  | -810                                                                   |                                                         |                                |                                                     |                                         |                            | 647                         | 1,234              |                     | 1,071     | 31                           | 1,102           |\n| Hyperinflation adjustments                                                          | 14.6   |                                                           |                  | 973                                                                    |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | 973       |                              | 973             |\n| Result of sale of financial assets at fair value through other comprehensive income | 12.2.5 |                                                           |                  | -803                                                                   |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | -803      |                              | -803            |\n| Other changes                                                                       | 14.4   |                                                           |                  | -703                                                                   |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | -703      |                              | -703            |\n| Equity 31/12/2022                                                                   |        | 64,931                                                    | 268              | 2,397,345                                                              | 5,242                                                   | 38,769                         | 0                                                   | 35,451                                  | 93,923                     | 3,695                       | -90,728            | -74,799             | 2,474,097 | 73,596                       | 2,547,693       |\n| Profit/(loss) for the year 2023                                                     |        | 0                                                         | 0                | 228,128                                                                | 0                                                       | 0                              | 0                                                   | 0                                       | 0                          | 0                           | 0                  | 0                   | 228,128   | -11,161                      | 216,967         |\n| Cash flow hedges (net of tax)                                                       | 12.2.6 |                                                           |                  |                                                                        |                                                         | -30,890                        |                                                     |                                         |                            |                             |                    |                     | -30,890   |                              | -30,890         |\n| Actuarial valuation of employee benefit obligations (net of tax)                    | 16.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     | -5,980                                  |                            |                             |                    |                     | -5,980    |                              | -5,980          |\n| Translation differences                                                             | 14.4   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         | -101,913                   |                             |                    |                     | -101,913  | -7,767                       | -109,680        |\n| Income and expenses recognised in equity                                            |        |                                                           |                  |                                                                        |                                                         | -30,890                        |                                                     | -5,980                                  | -101,913                   |                             |                    |                     | -138,783  | -7,767                       | -146,550        |\n| Total comprehensive income                                                          |        | 0                                                         | 0                | 228,128                                                                | 0                                                       | -30,890                        | 0                                                   | -5,980                                  | -101,913                   | 0                           | 0                  | 0                   | 89,345    | -18,928                      | 70,417          |\n| Interim dividend                                                                    |        |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             |                    | -77,261             | -77,261   |                              | -77,261         |\n| Dividends paid                                                                      | 14.2   |                                                           |                  | -149,562                                                               |                                                         |                                |                                                     |                                         |                            |                             |                    | 74,799              | -74,763   |                              | -74,763         |\n| Transactions with shareholders                                                      |        | 0                                                         | 0                | -149,562                                                               | 0                                                       | 0                              | 0                                                   | 0                                       | 0                          | 0                           | 0                  | -2,462              | -152,024  | 0                            | -152,024        |\n| Acquisition of treasury shares                                                      | 14.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             | -2,084             |                     | -2,084    |                              | -2,084          |\n| Amortisation of treasury shares                                                     | 14.1   | -2,597                                                    |                  | -88,088                                                                |                                                         |                                |                                                     |                                         |                            |                             | 90,685             |                     | 0         |                              | 0               |\n| Long-term incentive plan for senior executives                                      | 16.1.3 |                                                           |                  | -769                                                                   |                                                         |                                |                                                     |                                         |                            | 462                         | 1,072              |                     | 765       | 28                           | 793             |\n| Hyperinflation adjustments                                                          | 14.6   |                                                           |                  | 1,028                                                                  |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | 1,028     |                              | 1,028           |\n| Other changes                                                                       | 14.4   |                                                           |                  | -2,693                                                                 |                                                         | 2                              |                                                     | -6                                      |                            |                             |                    |                     | -2,697    |                              | -2,697          |\n| Equity 31/12/2023                                                                   |        | 62,334                                                    | 268              | 2,385,389                                                              | 5,242                                                   | 7,881                          | 0                                                   | 29,465                                  | -7,990                     | 4,157                       | -1,055             | -77,261             | 2,408,430 | 54,696                       | 2,463,126       |\n\n{16}------------------------------------------------\n\nImage /page/16/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue crescent shape. The crescent shape partially encircles the word, creating a circular effect.\n\n### <span id=\"page-16-0\"></span>**5. CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                         | Note     | 2023      | 2022      |\n|---------------------------------------------------------|----------|-----------|-----------|\n| CASH FLOWS FROM OPERATING ACTIVITIES                    |          |           |           |\n| Profit (loss) before tax                                |          | 355,345   | 831,275   |\n| Adjustments to the result:                              |          |           |           |\n| Depreciation of fixed assets                            | 7,8,9,10 | 171,130   | 192,935   |\n| Impairment losses                                       | 8.11     | 122,812   | 290,561   |\n| Changes in provisions                                   |          | 7,033     | 19,130    |\n| Allocation of subsidies                                 | 15       | -9,186    | -7,522    |\n| Gain or loss on disposal of fixed assets                | 8.9      | 1,895     | 156       |\n| Gain (loss) on disposal of financial instruments        |          | -         | 3         |\n| Changes in fair value of financial instruments          |          | -4,313    | 3,238     |\n| Finance income                                          | 18       | -79,646   | -26,074   |\n| Finance costs                                           | 18       | 97,786    | 62,799    |\n| Other income and expenses                               |          | -25,154   | -14,715   |\n| Variations in working capital:                          |          |           |           |\n| (Increase)/decrease in trade and other receivables      |          | 20,818    | 194,322   |\n| (Increase) / decrease in inventories                    |          | 294,780   | -432,423  |\n| Increase / (decrease) in trade and other payables       |          | -235,071  | -306,199  |\n| Other cash flows from operating activities              |          |           |           |\n| Interest payments                                       |          | -82,468   | -50,050   |\n| Interest income                                         |          | 78,966    | 24,890    |\n| Income tax paid                                         |          | -233,251  | -238,237  |\n| NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES          |          | 481,476   | 544,083   |\n| CASH FLOWS FROM INVESTING ACTIVITIES                    |          |           |           |\n| Acquisition of property, plant and equipment            |          | -171,921  | -134,044  |\n| Acquisition of intangible fixed assets                  |          | -2,982    | -2,673    |\n| Acquisition of other financial assets                   |          | -848      | -1,811    |\n| Proceeds from disposal of property, plant and equipment |          | 1,045     | 2,004     |\n| Proceeds from disposal of other financial assets        |          | 5         | 10,158    |\n| Dividends received                                      |          | 5         | 866       |\n| NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES         |          | -174,696  | -125,500  |\n| Acquisition of treasury shares                          | 14       | -2,084    | -206,004  |\n| Collection of third-party resources                     | 12.2.3   | 392,687   | 1,028,740 |\n| Repayment of interest-bearing liabilities               | 12.2.3   | -246,607  | -908,921  |\n| Dividends paid                                          | 14       | -149,562  | -129,850  |\n| NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES         |          | -5,566    | -216,035  |\n| NET INCREASE IN CASH AND CASH EQUIVALENTS               |          | 301,214   | 202,548   |\n| Cash and cash equivalents at beginning of year          | 13       | 1,548,040 | 1,274,929 |\n| Effect of changes in exchange rates                     |          | -55,571   | 70,563    |\n| CASH AND CASH EQUIVALENTS AT YEAR-END                   | 13       | 1,703,683 | 1,548,040 |\n\n{17}------------------------------------------------\n\nImage /page/17/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside of a circular shape, also in dark blue, that surrounds the text.\n\n### <span id=\"page-17-0\"></span>**NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS**\n\n#### **NOTE 1 – GENERAL INFORMATION**\n\nName of the Parent: Acerinox, S.A. (hereinafter, \"the Company\").\n\nIncorporation: the Company was incorporated as a public limited liability company for an indefinite period of time on 30 September 1970.\n\nRegistered office: calle Santiago de Compostela, nº 100, Madrid - Spain.\n\nCompany object and main business activities: the Group's main business activities, which coincide with the Company object, consist of the manufacture, processing and marketing of stainless-steel products and special alloys. These activities are performed through its subsidiaries.\n\nThe Acerinox Group has the most extensive global presence in the production and distribution of stainless steel and highperformance alloys and is one of the most competitive companies in its sector. Acerinox is the leader in its sector in the United States and on the African continent, is widely recognised in Europe, and holds the top position globally for sales in high-performance alloys.\n\nThe Group has six stainless-steel plants on four continents, located in Campo de Gibraltar (Spain), Ponferrada and Igualada (Spain), Ghent (Kentucky, USA), Middleburg (Mpumalanga, South Africa) and Johor Middleburg (Mpumalanga, South Africa) and Johor Bahru (Malaysia). In addition, it has five high-performance alloy plants in Germany (Unna, Duisburg, Siegen, Werdohl and Altena) and two more in the USA (New Jersey and Nevada). The Group also has an extensive distribution network that enables it to sell in more than 80 countries. The Group boasts a steel production capacity of 3.5 million tonnes.\n\n**Note 5** details all the companies included in the scope of consolidation of Acerinox and the business activities they each perform.\n\nThe parent's main business activity is that of a holding company, in its condition as the parent of the Acerinox Group. Acerinox, S.A. approves and supervises the strategic business areas. It also provides various corporate services (including legal, accounting and consulting) and is responsible for the management and administration of financing within the Group.\n\nFiscal year: the fiscal year of Acerinox, S.A. and of all its Group companies covers 12 months. It begins on 1 January and ends on 31 December.\n\nAuthorisation for issue of the financial statements: these consolidated annual accounts were authorised for issue by the Board of Directors of Acerinox, S.A., on 28 February 2024.\n\n{18}------------------------------------------------\n\nImage /page/18/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is positioned inside a blue circle that is open on the left side.\n\n#### <span id=\"page-18-0\"></span>**NOTE 2 – ACCOUNTING POLICIES**\n\n#### **2.1 Statement of compliance**\n\nThese consolidated annual accounts of the Group were prepared in accordance with the International Financial Reporting Standards (IFRSs) and related interpretations (IFRICs) adopted by the European Union (EU-IFRSs hereinafter) and with the other provisions of the applicable regulatory financial reporting framework.\n\nThe 2023 annual accounts were prepared using the same accounting principles (EU-IFRS) as for 2022. The standards and amendments adopted by the European Union and required to be applied from 2023 had no impact on the Group, as described below:\n\n- IAS 1 (Amendment) Disclosure of accounting policies: the amendment introduces changes to the accounting policy disclosures to provide more useful information to investors and other key users of the financial statements. The Group has analysed the disclosures in the notes to its accounting policies to determine whether they contain appropriate disclosures in accordance with the amendments to IAS 1 and has not considered it necessary to make any changes.\n- IAS 8 (Amendment) Definition of accounting estimates: This amendment clarifies the differences between a change in accounting estimate and a change in accounting policy. This amendment had no impact on the reporting period as there were no changes in estimates or policies.\n- IAS 12 (Amendment) Deferred tax related to assets and liabilities arising from a single transaction: This amendment clarifies that the exemption from recognising deferred tax relating to assets or liabilities that are recognised for the first time (\"initial recognition exemption\") does not apply to transactions for which both an asset and a liability are recognised on initial recognition, such as leases and decommissioning obligations, and that there is therefore an obligation to recognise deferred tax on such transactions. No impact on the Group as there were no new transactions in 2023.\n- IAS 12 (Amendment) International tax reform: \"Pillar 2\" model standard: In October 2021, more than 130 countries agreed to implement a minimum tax regime for multinational companies, known as \"Pillar 2\". In December 2021, the Organisation for Economic Co-operation and Development (\"OECD\") published the \"Pillar 2\" model standard for reforming international corporate taxation. The standard requires affected large multinational companies to calculate their effective GloBE (\"Global Anti-Base Erosion\") tax rate for each jurisdiction in which they operate. Such companies will be required to pay an additional tax on the difference between their effective GloBE tax rate per jurisdiction and the minimum rate of 15%. This standard has yet to be implemented in Spain.\n\nAs a result of these new tax regulations, the IASB issued limited amendments to IAS 12 in May 2023, which provide a temporary exemption from the requirement to recognise and disclose deferred taxes arising from an enacted or substantially enacted tax law related to the Pillar 2 model standards issued by the OECD. However, the following specific disclosure requirements are introduced for the affected companies:\n\n- The fact that the temporary exemption for the recognition and disclosure of deferred tax assets and liabilities related to Pillar 2 income tax has been applied;\n- Their current tax expense (if any) related to Pillar 2 income tax; and\n- During the period between the enactment or substantial enactment date of the legislation and the effective date of the legislation, entities are required to disclose known or reasonably estimable information that would assist users of the financial statements in understanding the entity's exposure to Pillar 2 income taxes.\n\nThis amendment to IAS 12 is effective immediately (subject to any local approval process) for annual periods beginning on or after 1 January 2023 and retrospectively in accordance with IAS 8 \"Accounting Policies, Changes in Accounting Estimates and Errors\", including the requirement to disclose the fact that the temporary exemption has been applied, if relevant.\n\nThe Group has adopted the temporary exemption for the recognition and disclosure of deferred tax assets and liabilities and includes the disclosures required by this amendment both in its policies and in the tax note (see **Note 19**).\n\n{19}------------------------------------------------\n\nImage /page/19/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue crescent shape. The crescent shape partially encircles the word \"ACERINOX\".\n\n#### **2.2 Assessment of the main standards, amendments and interpretations that will be mandatorily applicable the coming years**\n\nThere are new standards and interpretations which will be mandatorily applicable in the coming years and have not been applied early by the Group.\n\nThe standards, interpretations and amendments approved by the European Union and applicable as of 1 January 2024 which have not been adopted in advance by the Group and which could have an impact, are as follows:\n\n- IFRS 16 (Amendment) \"Lease liability on sale and leaseback\": this amendment explains how a company should account for a sale and leaseback after the date of the transaction. The effective date of application of this amendment is 1 January 2024, although its early adoption is allowed. The Group does not expect the application of these amendments to have any impact on its financial statements.\n- IAS 1 (Amendment) \"Classification of Liabilities as Current or Non-current\": this amendment clarifies that liabilities are classified as current or non-current on the basis of the rights that exist at the end of the reporting period and not on the basis of the entity's expectations or events after the reporting period. It also clarifies the concept of \"settlement\" a liability under the standard. Additionally, the amendment aims to improve the information provided when the right to defer payment of a liability is subject to compliance with conditions (\"covenants\") within twelve months of the reporting period. While the initial effective date of these amendments was 1 January 2022, this has been postponed to January 2024, although early adoption is permitted. The Group does not expect any impact from the application of this standard as the classification within the Group between current and noncurrent is based on existing contractual rights.\n\nThe standards, interpretations and amendments that have not been adopted by the European Union and which have not been adopted in advance by the Group, but which could have an impact, are detailed below:\n\n- Amendments to IFRS 10 and IAS 28: these amendments clarify the accounting treatment of sales and contributions of assets between an investor and its associates and joint ventures. The amendments only apply when an investor sells or contributes assets to its associate or joint venture. The Group does not expect the application of this standard to have any impact as the investments in associates are insignificant and no such contributions have been made to date.\n- IAS 7 (Amendment) and IFRS 7 (Amendment) \"Supplier finance arrangements (reverse factoring)\": these amendments aim to improve disclosures on supplier financing arrangements (reverse factoring) and their effects on a company's liabilities, cash flows and exposure to liquidity risk. This amendment is effective for financial years beginning on or after 1 January 2024. Early implementation of the amendment is allowed, but is pending approval by the European Union. The Group shall include the required and applicable disclosures in its annual accounts when required to do so.\n- IAS 21 (Amendment) \"Lack of exchangeability\": requirements are added to assist entities in determining whether a currency is exchangeable for another currency and the spot rate to use when it is not. This can happen, for example, when a government imposes controls on capital imports and exports, or when it provides an official exchange rate, but limits the volume of transactions that can be carried out at that rate. In cases where a currency is not exchangeable, it is necessary to estimate the spot exchange rate on a valuation date in order to determine the rate at which a transaction would take place on that date between market participants under the prevailing economic conditions.\n\nWhen an entity applies the new requirements of this standard for the first time, it is not allowed to restate the comparative information. However, the affected amounts are required to be translated at estimated spot exchange rates at the date of initial application of the change, with an adjustment against reserves.\n\nThis amendment is effective for financial years beginning on or after 1 January 2025. Early implementation is allowed, but is pending approval by the European Union.\n\nThe Group does not foresee any impact from the application of this standard as it does not carry out transactions in these currencies.\n\n{20}------------------------------------------------\n\nImage /page/20/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circular shape. The wordmark is in a darker shade of blue, contrasting with the lighter blue of the surrounding circle. The circle is not fully closed, with a gap at the bottom, giving it a dynamic, curved appearance.\n\n#### **2.3 Basis of presentation of the consolidated annual accounts**\n\nThese Consolidated Annual Accounts of the Group were formally prepared by the parent's directors to present fairly the Group's consolidated equity and consolidated financial position as at 31 December 2023 and 2022, and the consolidated results of its operations, the changes in consolidated equity and the consolidated cash flows of the Group for the years then ended.\n\nThe figures for 2023 are presented for comparison purposes with last financial year's figures for each item in the Annual Accounts.\n\nThese consolidated annual accounts were prepared in euros, rounding the figures off to the nearest thousand, and were prepared on a historical cost basis, except for the following assets and liabilities which were measured at fair value: derivative financial instruments and the defined benefit plans. Inventories were measured at the lower of cost and net realisable value. For the Group's company in Argentina (Acerinox Argentina, S.A.), the rules relating to hyperinflationary economies are applied, as established in **Note 14.6**.\n\nThese consolidated annual accounts were prepared on the basis of the separate accounting records of the parent and of each of the subsidiaries that make up the Acerinox Group. The consolidated annual accounts include certain adjustments and reclassifications made to unify the accounting and presentation policies applied by the Group companies with those applied by the Company. The consolidation principles applied are detailed in **Note 2.5**.\n\nFor the fiscal year beginning on 1 January 2023 and ending on 31 December 2023 the three German companies of the High Performance Alloys Division (VDM Metals Holding GmbH, VDM Metals GmbH and VDM Metals International GmbH) have availed themselves of the exemption permitted under section 291.1 HGB (Handelsgesetzbuch, German Commercial Law) and section 264.3 of the same Law. These exemptions free them from the obligation to present consolidated financial statements of the VDM subgroup, as they are part of a Group that consolidates and publishes its financial statements, and also allow them certain simplifications in the authorisation for issue of separate financial statements.\n\nPreparation of the consolidated annual accounts in accordance with EU-IFRS standards requires the parent company's directors to make certain judgements, estimates and assumptions that affect the application of the accounting policies and, therefore, the figures presented in the consolidated statement of financial position and consolidated statement of profit or loss. The estimates made are based on historical experience and other factors that are considered reasonable. The Group could revise such estimates if changes were to occur in certain events or circumstances. The areas requiring the greatest degree of judgement in applying EU-IFRSs and those involving estimates that are significant for the consolidated financial statements are disclosed in **Note 3**. Also, **Note 4** provides qualitative and quantitative information on the risks assumed that could affect future years.\n\nThe Consolidated Annual Accounts for 2022 were approved by the shareholders at the Annual General Meeting held on 23 May 2023. The Group's Consolidated Annual Accounts for 2023 have not yet been approved by the shareholders at the Annual General Meeting. The Company's Board of Directors considers that these consolidated annual accounts will be approved by the shareholders at the Annual General Meeting without any changes.\n\n#### **2.4 Going concern and accrual bases of accounting**\n\nThe consolidated annual accounts were prepared in accordance with the going concern basis of accounting. Revenue and expenses are recognised on an accrual basis and not on the basis of their dates of collection or payment.\n\n#### **2.5 Basis of consolidation**\n\n#### **a) Subsidiaries**\n\nSubsidiaries are companies over which the Company directly or indirectly exercises control. The Company is deemed to exercise control when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Also, the Company is deemed to have power when it has existing substantive voting rights that give it the current ability to govern the financial and operating activities and policies of the subsidiary.\n\nThe financial statements of the subsidiaries are included in the annual consolidated annual accounts from the date on which the Group obtains control, and are excluded from consolidation on the date that control ceases to exist.\n\n{21}------------------------------------------------\n\nImage /page/21/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, arranged vertically, and enclosed within a blue circle. The circle is not fully closed, with a gap at the top.\n\nThe Group assesses the date on which control is obtained, also taking into account the possible restrictions established in the contracts that prevent control from being obtained until circumstances that are beyond the Group's control arise, such as approval by an international body or any other condition precedent provided for in the contract.\n\nThe Group took into account potential voting rights to assess the degree of control it exercises over the Group companies.\n\nThe accounting policies of the subsidiaries were adapted to the Group's accounting policies.\n\nAll the subsidiaries that form part of the Acerinox Group and were included in the scope of consolidation at 31 December 2023 and 2022 are listed in **Note 5**.\n\n#### **b) Non-controlling interests**\n\n\"Non-controlling interests\" represents the portion of the Group's profit or loss and net assets attributable to non-controlling interests. The share of non-controlling interests both in the Group's net assets and in comprehensive income for the year are presented separately in consolidated equity, in the consolidated statement of profit or loss and in the consolidated statement of comprehensive income.\n\nNon-controlling interests in the subsidiaries acquired are recognised at the date of acquisition at the proportionate share of the fair value of the net identifiable assets.\n\nThe profit or loss and each component of other comprehensive income are allocated to the equity attributable to shareholders of the parent and to non-controlling interests in proportion to their relative interests, even if this results in the non-controlling interests having a deficit balance.\n\nWhen the share of equity held by non-controlling interests changes, the Group adjusts the carrying amount of the controlling and non-controlling interests to reflect the changes that have arisen in its relative interests in the subsidiary. The Group recognises directly in equity the difference between the amount by which the non- controlling interests are adjusted and the fair value of the consideration paid or received, and attributes that difference to the owners of the parent. The profit or loss attributable to the non-controlling shareholder from the date of acquisition is recognised as profit or loss attributable to noncontrolling interests.\n\nThe Group assesses whether there are any clauses or financial instruments in contracts with non-controlling interests that could oblige the entity to deliver cash or another financial asset, or to settle it as if it were a financial liability, in order to determine its classification and measurement. For this purpose, all the terms and conditions agreed between the members of the Group and the holders of the instrument are considered. To the extent that there is an obligation or settlement provision, the instrument is classified as a financial liability in the consolidated financial statements.\n\nThese options are occasionally conditional on the occurrence of an uncertain future event beyond the control of both the issuer and the holder of the instrument. If, in addition, the issuer of such an instrument does not have the unconditional right to avoid delivering cash or another financial asset, it is deemed to be a financial liability of the issuer unless, inter alia, the part of the contingent settlement provision that could require settlement in cash or another financial asset is not genuine, i.e. is extremely exceptional, highly abnormal and very unlikely.\n\n#### **c) Associates**\n\nAssociates are all entities over which the Group exercises significant influence in relation to financial and operating decisions, but over which it does not have control or joint control. In general terms, the Group is considered to exercise significant influence when it holds more than 20% of the voting power.\n\nThe financial statements of the associates are included in the consolidated financial statements using the equity method. The Group's share of the post-acquisition profits or losses of its associates is recognised in profit or loss for each year with a credit or charge to \"share of results of companies accounted for using the equity method\" in the consolidated statement of profit or loss.\n\nLosses of associates attributable to the Group are limited to the value of the net investment, since the Group has not incurred legal or constructive obligations.\n\nThe Group does not have any significant investments in associates.\n\n{22}------------------------------------------------\n\nImage /page/22/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is enclosed within a blue circle.\n\n#### **d) Business combinations**\n\nThe Group applied IFRS 3, \"Business Combinations\" (revised 2008) to business combinations carried out on or after 1 January 2010.\n\nThe Group applies the acquisition method for business combinations.\n\nThe acquisition date is that on which the Group obtains control of the acquiree. The Group considers that control is obtained when the investor, due to its involvement with the acquiree, is exposed, or has rights, to variable returns and has the ability to affect those returns through its power over the investee. In an acquisition, the Group is generally deemed to have obtained control when the consideration is legally transferred and the assets and liabilities of the acquiree are acquired and assumed, respectively. However, control may be obtained at a prior date if, by means of a written agreement, a prior date of obtainment of control is envisaged. The Group considers all pertinent facts and circumstances in order to identify the acquisition date.\n\nThe consideration transferred in a business combination is calculated as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred or assumed, the equity interests issued and any contingent consideration that depends on future events or the fulfilment of certain conditions in exchange for control of the acquiree.\n\nThe consideration transferred excludes any amounts that are not part of the exchange for the acquiree. The costs associated with an acquisition are recognised as expenses on an accrual basis.\n\nThe Group recognises at their acquisition-date the fair value of assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree. The liabilities assumed also include contingent liabilities to the extent that they represent present obligations that arise from past events and their fair value can be measured reliably. In addition, at the acquisition date the Group recognises the indemnification assets granted by the seller following the same measurement criteria of the indemnification item of the acquired business, considering, where appropriate, the insolvency risk and any contractual limitation on the indemnified amount.\n\nUntil they are settled, cancelled or expire, contingent liabilities are measured at the higher of the amount initially recognised less the amounts that should be recognised in profit or loss in accordance with the standard on recognition of revenue from customers and the amount that would be recognised in accordance with the standard on measuring provisions.\n\nThe following are exempted from the application of the general measurement criteria: non-current assets and disposal groups classified as held for sale, long-term defined benefit obligation liabilities, share-based payment transactions, deferred tax assets and liabilities and intangible assets arising from the acquisition of previously granted rights, which shall be measured in accordance with their respective accounting policies.\n\nThe assets acquired and liabilities assumed are classified and designated for subsequent measurement on the basis of the contractual terms, economic conditions, operating and accounting policies and other pertinent conditions existing at the acquisition date, except in the case of leases in which the business acquired is the lessor, and insurance contracts.\n\nThe acquirer's application of the recognition principle and conditions may result in recognising some assets and liabilities that the acquiree had not previously recognised as assets and liabilities in its financial statements.\n\nAny excess of the consideration transferred plus the value assigned to the non-controlling interests over the net amount of the assets acquired and the liabilities assumed is recognised as goodwill.\n\nIf the business combination can only be provisionally calculated, the identifiable net assets are initially recognised at their provisional amounts, recognising the valuation adjustments made in the measurement period as if they had been known at the acquisition date and restating, where applicable, the comparative figures for the previous year. In any event, adjustments to provisional amounts only reflect information on facts and circumstances that existed at the acquisition date and, if known, would have affected the measurement of the amounts recognised at that date. The measurement period will end as soon as the acquirer receives the information it was seeking about facts and circumstances that existed at the date of acquisition or concludes that no further information can be obtained. However, such measurement period shall not exceed one year from the date of acquisition.\n\nAfter the measurement period ends, the initial accounting for a business combination is revised only to correct an error.\n\n{23}------------------------------------------------\n\nImage /page/23/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is positioned within a partial blue circle, which curves around the text, creating a sense of enclosure and emphasis.\n\n#### **e) Balances and transactions eliminated on consolidation**\n\nIntra-Group balances and transactions, as well as unrealised gains or losses with third parties arising from such transactions, are eliminated on preparation of the consolidated annual accounts.\n\n#### **2.6Translation differences**\n\n#### **a) Functional and presentation currency**\n\nThe items included in the annual accounts of each Group company are measured using the currency of the primary economic environment in which the company operates (its functional currency). The functional currency of the majority of the Group companies is the local currency, except for Bahru Stainless, Sdn. Bhd, NAS Canada, Inc. and NAS Mexico, S.A de CV, whose functional currency is the USD.\n\nThe consolidated annual accounts are presented in thousands of euros, since the euro is the functional and presentation currency of the parent.\n\n#### **b) Foreign currency transactions, balances and cash flows**\n\nForeign currency transactions are translated to the functional currency using the exchange rate prevailing at the date of the transaction.\n\nMonetary assets and liabilities denominated in foreign currencies are translated at the reporting date at the exchange rates then prevailing. Any exchange differences that arise from such translation are recognised in the consolidated statement of profit or loss.\n\nNon-monetary assets and liabilities denominated in foreign currencies and recognised at historical cost are translated to the functional currency using the exchange rates prevailing at the date of the transaction. The historical cost of non-monetary assets belonging to countries considered to be hyperinflationary is remeasured at the end of each reporting period, applying a price index to express them in terms of the measuring unit current at the end of the reporting period. Section d) includes a detailed description of the measurement of line items corresponding to hyperinflationary economies.\n\nNon-monetary assets and liabilities denominated in foreign currencies and measured at fair value are translated to the corresponding functional currency by applying the measurement date exchange rate. Exchange differences on non-monetary items measured at fair value are presented as a component of the fair value gain or loss.\n\nIn presenting the consolidated statement of cash flows, cash flows arising from transactions in a foreign currency are translated to the functional currency by applying the exchange rates prevailing at the date of the cash flow.\n\nExchange differences resulting from the settlement of foreign currency transactions and from translation to the functional currency of monetary assets and liabilities denominated in foreign currency are recognised in profit or loss.\n\n#### **c) Translation of foreign operations**\n\nFor the preparation of the Group's Consolidated Financial Statements, the assets and liabilities of the companies whose functional currency is not the euro are translated to euros by applying the exchange rates prevailing at the reporting date; on the other hand, income and expenses are measured at the average exchange rate for the period. Any exchange differences arising from that measurement are recognised as a separate component of equity and of the consolidated statement of comprehensive income (\"translation differences\"). The translation differences are reclassified to profit or loss when the company that generates them ceases to form part of the Group.\n\nThe Group applied the exemption for first-time application provided for in IFRS 1 in relation to cumulative translation differences and, accordingly, the translation differences recognised in the consolidated annual accounts that were generated prior to 1 January 2004 are shown in retained earnings in reserves.\n\nIn presenting the consolidated statement of cash flows, cash flows, including the comparative balances of foreign subsidiaries, are translated to euros by applying the same criteria as those applied for the restatement of the financial statements.\n\n{24}------------------------------------------------\n\nImage /page/24/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a circular pattern. The text is surrounded by a blue circle.\n\n#### **d) Restatement of financial information concerning hyperinflationary economies**\n\nOn 1 July 2018, Argentina was declared to be a hyperinflationary economy, as it met the classification requirements established in IAS 29. The Acerinox Group has an entity in Argentina, as detailed in **Note 5**.\n\nThe financial statements of an entity that reports in the currency of a hyperinflationary economy are stated in terms of the measuring unit current at the reporting date. Both the comparative figures for the previous year and the information for prior periods are restated only when they are significant for the Group, in terms of the measuring unit current at the end of the reporting period. Since most of the non-monetary items are recognised at historical cost, the restated cost of each item is determined by applying to the historical cost and to the accumulated depreciation and amortisation charge the change in a general price index from the date of acquisition until the end of the reporting period. The Group did not restate the balances for prior years since the impact is not significant.\n\nAt the beginning of the first period of application of this standard, the components of owners' equity, except retained earnings and asset revaluation surpluses, shall be restated by applying a general price index to the various items from the dates on which they were contributed or from the date on which they otherwise arose. The restated retained earnings shall arise from the remaining amounts in the consolidated statement of financial position. At the end of the first period and in subsequent periods, all the components of equity shall be restated by applying a general price index from the beginning of the period, or from the contribution date, if later.\n\nAll the items in the statement of comprehensive income shall be stated in the monetary unit current at the end of the reporting period. For this purpose, all the amounts shall be restated to reflect the change in the general price index from the date on which the income and expenses were included in the financial statements.\n\nGains or losses arising from the net currency position shall be included in profit or loss for the year.\n\n**Note 14.6** includes the impacts of the measurement of the financial statements of Acerinox Argentina pursuant to this standard both in 2023 and 2022.\n\n#### **2.7 Intangible assets**\n\nThe Group recognises an intangible asset only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and if the cost of the asset can be measured reliably.\n\nThe Group recognises all the intangible assets identified in a business combination separately from goodwill, irrespective of whether the acquiree had recognised the asset prior to the business combination occurring.\n\nIntangible assets are initially recognised at cost. The cost of intangible assets acquired in a business combination is equal to the acquisition-date fair value. The fair value of an intangible asset will reflect the expectations of the market participants at the acquisition date about the probability that the expected future economic benefits embodied in the asset will flow to the entity.\n\n#### **a) Goodwill**\n\nBusiness combinations are accounted for using the acquisition method. Goodwill represents the excess of the cost of acquisition of the Group's interest over the fair value of the identifiable net assets of the acquiree at the acquisition date (assets, liabilities and contingent liabilities).\n\nIn the case of the Acerinox Group, the goodwill recognised in the consolidated financial statements includes mainly the goodwill that arose in 2020 on acquisition of all the shares of VDM Metals holding, GmbH.\n\nAfter initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but rather is assessed annually (or more frequently if events indicating a potential impairment loss on the asset are identified) for impairment, pursuant to IAS 36. Accordingly, goodwill is allocated to each of the cash-generating units of the company to which the economic benefits of the business combination synergies are expected to flow. If the recoverable amount of the cash-generating unit is lower than the carrying amount of the goodwill, the corresponding impairment loss shall be recognised. The recoverable amount of the cash- generating units to which the Group's goodwill is allocated is determined based on calculations of their value in use (see **Note 2.11**).\n\n{25}------------------------------------------------\n\nImage /page/25/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue semi-circle above it. The semi-circle is thicker at the top and tapers down towards the ends.\n\nGains from a bargain purchase arising from a business combination are recognised directly in profit or loss, once the assets, liabilities and contingent liabilities of the acquiree have been remeasured, as established in the standard.\n\nInternally generated goodwill is not recognised as an asset.\n\n#### **b) Internally generated intangible assets**\n\nResearch expenditure aimed at acquiring new scientific or technical knowledge is recognised as an expense in the consolidated statement of profit or loss when incurred.\n\nDevelopment expenditure relating to research findings applied to produce new products and processes, or to significantly improve existing products and processes, is capitalised if the product or process is considered technically and commercially feasible, if the Group has the resources required to complete the development programme and if it is considered that it will generate future cash flows that will enable its recovery.\n\nDevelopment expenditure is capitalised by crediting \"work performed by the Group on non-current assets\" in the consolidated statement of profit or loss. The capitalised costs include the cost of materials, direct labour and directly attributable general expenses.\n\nThe Group does not capitalise development expenditure in cases in which, following the start-up of the project, the future cash flows of the projects obtained through research and development activities are not monitored.\n\nThe costs incurred in performing activities for which the costs attributable to the research phase cannot be clearly distinguished from those corresponding to the intangible asset development phase are recognised in the consolidated statement of profit or loss.\n\nCapitalised development expenditure is not amortised when the project is under way. Once these projects have been successfully concluded, the expenditure is amortised systematically over their estimated useful lives. In the event that the circumstances that permitted capitalisation of the project expenditure change, the portion not yet amortised is taken to profit or loss in the year of the change in circumstances.\n\nThe findings of the R&D&I activities are patented in some cases, especially in the Group's new division dedicated to the manufacture of high-performance alloys.\n\n#### **c) Customer portfolio**\n\nAs part of the business combination with the acquisition of the VDM Group, the Group recognised an intangible asset arising from the acquired company's customer portfolio.\n\nThe Group considers that the relationship with customers arising from a business combination is an identifiable asset provided that it arises from contractual or other legal rights, the rights are separable and they are expected to generate future economic benefits. It is an asset with a finite useful life.\n\n#### **d) Computer software**\n\nAcquired licenses for computer software are capitalised based on the costs incurred to acquire them and prepare them for use of the specific software.\n\nComputer software maintenance costs are recognised as such on an accrual basis.\n\nCosts directly related to the production of unique and identifiable computer software by the Group, provided that they are likely to generate economic benefits exceeding those costs over more than one year, are recognised as intangible assets. The capitalised costs include direct labour and directly attributable general expenses.\n\n#### **e) Depreciation and amortisation**\n\nIntangible assets with finite useful lives are amortised systematically over the years of their useful life. Intangible assets are amortised from the date on which they become ready for use.\n\n{26}------------------------------------------------\n\nImage /page/26/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is stacked vertically, with \"ACER\" on top and \"INOX\" below. The circle is thick and prominent, giving the logo a clean and modern appearance.\n\nThe estimated useful lives are as follows:\n\n- Intellectual property: 5 years\n- Patents: 14 years\n- Customer portfolio: 15 years\n- Computer software: 2-5 years\n\nThe Group does not have any intangible assets with an indefinite useful life.\n\nThe residual value, the depreciation method and the useful life of the assets are reviewed, and adjusted if necessary, at each reporting date. Changes in the criteria initially established are accounted for as a change in estimate.\n\n#### **2.8 Property, plant and equipment**\n\n#### **a) Owned assets**\n\nProperty, plant and equipment are stated at acquisition cost or deemed cost less any accumulated depreciation and any recognised impairment losses. Property, plant and equipment acquired in business combinations are recognised at acquisitiondate fair value.\n\nIn the event that an item of property, plant and equipment requires a period of time to get ready for its intended use, it is classified as property, plant and equipment in the course of construction. An asset is considered to be ready for its intended use when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Once in use, it is reclassified to the corresponding category of property, plant and equipment, depending on its nature.\n\nThe cost of the property, plant and equipment constructed by the Group is determined by following the same principles that would be used had it been acquired, also taking into account the criteria established for the production cost of inventories. The production cost is capitalised by crediting the costs attributable to the asset to accounts under \"work performed by the Group on non-current assets\" in the consolidated statement of profit or loss.\n\nBorrowing costs arising from loans directly related to financing the construction of items of property, plant and equipment are capitalised as a portion of the cost until the start-up of the asset. Also, the Group capitalises certain borrowing costs corresponding to loans that are not directly earmarked for the financing of investments, applying a capitalisation rate to the amounts used to finance these assets. This capitalisation rate is calculated based on the weighted average of the borrowing costs applicable to loans received by the entity which differ from those specifically designated to finance the asset. The amount of the capitalised costs does not in any case exceed the total amount of borrowing costs incurred in the period.\n\nThe cost of property, plant and equipment includes the costs related to major repairs, which are capitalised and depreciated over the estimated period until the next major repair.\n\nAfter initial recognition of the asset and once it is ready for use, only the costs incurred for improvements that it is probable will give rise to future economic benefits and that can be measured reliably are capitalised. In this connection, the costs of day-to-day servicing of property, plant and equipment are recognised in profit or loss as they are incurred.\n\nThe Group classifies spare parts as inventories, unless they are expected to be used for more than one year, in which case they are classified as property, plant and equipment and are depreciated over their useful life. Once a spare part has been used to replace a damaged part, the latter is written off at its carrying amount. Property, plant and equipment spare parts are classified under \"plant and machinery\" in the breakdown of property, plant and equipment in **Note 8**.\n\nGains or losses on the sale or disposal of property, plant and equipment are recognised in profit or loss as operating income or expenses.\n\n#### **b) Depreciation and amortisation**\n\nItems of property, plant and equipment are depreciated systematically on a straight-line basis over the years of their useful life. For these purposes, depreciable amount is understood to be acquisition or deemed cost less residual value. The Group calculates the depreciation charge separately for each part of an item of property, plant and equipment whose cost is significant in relation to the total cost of the item.\n\n{27}------------------------------------------------\n\nImage /page/27/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the top, giving it a crescent shape.\n\nThe residual value, the depreciation method and the useful life of the assets are reviewed, and adjusted if necessary, at each reporting date. Changes in the criteria initially established are accounted for as a change in estimate.\n\nLand is not depreciated, unless it is acquired in usufruct for a certain number of years, in which case it is depreciated over the term of the usufruct.\n\nProperty, plant and equipment are depreciated over the following years of useful life:\n\n- Buildings: 10-50\n- Plant and machinery: 3-30\n- Other items of property, plant and equipment: 2-10\n\n#### **2.9 Investment property**\n\nInvestment property is considered to consist of the buildings owned by the Group that are not occupied by it and are held to earn returns, either through rental or for capital appreciation.\n\nThe Group only transfers items between \"property, plant and equipment\" and \"investment property\" when a change in the use of the property occurs.\n\nInvestment property is initially recognised at cost, including transaction costs. After initial recognition, the Company applies the same requirements established for property, plant and equipment.\n\nLease income is recognised as indicated in **Note 2.20-b**).\n\n#### **2.10 Right-of-use assets**\n\nAt inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a specified period of time in exchange for consideration.\n\nWhen the Group acts as lessee, it recognises in the consolidated statement of financial position the assets and liabilities arising from the lease (except in the case of short-term leases and leases for which the underlying asset is of low value). The Group measures the right-of-use asset at cost, corresponding to the present value of the lease payments expected to be made over the lease term.\n\nIn order to determine the lease payments, the Group takes into account:\n\n- **a)** fixed payments, less any lease incentives receivable;\n- **b)** variable lease payments that depend on an index or a rate;\n- **c)** the amounts expected to be payable by the lessee under residual value guarantees;\n- **d)** the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and\n- **e)** payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.\n\nThe Group measures lease liabilities at the present value of the total remaining lease payments, discounted using either the interest rate implicit in the lease, if that rate can be readily determined, or the lessee's incremental borrowing rate, for cases in which the rate is not established in the lease.\n\nThe Group considers the lease term to be the non-revocable period of a lease, plus the periods covered by the option to extend the lease, if the lessee is reasonably certain to exercise that option.\n\nIn determining the term of the lease and assessing the length of the non-revocable period of a lease, an entity applies the definition of a contract and determines the period for which the contract is enforceable. A lease is no longer enforceable when the lessee and the lessor each has the right to terminate the lease without permission from the other party.\n\nAfter the commencement date, the Group measures the asset at its initial cost less accumulated depreciation and any accumulated impairment losses, adjusted to reflect any remeasurement of the lease liability.\n\n{28}------------------------------------------------\n\nImage /page/28/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is in a dark blue color. The text is surrounded by a blue oval shape.\n\nAlso, after the commencement date the Group measures the lease liability at amortised cost using the effective interest method. Whenever there are changes in contracts, the lessee shall remeasure the lease liability in order to reflect the new lease payments. The amount of the remeasurement of the lease liability shall be recognised as an adjustment to the right-ofuse asset.\n\nIn the case of short-term leases and leases for which the underlying asset is of low value, the Group recognises the lease payments as expenses on a straight-line basis over the lease term.\n\n**Note 10** includes detailed information on the right-of-use assets and lease liabilities recognised by the Group.\n\n#### **2.11 Impairment of non-financial assets**\n\nThe carrying amount of the Group's non-financial assets other than inventories and deferred tax assets is reviewed at the end of each reporting period in order to assess whether any indication of impairment thereof exists. If such an indication exists, the Company estimates the recoverable amount of the asset.\n\nThe Group considers that indications of impairment exist when there is/are a significant decrease in the value of the asset, significant changes in the legal, economic or technological environment that could affect the measurement of assets, obsolescence or physical impairment, idle assets, low returns on assets, discontinuation or restructuring plans, repeated losses at the entity or substantial deviation from the estimates made. That is to say, the assessment of the existence of indications of impairment takes into account both external sources of information (technological changes, significant variations in market interest rates, market values of assets, etc.) and internal sources (evidence of obsolescence, etc.).\n\nAs established in **Note 2.7**, the recoverable amount of goodwill, which is not amortised, and of intangible assets not yet available for use is estimated at the end of each reporting period, unless prior to this date indications of a possible loss of value had been identified, in which case the assets would be tested for impairment.\n\nImpairment losses on an asset are recognised whenever the carrying amount of the asset, or of the corresponding cashgenerating unit, exceeds its recoverable amount. Impairment losses on an asset are recognised as an expense in the consolidated statement of profit or loss.\n\nThe recoverable amount of an asset is the higher of fair value less costs of disposal and value in use.\n\nIn order to determine the recoverable amount, the Group occasionally may hire an independent expert.\n\nValue in use is the present value of estimated cash flows, applying a discount rate that reflects the present market valuation of the time value of money and the specific risks of the asset in question. For assets that do not generate cash inflows themselves, the recoverable amount is calculated based on the cash-generating unit to which the asset belongs, considered as the smallest identifiable group of assets capable of generating cash inflows for the entity that are largely independent of the cash inflows from other assets or groups of assets.\n\nIn estimating the value in use of an asset, the Group takes into account the estimated future cash flows that the entity expects to obtain from the asset, expectations regarding possible variations in the amount or timing of those future cash flows, the time value of money and the risks inherent in the asset in question and any other factors that any other market participant would reflect in pricing the future cash flows derived from the asset. The Group also takes climate risks into account in determining future projections.\n\nThe effects of uncertainties in estimating the asset's value in use may be reflected as adjustments to future cash flows or as adjustments to the discount rate, with the result being a weighted average of all possible outcomes.\n\nIn determining value in use, the Group bases its cash flow projections on reasonable and well-founded assumptions that represent management's best estimates of the set of economic conditions that will prevail over the remaining life of the asset, giving greater weight to external evidence. Also, these cash flow projections are based on the budgets most recently approved by management. These projections generally cover a maximum period of five years, unless a longer time period can be justified.\n\nThe Group estimates cash flow projections beyond the period covered by the budgets, extrapolating such projections using a constant growth rate which does not exceed the average long-term growth rate of the stainless-steel industry, or the rate of the country or countries in which the entity operates.\n\n{29}------------------------------------------------\n\nImage /page/29/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with the letters stacked vertically. The word is enclosed within a blue circle that is open on the left side.\n\nManagement assesses the reasonableness of the assumptions on which its current cash flow projections are based by examining the causes of differences between past and current cash flow projections, ensuring that the assumptions on which its current cash flow projections are based are consistent with actual past performance, and considering that the effects of subsequent events or circumstances that did not exist when those actual cash flows were generated justify those differences.\n\n**Notes 7.1** and **8.1** describe the variables and assumptions used by the Group to calculate recoverable amounts of both goodwill and tangible assets of the Group for which there is evidence of impairment, as well as to identify the cashgenerating units.\n\nExcept in the case of goodwill, impairment losses on an asset which were recognised in prior years are reversed through profit or loss only if there has been a change in the estimates used to determine the asset's recoverable amount since the most recent impairment loss was recognised. However, the new carrying amount may not exceed the carrying amount (net of depreciation and amortisation) that would have been determined had no impairment loss been recognised.\n\n#### **2.12 Financial instruments**\n\nThe Group recognises a financial asset or financial liability in its consolidated statement of financial position when, and only when, it is a party to the contractual terms and conditions of the instrument in question.\n\n#### **2.12.1 Classification**\n\nThe Group classifies financial assets on the basis of their measurement either at amortised cost or at fair value through profit or loss or other comprehensive income. The basis for classification depends on the entity's business model and the characteristics of the financial asset's contractual cash flows.\n\nFinancial liabilities are classified on the basis of their measurement. In general terms, they are classified as being measured at amortised cost, except for financial liabilities measured at fair value through profit or loss or other comprehensive income.\n\nThe Group does not generally reclassify any financial assets or liabilities, unless the business model changes.\n\n#### **2.12.2 Financial assets**\n\nA financial asset is any contractual right to receive cash or another financial asset.\n\nFinancial assets are initially recognised at fair value plus the transaction costs that are directly attributable to their acquisition or issue.\n\nThey are subsequently measured on the basis of each of the categories in which they have been classified:\n\n#### **a) Financial assets at fair value through profit or loss**\n\nThe Group includes derivative financial instruments in this category, unless they are designated as hedge accounting instruments and meet the effectiveness conditions to be accounted for as such.\n\nThe derivative financial instruments included in this category are classified as current assets and are measured at fair value. Transaction costs that are directly attributable to the acquisition are recognised as an expense in profit or loss.\n\nThe changes in fair value are recognised in profit or loss. The fair value of financial instruments used to hedge items classified in financial profit or loss (mainly exchange differences) is recognised under \"revaluation of financial instruments at fair value\". However, for derivatives used to hedge the prices of raw materials used by the Company in the production cycle or earmarked for sale and which are not designated as hedges for accounting purposes, such changes are recognised under \"other operating income\" or \"other operating expenses\", depending on whether the measurement gives rise to a gain or a loss.\n\n#### **b) Financial assets at amortised cost**\n\nThis category includes non-derivative financial assets with fixed or determinable payments which are not traded in an active market. Specifically, it includes loans granted and accounts receivable. They are classified as non-current only when they mature after more than 12 months from the reporting date. They are initially recognised at fair value which, in the absence of\n\n{30}------------------------------------------------\n\nImage /page/30/Picture/1 description: The image features the logo of Acerinox, a company specializing in stainless steel. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, presented in a vibrant blue color. The text is positioned within a circular shape, also rendered in the same blue hue. The overall design is clean and corporate, conveying a sense of professionalism and reliability.\n\nevidence to the contrary, is the transaction price plus any directly attributable transaction costs, and are subsequently measured at amortised cost using the effective interest method, except for accounts receivable measured at their transaction price as they do not have a significant financial component, they are expected to be received in the short-term and the effect of not discounting the related cash flows is not significant.\n\nThe Group makes the required valuation adjustments in accordance with the expected credit loss model, which takes into account historical claims incurred and other external factors. The impairment losses are calculated as the difference between the carrying amount of the aforementioned assets and the present value of the estimated future cash flows that they are expected to generate, discounted at the effective interest rate calculated upon initial recognition. These losses are recognised as an expense in the consolidated statement of profit or loss and are reversed with the recognition of income in profit or loss when the causes of their original recognition cease to exist.\n\nThe impairment loss model used by the Group is based on a historical analysis of the average credit losses at each of the subsidiaries and on the claims incurred under the credit insurance policies taken out, taking into account any non-recoverable amount (maximum coverage of 85%-95% and deductibles), and any post-claim recoveries, whether from the insurance company or the customers themselves. These estimates are reviewed within the Group's credit risk control system (Commercial, Financial and Commercial Risk Departments, the Risk Committee and the Corporate Risk Management Department), which continuously monitors the particular markets of each subsidiary, receives the input of specialists from insurance companies and reviews future estimates from international organisations of renowned prestige (IMF, OECD, etc.), also taking into account the macroeconomic estimates of each country. The Group takes into account and monitors significant changes in credit risk that may arise during the terms of the loans.\n\nAmounts relating to discounted notes and bills and factoring of trade receivables are classified until maturity as trade receivables and, simultaneously, as current bank borrowings, unless substantially all the risks and rewards associated with those assets have been transferred, in which case they are derecognised.\n\nThe Group considers that it has transferred a financial asset when it has transferred the rights to receive the cash flows from the asset, or when it has retained the rights but has assumed the contractual obligation to pay those assets to another entity. In this case, the Group also considers the various additional conditions established in the standard (it has no obligation to pay any amount to another entity, unless it receives the cash flows derived from the financial asset; it cannot sell or offer the transferred financial assets as collateral; and it has an obligation to pay the cash flows received without significant delay). Also, if the Group does not retain the risks and rewards associated with those assets, it derecognises them.\n\nMost of the factoring arrangements entered into by the Group meet this definition and, therefore, are derecognised from the consolidated statement of financial position.\n\n#### **c) Financial assets at fair value through other comprehensive income**\n\nThis category includes the Group's ownership interests in the share capital of other companies over which it does not have control or exercise significant influence, and which it does not hold for trading.\n\nThese assets are generally classified as assets measured at fair value through profit or loss; however, the Group availed itself of the irrevocable option permitted by the standard to choose, on initial recognition, to present subsequent changes in fair value in other comprehensive income, since these assets are not held for trading.\n\nThey are initially recognised at fair value which, unless there is evidence to the contrary, is the transaction price plus any directly attributable transaction costs.\n\nThese assets are subsequently measured at fair value, provided that this can be measured reliably, recognising the gain or loss in other comprehensive income.\n\nThe fair value of listed securities is determined by reference to the share price. The fair value of financial assets not listed on an organised market is calculated by discounting future cash flows.\n\nOwnership interests in the share capital of companies included in this category and whose market value cannot be measured reliably are measured at acquisition cost less any impairment losses.\n\nAcquisitions and disposals of investments are recognised at the date on which the Group undertakes to acquire or sell the asset. Investments are derecognised when the rights to the cash flows from the investments expire or have been transferred and the Group has transferred substantially all the risks and rewards of their ownership.\n\n{31}------------------------------------------------\n\nImage /page/31/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is enclosed within a blue circle, with the top and bottom portions of the circle slightly thicker than the sides. The background is white.\n\nThe difference between the selling price and the fair value of financial assets at fair value through other comprehensive income is recognised in other comprehensive income.\n\n#### **2.12.3 Financial liabilities**\n\nFor measurement purposes, the Group's financial liabilities are classified under the following categories:\n\n#### **a) Financial liabilities at amortised cost**\n\nThis category includes the accounts payable and bonds issued by the Group.\n\nIt includes non-derivative financial liabilities with fixed or determinable payments. They are initially recognised at cost, which matches their fair value, less any transaction costs incurred. They are subsequently measured at amortised cost using the effective interest method. Any difference between the amount paid (net of transaction costs) and the repayment value is recognised in profit or loss. However, trade payables maturing within one year which do not have a contractual interest rate and are expected to be paid at short-term are stated at their nominal value.\n\nThe Group derecognises a financial liability when the obligation specified in the contract is either discharged or cancelled or expires.\n\nWhen debt is refinanced, the Company assesses the significance of the modifications made to determine whether they are substantially different and, therefore, recognises the effects of the new agreement as if it were an extinguishment and, simultaneously, the recognition of a new loan. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, qualitative factors will be taken into account in the evaluation, such as the change in the interest rate from variable to fixed or the change in currency. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.\n\nAlso, the Group has entered into reverse factoring arrangements with various financial institutions in order to manage payments to suppliers. Trade payables payment of which is managed by the banks are recognised under \"trade and other payables\" until the related obligation is discharged or cancelled or expires.\n\n#### **b) Financial liabilities at fair value through profit or loss**\n\nThe Group includes derivative financial instruments in this category, provided that they are not financial guarantee contracts or designated as hedging instruments.\n\nThey are measured at fair value. The amount of the change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability shall be presented in other comprehensive income. The remaining amount of the change in the fair value of the liability shall be presented in profit or loss, unless such treatment would create an accounting mismatch in profit or loss, in which case the entire fair value change shall be recognised in profit or loss.\n\nThe fair value of financial instruments used to hedge items classified in financial profit or loss (exchange differences and interest) is recognised under \"revaluation of financial instruments at fair value\". However, for derivatives used to hedge the prices of raw materials used by the Company in the production cycle or earmarked for sale and which are not designated as hedges for accounting purposes, such changes are recognised under \"other operating income\" or \"other operating expenses\", depending on whether the measurement gives rise to a gain or a loss.\n\nAt the Acerinox Group, derivative financial instruments are generally used on a short-term basis and, therefore, the change attributable to the credit risk is not significant.\n\n#### **2.12.4 Hedge accounting**\n\nThe aim of hedge accounting is to represent in the financial statements the effect of the Group's risk management activities in which derivative financial instruments are used to hedge exposure to certain risks that might affect the statement of profit or loss. A hedging relationship qualifies for hedge accounting under IFRS 9 only if the following criteria are met:\n\n{32}------------------------------------------------\n\nImage /page/32/Picture/1 description: The image contains the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue crescent shape surrounding the text. The crescent shape is thicker at the top and tapers towards the bottom, creating a circular effect around the word.\n\n- **a)** The hedging relationship consists only of eligible hedging instruments and eligible hedged items.\n- **b)** At the inception of the hedging relationship there is formal designation and documentation of the hedging relationship and the entity's risk management objective and strategy for undertaking the hedge.\n- **c)** The hedging relationship meets the following hedge effectiveness requirements:\n\t- i. There is an economic relationship between the hedged item and the hedging instrument.\n\t- ii. The credit risk does not dominate the value changes resulting from that economic relationship.\n\t- iii. The hedge ratio is the same as that resulting from the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item.\n\nAt the inception of the hedge, the Group designates and formally documents the hedging relationship and the objective and strategy for undertaking the hedge.\n\nDerivative financial instruments are initially recognised at acquisition cost, which matches fair value, and are subsequently measured at fair value.\n\nDerivative financial instruments that do not qualify for hedge accounting are classified and measured as financial assets or liabilities at fair value through profit or loss. Derivative financial instruments that fulfil the criteria for cash flow hedge accounting are treated as such. Therefore, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income and subsequently recognised in profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.\n\nThe Group prospectively discontinues hedge accounting when the hedging instrument expires, is sold or the hedge no longer meets the criteria for hedge accounting. In such cases, the cumulative gain or loss recognised in equity is recognised in profit or loss.\n\nThe Group only undertakes cash flow hedges.\n\n#### **2.12.5 Fair value measurement**\n\nFinancial instruments recognised at fair value are classified, based on the valuation inputs, in the following hierarchies:\n\nLEVEL 1: includes financial instruments the fair value of which is determined by reference to quoted prices in active markets.\n\nLEVEL 2: includes financial instruments the fair value of which is determined by reference to variables, other than quoted prices, observable in the market.\n\nLEVEL 3: includes financial instruments the value of which is determined by reference to variables that are not observable in the market.\n\n#### **2.12.6 Renewable Energy Contracts (PPA)**\n\nThe Group has signed PPA (Power Purchase Agreement) contracts for the purchase of long-term renewable energy. These contracts are concluded through the physical purchase of energy consumed by the Group in its stainless-steel production facilities. These contracts do not allow cancellation through the exchange of financial instruments. They are therefore supply contracts for the Group's own use and the Group recognises the energy purchases in the income statement at the time of delivery for consumption and does not treat them as financial instruments.\n\n#### **2.13 Inventories**\n\nInventories are initially recognised at acquisition or production cost. Subsequently, when the net realisable value of inventories is lower than their acquisition or production cost, the appropriate write-downs are made, with the related effect recognised in profit or loss.\n\nThe Group uses the same cost formula for all inventories that have the same nature and a similar use within the Group. They are measured using the weighted average cost formula.\n\nFinished goods and work in progress are measured at the weighted average cost of raw and other materials consumed, incorporating the attributable portion of direct and indirect labour and general manufacturing costs based on the higher of normal production capacity or actual production. The Group does not include the cost of underutilisation of production capacity in the value of finished goods and work in progress. These are recorded directly as expenses for the period.\n\n{33}------------------------------------------------\n\nImage /page/33/Picture/1 description: The image shows the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circular shape that is open on the left side, creating a crescent-like effect. The blue color is a deep, saturated shade.\n\nNet realisable value is the expected selling price of those goods less costs to sell. In the case of work in progress, the estimated costs of completion are also deducted from this price.\n\nThe Group does not write down raw materials if the finished products in which they will be incorporated are expected to be disposed of at or above production cost.\n\nAny write-downs that reduce inventories to their net realisable value are reversed, up to the cost of the inventories, if the circumstances that gave rise to the write-downs cease to exist.\n\n#### **2.13.1 Emission allowances**\n\nThe Group recognises CO<sup>2</sup> emission allowances as inventories.\n\nCO<sup>2</sup> emission allowances are measured at acquisition cost. Freely allocated emission allowances are initially recognised at their market value on surrender. Simultaneously, a balancing entry for a grant is recognised for the same amount under \"deferred income\".\n\nEmission allowances remain classified as inventories until surrendered.\n\nAt the end of each reporting period the Group assesses whether the market value of the allowances is lower than their carrying amount in order to determine whether there are any indications of impairment. If such indications exist, the Group determines whether the allowances will be used in the production process or earmarked for sale, and only in the second case shall the appropriate write-downs be recognised. These write-downs are reversed when the causes that gave rise to the writedown of the emission allowances cease to exist.\n\nA provision for contingencies and charges is recognised for expenses relating to greenhouse gas emissions. This provision is maintained until the Group is required to discharge this obligation by surrendering the corresponding emission allowances. These expenses are incurred as the greenhouse gases are emitted.\n\nIn the case of freely allocated emission allowances, at the same time as the expense is recognised, the corresponding part of the deferred income account is cancelled, using an operating income account as the balancing entry.\n\nIn the case of exchanges of emission allowances, and since the Group's allowances were all freely acquired, the accounting treatment adopted by the Group is that applied to exchanges that lack commercial substance. The Group derecognises allowances surrendered at their carrying amount, and the amount received is recognised at fair value on surrender. The difference between the two values is recognised under \"deferred income\".\n\n**Note 11**, inventories, includes detailed information on the emission allowances allocated and used in 2023 and 2022.\n\n#### **2.14 Cash and cash equivalents**\n\nCash and cash equivalents include cash on hand, demand deposits at banks and other short-term, highly liquid investments, provided that they are readily convertible to cash and are subject to an insignificant risk of changes in value.\n\nIn the consolidated statement of cash flows, the Group classifies interest received and paid as cash flows from operating activities, dividends received as cash flows from investing activities and dividends paid as cash flows from financing activities.\n\n#### **2.15 Grants**\n\n#### **2.15.1 Grants related to assets**\n\nGrants related to assets are grants received by the Group for the acquisition of property, plant and equipment and intangible assets. They are recognised under \"deferred income\" in the consolidated statement of financial position. They are initially recognised at the original amount awarded, provided that there is reasonable assurance that the grants will be received and the\n\n{34}------------------------------------------------\n\nImage /page/34/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters. The letters are arranged in a slightly curved manner, following the curve of a blue circle that partially surrounds the text. The blue circle is thicker at the top and tapers off towards the bottom, creating a crescent shape around the word.\n\nGroup fulfils all the conditions attaching to them. They are subsequently taken to profit or loss on a straight-line basis over the useful lives of the related assets financed by the grants.\n\n#### **2.15.2 Grants related to income**\n\nGrants related to income are grants received to finance specific expenses. They are recognised as income as the expenses are incurred. Grants relating to the free allocation of CO<sup>2</sup> emission allowances are credited to profit or loss when the related greenhouse gas emission expense is recognised.\n\n#### **2.16 Employee benefits**\n\nEmployee benefits may comprise both short-term and long-term obligations, which include:\n\n- Short-term compensation: that which is expected to be paid in full within twelve months from the end of the reporting period in which the employees rendered their services. They are recognised as expenses in the year in which the service is rendered. They include wages and salaries, social security contributions, paid annual leave and sick leave, profit sharing and incentive or non-monetary compensation.\n- Termination benefits: these are recognised as staff costs only when the Group is demonstrably committed to severing its link to an employee or group of employees prior to the normal retirement date.\n\nLong-term commitments include:\n\n- Post-employment benefits, such as retirement benefits or any other form of compensation to employees upon termination of their employment.\n- Other long-term employee benefits such as length of service awards.\n- Pension benefits.\n- Share-based payment transactions.\n\nThe accounting policies followed by the Group where there are long-term commitments to its employees are as follows:\n\n#### **a) Defined contribution plans**\n\nA defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all the employees the benefits relating to the services rendered in the current and prior periods.\n\nCertain Group companies make mandatory, voluntary or contractual pension plan, life or other insurance policy contributions. Once the contributions have been paid, the Group does not have additional payment obligations. The contributions are classified as employee benefits and are recognised in profit or loss on an accrual basis. The benefits paid in advance are recognised as an asset to the extent that they may give rise to a cash refund or a reduction in future payments. No provisions are recognised for the defined contribution plans, since they do not give rise to future obligations for the Group.\n\n#### **b) Defined benefit plans and other obligations**\n\nA defined benefit plan is an obligation acquired by the Company to its employees to remunerate services rendered. These obligations are established in accordance with the local legislation in certain countries or contracts signed to that effect, or are included in collective bargaining agreements prevailing at certain Group companies.\n\nAccrued obligations are calculated as the present value of the accumulated benefits accrued by the employees until the reporting date, using actuarial assumptions. The calculations are made by independent experts. The Group companies recognise any corresponding provisions to cover these obligations.\n\nThe existing obligations may be classified as follows:\n\n- Pension plans: certain Group companies have acquired obligations to certain of their employees when they reach retirement age.\n- Early retirement benefits: certain Group companies are required to pay benefits to some of their employees if they opt to take early retirement.\n\n{35}------------------------------------------------\n\nImage /page/35/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue semi-circle above it. The semi-circle is thicker at the top and tapers down towards the ends.\n\n- Supplements: these plans relate to obligations agreed upon with certain Group employees to supplement their remuneration on retirement.\n- Other post-employment obligations: certain Group companies offer medical care to their retired former employees. The right to benefits of this nature is usually conditional upon the employee remaining at the Group until retirement and for a specified minimum number of years. The expected expenditure relating to these benefits is accrued over the employees' working lives.\n\nThe Group meets the obligations relating to the outsourcing of these commitments in the countries where this is applicable.\n\nThe defined benefit liability recognised in the consolidated statement of financial position corresponds to the present value of the defined benefit obligations existing at the reporting date less the fair value of the plan assets at that date. The Group recognises changes in the actuarial valuation of the obligations in other comprehensive income.\n\nWhere plan assets include qualifying insurance policies that exactly match the amount and timing of some or all of the benefits payable under the plan, the fair value of the insurance policies is considered equal to the present value of the related payment obligations and, accordingly, the Group nets the two positions in the consolidated statement of financial position.\n\nThe actuarial value of both the post-employment obligations and the pension benefits that have not been outsourced is calculated by an independent expert. The measurement is performed using the projected unit credit method, taking into account mortality tables, interest rates, discount rates, expected future salary increases and growth rates. In the case of postemployment obligations, estimates of future increases in healthcare expenses are also taken into account.\n\nThe Group recognises as an expense for the year the cost of services rendered, which corresponds to the increase in the present value of the defined benefit obligation resulting from the provision of services by the employee in the current year.\n\nIn addition, the Group recognises as an expense the net interest on the defined benefit obligation, which corresponds to the change during the year in the defined benefit obligation resulting from the passage of time.\n\n#### **c) Share-based payment transactions**\n\nThe Group applies IFRS 2, Share-based Payment, to equity-settled transactions in which the entity receives goods or services in exchange for shares of the parent.\n\nIn accordance with the terms of the share-based payment plans approved by the Group, the equity instruments granted do not vest immediately, and do so when a certain service period is completed, so the Group recognises an expense on a straight-line basis over the period in which the rights to receive such shares vest, recognising at the same time the corresponding increase in equity.\n\nThe Group measures the goods or services received, as well as the corresponding increase in equity, at the fair value of the equity instruments granted, at the grant date. Fair value is determined by the market price of the entity's shares adjusted to take into account the terms and conditions on which those shares were granted (except for vesting conditions, other than market conditions, which are excluded from the determination of fair value). The Group uses the appraisal of an independent expert, who uses the Monte Carlo method for this valuation.\n\nWhen the obligation to deliver its own equity instruments is to the employees of a subsidiary, the events must be qualified as a \"contribution\", in which case the parent recognises an increase in the value of its interest in the subsidiary, with a credit to its own equity instruments, and measures it at the fair value of the equity instruments transferred at the grant date.\n\nUpon delivery of the shares, the accounting difference between the equity item cancelled and the treasury shares delivered is recognised with a charge to the parent's reserves.\n\n#### **2.17 Provisions**\n\nThe Group recognises a provision when:\n\n- (i) it has a present obligation, whether legal or constructive, as a result of past events;\n- (ii) it is more likely than not that an outflow of resources will be required to settle the obligation; and\n- (iii) the amount can be estimated reliably.\n\n{36}------------------------------------------------\n\nImage /page/36/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is a dark color, possibly blue or black. The text is enclosed within a circular shape, also in a dark color, which appears to be a ring or outline. The background is white.\n\nThe amounts recognised in the consolidated statement of financial position correspond to the best estimate at the reporting date of the disbursements required to discharge the present obligation, after taking into account the risks and uncertainties relating to the provision and, where significant, the interest cost arising from discounting, provided that the disbursements that are to be made in each period can be reliably estimated. If discount rates are used, the increase in the provision as a result of the time elapsed is recognised as financial expense for the year.\n\n#### **2.18 Current/Non-current assets and liabilities classification**\n\nIn the consolidated statement of financial position the Group classifies assets and liabilities as current and non- current items. For such purpose, assets and liabilities are considered to be current when they are expected to be realised or settled within 12 months after the reporting date, or when they are cash or cash equivalents.\n\n#### **2.19 Income tax**\n\nThe income tax expense comprises current tax and deferred tax.\n\nCurrent tax is the tax expected to be paid in respect of the consolidated taxable profit or tax loss for the year, using tax rates enacted at the consolidated statement of financial position date and applicable to the current year. Current tax also includes any adjustment to the tax payable or receivable for prior years.\n\nDeferred taxes are calculated using the balance sheet liability method based on the temporary differences that arise between the tax bases of the assets and liabilities and their carrying amounts in the consolidated annual accounts. Deferred taxes are determined by applying the tax rates (and laws) enacted, or substantively enacted, at the consolidated statement of financial position date, and which are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.\n\nThe effect of a change in the tax rate on the deferred tax assets and liabilities is recognised in profit or loss, except to the extent that it relates to items previously charged or credited directly to the consolidated statement of comprehensive income.\n\nDeferred tax liabilities are always recognised. Deferred tax assets are recognised to the extent that it is considered probable that taxable profits or deferred tax liabilities will arise in the future against which the temporary differences can be offset.\n\nThe Group recognises in the consolidated statement of financial position the deferred tax assets arising from tax loss or tax credit carryforwards, provided that they are recoverable in a reasonable period of time, also taking into account the legally established limits for their use. The Group considered a period of ten years to be reasonable if permitted by tax legislation. For this purpose, the Group performs future earnings projections approved by management, which take into account present macroeconomic and market circumstances, and adjusts these projections based on current tax legislation in order to determine the taxable profit or tax loss.\n\nDeferred tax assets are reduced when it is no longer considered probable that sufficient future taxable income will be generated or there are no deferred tax liabilities against which the assets can be offset. Reductions are reversed if there is renewed expectation that sufficient taxable income will be available against which the derecognised balance can be utilised. Both the deferred tax asset reduction and its subsequent reversal are recognised as an increase or decrease in the tax expense, respectively, in profit or loss in the year in which they arise.\n\nThe Group only offsets deferred tax assets and liabilities if it has a legally enforceable right to do so, the assets and liabilities correspond to the same tax authority and the Group plans to realise current tax assets or settle current tax liabilities on a net basis.\n\nDeferred tax assets and liabilities are recognised in the consolidated statement of financial position under non-current assets or non-current liabilities, irrespective of the expected date of realisation or settlement.\n\nWhen tax audits result in a tax deficiency to be settled, the Group generally recognises such amounts as a current expense for the amount payable, and a deferred tax expense for the change in assets or liabilities arising from temporary differences resulting from the related tax assessment. If the amount payable is contested and the Group decides to file an appeal against the tax assessment, and furthermore considers that a favourable outcome for the Group is highly probable, it recognises an asset for the amounts previously paid and which it estimates will be recovered.\n\n{37}------------------------------------------------\n\nImage /page/37/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle that is open at the bottom.\n\nIn connection with the limited scope amendments introduced by the IASB related to the new Pillar 2 tax regulations approved by the OECD, the Group has decided to make use of the temporary exemption for the recognition of deferred tax assets and liabilities and the expense resulting from the calculation of the minimum tax rate of 15%. **Note 19** contains detailed information on the above tax standard and the analysis carried out by the Group during the year and its potential impact.\n\nCertain companies forming part of the Consolidated Group have reserves which could be taxable if distributed, since certain legislation envisages withholdings at source that affect the payment of dividends. The Group recognises the tax effect in this connection whenever it considers that the reserves will have to be distributed in the foreseeable future, which will give rise to the reversal of the temporary difference. That is to say, the parent shall not recognise a deferred tax liability when it considers that such reserves will not be distributed in the foreseeable future. The Group shall also reverse the temporary difference, against profit or loss for the year, when legislative changes eliminate or reduce the tax liability relating to those reserves.\n\nThe Company has been taxed under the consolidated tax regime since 1998. As agreed by the shareholders at the Annual General Meeting held on 28 May 2003, Acerinox, S.A. and certain of the subsidiaries with registered office in Spain form part of a consolidated tax group on an indefinite basis, with the exception of Metalinox Bilbao, S.A.U. and Inoxidables de Euskadi, S.A.U., which file tax returns separately. At 31 December 2023 and 2022, the consolidated tax group was made up of: Acerinox, S.A., Acerinox Europa, S.A.U., Roldan, S.A., Inoxfil, S.A., Inoxcenter, S.L.U. and Inoxcenter Canarias, S.A.U. As a result of the consolidated tax regime, reciprocal receivables and payables between Group companies arise, due to the offset of tax bases between them.\n\n#### **2.20 Revenue**\n\nRevenue is an increase in economic benefits during the year in the form of additions or increases in the value of assets or decreases in liabilities that result in an increase in equity and are not related to owners' contributions.\n\nRevenue depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognised when a customer obtains control of the good or service sold, i.e. when the customer has the ability to direct the use of, and obtain substantially all of the benefits from the good or service.\n\nThe Group takes into consideration the five-step model to determine when, and for what amounts, revenue should be recognised:\n\n- 1. Identify the contract(s) with a customer\n- 2. Identify the performance obligations in the contract\n- 3. Determine the transaction price\n- 4. Allocate the transaction price to the performance obligations in the contract\n- 5. Recognise revenue when (or as) the entity satisfies a performance obligation.\n\nA contract is an agreement between two or more parties that creates enforceable rights and obligations. A contract does not exist if each party to the contract has the unilateral enforceable right to terminate an unperformed contract without compensating the other party (or parties).\n\nThe main types of the Group's revenue and other income are as follows:\n\n#### **a) Sales and services**\n\nRevenue from the sale of goods is recognised in the consolidated statement of profit or loss when control of the goods is transferred to the buyer. No revenue is recognised if significant doubts exist in relation to the recovery of the amount owed or the possible return of the goods. Sales revenue is recognised at the transaction price, which is the amount of consideration to which the entity expects to be entitled in exchange for transferring the goods or services promised to a customer, excluding amounts collected on behalf of third parties.\n\nA contract is an agreement between two or more parties that creates enforceable rights and obligations. A contract does not exist if each party to the contract has the unilateral enforceable right to terminate a contract without compensating the other party (or parties). The stainless-steel sales process is performed through sales orders. From this perspective, the orders arranged by the Group with customers do not give rise to a right or obligation enforceable in advance, since the parties are entitled to unilaterally terminate an unperformed contract without compensating the other party until such time as the goods are delivered. Therefore, no obligation arises until the goods are delivered.\n\n{38}------------------------------------------------\n\nImage /page/38/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle that is open on the right side.\n\nDepending on the commercial terms and conditions of sale, the control and risk of the goods may be transferred when the materials are shipped from the Group's facilities or when they are delivered to the customer. The Group takes into account these terms and conditions of sale to determine the timing of revenue recognition. Revenue from the sale of goods is recognised in profit or loss when control over the goods is transferred to the buyer.\n\nThe Group considers all of the following factors when determining the transaction price:\n\n- variable consideration;\n- constraining estimates of variable consideration;\n- the existence of a significant financing component in the contract;\n- non-cash consideration; and\n- consideration payable to the customer.\n\nRevenue is recognised net of taxes, returns and discounts that the Group considers probable at the date the revenue is recognised, and after the elimination of intra-Group sales.\n\n#### **b) Lease income**\n\nLease income is recognised in profit or loss on a straight-line basis over the term of the lease.\n\n#### **c) Dividend income**\n\nDividend income is recognised when the right to receive it is established.\n\n#### **2.21 Environment**\n\nThe Group carries out actions the main objective of which is to prevent, reduce or repair the damage that might be caused to the environment as a result of its business activities.\n\nExpenses arising from environmental activities are recognised as expenses in the year in which they are incurred. However, the Group recognises environmental provisions, where necessary, by applying the general criteria detailed in **Note 2.17**.\n\nThe items of property, plant and equipment acquired to be used on a lasting basis in the Group's operations and the ultimate purpose of which is to minimise environmental impact and protect and improve the environment, including the reduction or elimination of pollution, are recognised as assets using measurement, presentation and disclosure criteria consistent with those discussed in **Note 2.8**.\n\n#### **2.22 Changes in accounting estimates and policies and correction of errors**\n\nThe Group applies IAS 8 to recognise changes in accounting estimates, changes in accounting policies and the correction of errors. In this regard, the Group recognises changes in accounting estimates in the year in which they occur. Accounting errors are corrected in the year in which they occurred, restating the comparative information presented in the consolidated financial statements, where the errors are material. Changes in policies are recognised retrospectively, adjusting the opening balances of each affected equity component, from the previous year presented, unless a specific transitional provision exists for the initial application of a standard or interpretation.\n\n#### <span id=\"page-38-0\"></span>**NOTE 3 – ACCOUNTING ESTIMATES AND JUDGEMENTS**\n\nIn preparing the consolidated financial statements, Group management is required to make certain judgements, estimates and assumptions that affect the application of the accounting policies and, therefore, the figures presented in these consolidated financial statements.\n\nThe accounting estimates and judgements are assessed on an ongoing basis and are based on historical experience and other factors, including expectations regarding future events that are considered to be reasonable. The Company may revise such estimates if changes were to occur in certain events or circumstances.\n\n{39}------------------------------------------------\n\nImage /page/39/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is positioned inside a crescent-shaped arc, also in dark blue, which partially encircles the text. The arc is thicker at the top and tapers towards the bottom, giving the impression of a stylized letter \"C\" or a partial circle.\n\nThe Group makes estimates and judgements regarding the future. The resulting accounting estimates may differ from the corresponding actual results. Changes in estimates are recognised in the Group's consolidated financial statements prospectively, as established in IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.\n\nThe main estimates made by the Group are as follows:\n\n#### **a) Impairment losses on goodwill and other non-financial assets**\n\nOnce a year, the Group tests goodwill for impairment, in accordance with the accounting policy detailed in **Note 2.11**.\n\nAt each reporting date the Group reviews whether there is any indication that its property, plant and equipment has become impaired, taking into account the criteria established in the policy. If any such indications exist, the entity estimates the recoverable amount of the asset in question. The recoverable amount of an asset is the higher of fair value less costs to sell and value in use.\n\nThe recoverable amounts of the cash-generating units in this year have been determined based on calculations of their value in use. Some estimates were made by an independent valuer.\n\nThe calculations of value in use are made using reasonable assumptions based on past returns and future market production and development expectations. Some of these assumptions relate to sales, margins, discount rates and perpetuity growth rates, which involve a high degree of judgement. In recent years, energy costs have also become more significant in the estimates, and the Group performs sensitivity analyses on possible changes in energy prices, mainly in European companies. **Notes 7.1** and **8.1** detail the analyses conducted by the Group in 2023 and 2022.\n\n#### **b) Fair value of derivatives and other financial instruments**\n\nThe Group acquires derivative financial instruments to hedge its exposure to exchange rate and interest rate fluctuations, as well as to fluctuations in certain raw material prices. The fair value of financial instruments not traded in active markets is determined using valuation techniques based mainly on market conditions existing at each reporting date, and provided that financial information is available to carry out this valuation. **Note 12.2.4** provides further information on the financial instruments measured on the basis of these assumptions.\n\n#### **c) Provisions**\n\nAs indicated in **Note 2.17**, the provisions recognised in the consolidated statement of financial position reflect the best estimate at the reporting date of the amount expected to be required to settle the obligation, provided that the materialisation of this outflow of resources is considered probable. Changes in envisaged circumstances could cause these estimates to vary, and they would be revised if necessary.\n\nIn the case of provisions arising from litigation in respect of which there are legal proceedings under way, the lawyers or independent experts determine the likelihood of occurrence of the events giving rise to the need to recognise a provision. In cases in which it is considered possible, although not probable, that an outflow of resources will occur or it is difficult to reliably determine the amount of the provision, the Group shall consider the provision to be a contingent liability and disclose the information in the notes (**Note 16**).\n\n#### **d) Net realisable value**\n\nAs mentioned in **Note 2.13**, the Group estimates the net realisable values of its inventories in order to recognise the appropriate valuation adjustments. The expected selling prices of the inventories less costs to sell are taken into account when determining the net realisable value.\n\n#### **e) Determination of employee benefit obligations**\n\nPension and similar obligations are determined on the basis of actuarial valuations which take into account statistical rates published by official bodies relating to future valuations such as expectations of salary increases, growth rates, mortality rates, discount rates, etc. These rates may vary significantly depending on economic and market conditions, which would cause variations in the obligations recognised in the financial statements. These assessments are carried out by independent experts.\n\nThe Group recognises in the consolidated statement of financial position the amounts arising from its employee benefit obligations, based on the actuarial valuations performed by independent experts.\n\n{40}------------------------------------------------\n\nImage /page/40/Picture/1 description: The image features the logo of Acerinox, a multinational steel manufacturing corporation. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial circle. The text and the circle are both rendered in a deep blue color. The circle is not fully closed, leaving a gap at the top. The overall design is simple and corporate, conveying a sense of stability and industrial strength.\n\n**Note 16.1** includes detailed information on the assumptions used in 2023 to perform the valuations.\n\n#### **f) Recoverability of tax loss and tax credit carryforwards**\n\nSeparately from tax legislation, which in many cases allows the recovery of tax losses without limitation, as established in the related accounting policy (**Note 2.19**), the Group recognises in the consolidated statement of financial position the deferred tax assets arising from tax loss and tax credit carryforwards, provided that they are recoverable over a reasonable period of time, which the Group has set at ten years. The Group regularly assesses the recoverability of available tax assets through earnings projections approved by management, to conclude as to whether they will be recoverable in the aforementioned reasonable period.\n\nThe Group takes into account the tax laws applicable to the determination of tax bases in the future, the restrictions on offsetting tax bases imposed by certain laws and the impact of minimum payments set in certain countries. **Note 19.3** includes detailed information on the Group's existing tax assets and the bases used to determine the recoverability of recognised tax assets.\n\n#### **g) Recognition of a deferred tax liability arising from investments in subsidiaries**\n\nAs established in the accounting policies (**Note 2.19**), certain companies forming part of the Consolidated Group have reserves which could be taxable if distributed, since certain legislation envisages withholdings at source that affect the payment of dividends, as well as limitations on the deductibility of gains from other countries distributed in the form of dividends. The Group recognises the tax effect in this connection provided that it considers that such reserves will have to be distributed in the foreseeable future. At the same time, the Group shall also reverse this temporary difference against profit or loss when new legislative changes eliminate or reduce the tax liability of these reserves.\n\nSince 2022, as a result of the entry into force in Spain of the amendment to income tax affecting the tax exemption for dividends received from Group companies, the aforementioned tax exemption for dividends received from qualifying ownership interests applicable to the parent of the Acerinox Group has been reduced to 95%, whereby it will be taxed on 5% of the dividends it receives from its subsidiaries, which will be treated as non-deductible expenses relating to management of the ownership interest. As with the distributable reserves mentioned in the previous paragraph, the Group also takes into account the tax effect if it believes that the distribution of reserves from subsidiaries will be required in the foreseeable future.\n\nAlthough there is no dividend distribution policy for subsidiaries, the Group analyses annually whether retained earnings of Group companies should be distributed to the parent company. The repatriation of dividends made in recent years guarantees the equity position of the parent company, meaning that management does not deem it necessary to distribute the reserves of its subsidiaries. Future repatriations of dividends are expected to be made based on the results obtained year by year. The Group does not therefore consider it necessary to recognise a deferred tax liability associated with such retained earnings.\n\n#### **h) Recognition of deferred tax liabilities under Pillar 2 standards**\n\nAs explained in accounting policies, in December 2021, the Organisation for Economic Co-operation and Development (\"OECD\") published the \"Pillar 2\" model standards for reforming international corporate taxation. The standard requires affected large multinational companies to calculate their effective GloBE (\"Global Anti-Base Erosion\") tax rate for each jurisdiction in which they operate. Such companies will be required to pay an additional tax on the difference between their effective GloBE tax rate per jurisdiction and the minimum rate of 15%. This standard has yet to be implemented in Spain, although it is mandatory for financial years beginning on or after 1 January 2024.\n\nWhile, as permitted by the amendment introduced by IAS 12, the Group has made use of the temporary exemption for the recognition and disclosure of deferred tax assets and liabilities related to income tax arising from Pillar 2, the Group is conducting an analysis based on the 2022 country-by-country report figures to determine the possible application of safe harbours, at least during the transitional period of 3 years foreseen by the rule. This would exempt it from calculating the minimum tax. From the analyses performed, no significant impact appears to arise from the application of this standard, as in the jurisdictions where the Group's main entities are located, effective taxes exceed the minimum payment of 15%.\n\n#### **NOTE 4 – FINANCIAL RISK MANAGEMENT**\n\nThe Group's activities, in both its stainless steel and special alloy divisions, are exposed to various financial risks: market risk (foreign currency risk, interest rate risk and price risk), credit risk, liquidity risk and climate risk. The Group aims to minimise the potential adverse effects on its financial profitability through the use of derivative financial instruments, where\n\n{41}------------------------------------------------\n\nImage /page/41/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right.\n\nappropriate to the risks, and by taking out insurance policies. **Note 12.2.6** includes a detailed analysis of the Group's derivative financial instruments at year-end.\n\nThe Group does not arrange financial instruments for speculative purposes.\n\n#### **4.1 Market risk**\n\nMarket risk arises from changes in market prices due to exchange rate or interest rate fluctuations or changes in prices of raw and other materials or supplies, which can affect the Company's earnings, its equity and the measurement of its assets and liabilities.\n\n#### **4.1.1 Foreign currency risk**\n\nThe Group operates internationally and in various currencies, particularly in the US dollar, and is therefore exposed to foreign currency risk. Foreign currency risk arises from commercial transactions as well as from financing and investment operations, and from the translation of financial statements the functional currencies of which is not the Consolidated Group's presentation currency (the euro).\n\nMonetary assets and liabilities denominated in foreign currencies are translated to the Group's functional currency at the reporting date at the exchange rates then prevailing. Any exchange differences that arise from such translation are recognised in the consolidated statement of profit or loss. To avoid fluctuations in the consolidated statement of profit or loss due to changes in exchange rates, and to ensure the expected cash flows, the Group uses derivative financial instruments to hedge most of its commercial and financial transactions performed in currencies other than the functional currency of each country. To this end, at the beginning of each month and subject to fortnightly review, each company considers its loans in non-local currency, the balances of its trade receivables and payables to suppliers in foreign currency, the sales and purchases in foreign currency forecast for that period and the currency forwards arranged. The Group may take commercial or financial transactions as a whole into account to evaluate its total exposure when hedging foreign currency transactions. The Group hedges balances with third parties and between Group companies.\n\nThe Group's business model is to hedge foreign currency risk through the use of derivative financial instruments and there is an economic relationship between the hedged item and the hedging instrument. The Group, mainly in its Stainless Steel Division, hedges cash flow risks for transactions performed in foreign currencies that are recognised in the consolidated statement of financial position; accordingly, any change in the derivative valuation is recognised in the consolidated statement of profit or loss and is offset by any changes that occur at each reporting date in the monetary items recognised in foreign currencies. The designation of these instruments as hedging instruments does not give rise to any accounting differences in the Group's consolidated statement of profit or loss. Consequently, in general, financial instruments designated to hedge foreign currency risk exposure arising from commercial transactions or transactions between Group companies are not treated for accounting purposes as hedging instruments. Instead, the Group categorises these instruments at fair value through profit or loss.\n\nIn the high-performance alloys division, as the manufacturing period is longer and orders are negotiated at a fixed price and much further in advance than in the stainless-steel division, hedging is performed immediately upon receipt of customer orders to ensure that the cash flow received matches the cash flow of the negotiations performed. The financial instruments arranged are valued at fair value through profit or loss.\n\nThe derivative financial instruments used by the Group to hedge this risk consist of foreign currency purchase and sale forward contracts in accordance with the policies approved by management.\n\nThe fair value of foreign currency forward contracts is equal to their market value at the reporting date, i.e. the present value of the difference between the current forward rate and the contract rate.\n\n**Note 12.2.6** details the financial instruments arranged by the Group to hedge this type of risk at 31 December 2023 and 2022.\n\nLastly, the Group is exposed to foreign currency risk as a result of the translation of the separate financial statements the functional currency of which differs from the Group's presentation currency, particularly the US dollar and the South African rand. The USD/EUR exchange rate at 2023 year-end was 1.1050, while at 2022 year-end it stood at 1.0666 (USD depreciation of 3.6% for the year). The exchange rate of the South African rand to the euro at 2023 year-end was 20.3477, while at 2022 year-end it was 18.0986 (rand depreciation of 12.4%).\n\nThe Group does not use financial instruments to hedge foreign investments, since these are strategic long-term investments.\n\n{42}------------------------------------------------\n\nImage /page/42/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that curves around the text. The text is in a dark color, contrasting with the white background, while the circle is a vibrant blue.\n\nNeither the Group's future profits nor the expected dividends are hedged, the latter only being hedged as soon as they are approved. **Note 14.4** includes a breakdown of the changes in translation difference items in the year.\n\nSensitivity to changes in these currencies with respect to the euro, with other variables remaining constant and based on the translation rates at the end of 2023 and 2022, respectively, was as follows:\n\n(Amounts in thousands of euros)\n\n|                  | Profit or loss   |                  | Equity           |                  |\n|------------------|------------------|------------------|------------------|------------------|\n|                  | 10% appreciation | 10% depreciation | 10% appreciation | 10% depreciation |\n| 31 December 2023 | 43,743           | -35,789          | 250,258          | -204,756         |\n| USD              |                  |                  |                  |                  |\n| ZAR              | -3,050           | 2,496            | 25,854           | -21,154          |\n| 31 December 2022 |                  |                  |                  |                  |\n| USD              | 55,321           | -45,263          | 237,048          | -193,948         |\n| ZAR              | 5,968            | -4,883           | 33,457           | -27,374          |\n\n#### **4.1.2 Interest rate risk**\n\nThe Group's financing comes from various countries and is provided in various currencies (mainly in the euro, the US dollar and the South African rand), with a range of maturity dates and with loans mostly tied to variable interest rates.\n\nThe Group's financial liabilities and financial assets are exposed to fluctuations in interest rates. To manage this risk, interest rate curves are analysed regularly and derivatives are occasionally used. These derivatives take the form of interest rate swaps which qualify for recognition for accounting purposes as cash flow hedging instruments. The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the reporting date, taking into account interest rates at that date and the credit risk associated with the swap counterparties.\n\nIn addition, the Group takes out fixed-rate loans to reduce its exposure to interest rate fluctuations. However, the Group did not take out any fixed-rate loans in 2023.\n\n70% of the Group's loans and private placements are at fixed interest rates (these figures include those loans closed at variable interest rates but hedged with an interest rate derivative).\n\nAs in 2022, the Group has continued to actively manage its loans during 2023. The majority of the Group's financing at 31 December 2023 corresponded to loans and private placements. Of these, almost 80% were due to mature in over a year.\n\n**Note 12.2.3** explains all new loan negotiations undertaken throughout the year.\n\nIn 2023, the Group has contracted five floating rate loans for a total amount of EUR 155 million, but has not contracted any interest rate derivatives to hedge against changes in the floating interest rate.\n\nThe last two years have been marked by interest rate increases. The rate hike that started in 2022 came to an end in the middle of this year. The last FED hike took place in July, reaching the highest level in 22 years (5.25%-5.5%). In Europe, increases slowed in September 2023, with the highest level since 2001 (4.5%).\n\nDue to the continued increase in interest rates and the high percentage of fixed-rate loans, the Group has decided not to contract new derivatives in 2023.\n\nThe risk to the Group from rising interest rates is limited, as the Group's net financial debt amounted to EUR 341 million, with bank borrowings of EUR 2,135 million and cash balances of EUR 1,794 million. Acerinox has currency deposits in US dollars. These USD deposits provide a remuneration that is higher than the remuneration of the euro interest rates to which most of the Group's variable interest rate loans are referenced, thereby mitigating the risk of an increase in interest rates.\n\nIn 2022, the Group did contract a derivative (Interest Rate Swap) with Caixabank for EUR 260 million.\n\n**Note 12.2.6** details the financial instruments arranged by the Group to hedge this type of risk at 31 December 2023 and 2022.\n\n{43}------------------------------------------------\n\nImage /page/43/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a slightly italicized style. The word is positioned inside a blue circle that is not fully closed, leaving a gap at the top right. The color of the text is the same blue as the circle.\n\nIn relation to the Group's interest rate sensitivity, had interest rates on its outstanding debt at year-end been 100 basis points higher, with all other variables remaining constant, the consolidated profit after tax would have been EUR 9.2 million lower (2022: EUR 7.2 million lower) due to higher borrowing costs on floating-rate debt not covered by interest rate swaps. The effect on the Group's equity of such an increase in interest rates across the entire interest rate curve would have been an increase of EUR 0.1 million (2022: an increase of EUR 5.3 million), since the higher borrowing costs would have been comfortably offset by increases in the values of its interest rate hedging derivatives held at the reporting date.\n\n#### **4.1.3 Price risk**\n\nThe Group is exposed to several types of price risk:\n\n#### **1. Risk due to energy price fluctuation**\n\nOver the last years, the high volatility in the price of supplies, principally gas and electricity, have acquired special relevance.\n\nAs the Group's factories are electro-intensive consumers of energy, these variations pose a risk due to the impact they have on the manufacturing costs of both stainless steel and high-performance alloys.\n\nThe steel sector requires an intensive use of energy to melt scrap and ferroalloys in electric furnaces to obtain molten material, as well as the use of fossil fuels such as natural gas in the heating and melting processes. Acerinox is therefore working to continuously improve its production processes, promoting innovation and the development of more efficient and cleaner technologies in steel production and supporting advances in less polluting and more sustainable processes.\n\nAlthough energy prices have fluctuated worldwide, they have been particularly relevant in Europe, which means a loss of competitiveness compared to other producing countries in the world. The Group has factories in Spain, Germany, the United States, South Africa and Malaysia.\n\nWhile energy prices in Europe are down this year from their peak levels in 2022, when they were primarily affected by Russia's invasion of Ukraine and international sanctions, they remain at very high levels compared to previous years. In the other countries where the Group has its factories, energy prices have risen by 20-25%. Gas prices, however, have fallen by around 60% in the United States and remained constant in South Africa.\n\nThe average price of electricity for the Group in Spain in 2023 is 30% higher than the costs of its factory in the United States and 20% higher than in South Africa. In the case of gas prices, the two plants have around 80% cheaper costs.\n\nIn 2023, the fall in gas and energy prices at the Campo de Gibraltar plant alone, which is most affected by cost volatility, meant a reduction of EUR 138 million compared to the previous year's prices. On the other hand, in 2022, the increase in prices compared to 2021 had a negative impact of EUR 136 million, only in that plant.\n\nThe Group seeks to mitigate the effects of volatile energy costs by improving the efficiency of energy consumption and by entering into PPAs (Power Purchase Agreements). As explained in the section on the Group's accounting policies, forward purchase contracts for energy are realised through the physical purchase of energy consumed by the Group in its stainlesssteel production facilities. They are therefore supply contracts for own use.\n\nThe objectives pursued by contracting PPAs are threefold:\n\n- Adequate hedging so that the final price is not so exposed to the fluctuations of the daily market\n- To fulfil the requirements of electricity-intensive consumers and those of indirect CO<sup>2</sup>\n- The consumption of green and/or renewable energy, as all of the Group's PPAs are linked to guarantees of origin\n\nOnly the Group's Spanish factories have this type of contract. The contracts signed, mainly by the Acerinox Europa factory, which has the largest volume of these contracts, guarantee 43% of Acerinox Europa's consumption until 2029, considering normal production levels. Acerinox has contracted an annual volume of 380.32 GWh until 2029.\n\nIn the area of high-performance alloys, the impact of energy price increases this year was limited by the hedging policy applied.\n\nDue to its electro-intensive nature, energy cost management is a strategic area for the Group and a constant element in excellence plans. The Group is constantly analysing alternative sources of supply in order to reduce costs.\n\n{44}------------------------------------------------\n\nImage /page/44/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that curves around the text. The text is in a dark color, contrasting with the white background, while the circle is a vibrant blue.\n\nReducing energy consumption is a key issue for Acerinox. Therefore, Acerinox has set a target of reducing the energy intensity of the stainless-steel division by 7.5% in 2030 compared to 2015 levels.\n\nDue to the impact of energy price fluctuations on the Group's costs, management has included this variable as a key assumption in valuations and forward estimates, particularly in Europe, and sensitivity analyses to energy price fluctuations are under way. A 10% fluctuation in the price of energy, both electricity and gas, compared to 2023 prices would have meant an upward or downward change in expenditure of around EUR 31 million, with all other variables remaining constant. The Group tries to pass these impacts on to sales prices, but as it is a competitive market with producers in different countries, this is not always possible.\n\nEmission allowances have remained at constant levels over the last two years at around EUR 80/allowance. The volatility of the price of allowances has hardly any impact on the stainless-steel division, given that the Spanish factories have enough free allowances allocated to them to cover their needs. As described in the accounting policy in **Note 2.13.1**, when the free allocation rights are consumed, income in the same amount is recognised at the same time as the expense is recognised and the corresponding part of the deferred income is reversed. Therefore, any increase in the price of rights allocated free of charge will be offset by income, thus not affecting the Group's income statement.\n\nIn the case of the high-performance alloys division, the free allocations obtained are lower than plant needs, meaning that rights have to be acquired on the market. In view of the significant price increase and future forecasts, the Group decided to implement a long-term purchase plan in 2021, acquiring 100% of the rights that it expects to use during 2022 and 2023, thus hedging against price fluctuations. This purchase was made at very competitive prices and below current quotations. The Group continues to systematically monitor price changes and take advantage of opportunities to meet its consumption needs.\n\n#### **2. Risk of changes in raw material prices**\n\nThe Group's exposure to raw material price fluctuations is different in the stainless-steel division than in the high performance alloys division, since, although both of the Group's divisions use metals listed on the London Metal Exchange as raw materials, the performance of demand and the way in which raw material price changes affect the markets are substantially different in each division.\n\n#### 2.1. **Raw materials used for the stainless-steel division**\n\nStainless steel is an alloy of iron, chromium ( $> 10.5%$ ) and carbon ( $< 1.2%$ ) to which other minerals such as nickel or molybdenum are added to give it certain properties. Nickel is one of the minerals that are present in all austenitic alloys, the most common on the market, in a variable percentage between 6 and 22%. Both nickel and molybdenum are listed on the London Metal Exchange and their prices are therefore subject to fluctuations in market prices.\n\nThe cost of raw materials accounts for about 70% of the total cost of the product, and of this, nickel accounts for about 50%. Therefore, nickel price volatility has a direct and significant effect on the cost of stainless steel. Consequently, the strategy in relation to setting selling prices and the repercussion of such fluctuations is one of the most critical functions and requires significant market knowledge. The price of nickel, because of its influence on the cost of stainless steel, ultimately determines the price of the final product, and there is a direct correlation between the two prices.\n\nHowever, stainless steel is a \"commodity\" product where consumers, belonging to different sectors such as metal traders, construction, engineering, automotive, kitchen appliances, industrial machinery, etc., value trust in some manufacturers more than others, but where the final price is ultimately the key to supplier selection.\n\nProducers try to pass on the volatility of raw materials in the price of the final product through a variable price mechanism called \"alloy surcharge\". The alloy surcharge is a mathematical formula, calculated on a monthly basis by each of the market's stainless-steel producers, that takes into account changes in the prices of certain raw materials (particularly nickel, chromium and molybdenum) and fluctuations in the EUR/USD exchange rate. The application of this alloy surcharge allows nickel price fluctuations on the London Metal Exchange to be passed on to customers during the order manufacturing phase, as well as fluctuations in the prices of other raw materials and in the EUR/USD exchange rate.\n\nWhile this mechanism is consistently followed in some markets such as the United States and South Africa, it does not work in the same way in Asia, where producers offer fixed prices at the time of negotiation. This has an impact on markets where imports are higher, such as in Europe, which sometimes prevents this pricing system from being passed on to the end customer.\n\nAs was the case from the second half of 2022 onwards, in 2023, the mitigating effect of the alloy surcharge on the risk of price changes performed differently in the United States and in Europe. While in the North American market the alloy\n\n{45}------------------------------------------------\n\nImage /page/45/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the word. The circle is not complete, but rather a thick arc that starts and ends near the top of the word.\n\nsurcharge is always respected and is a factor of price stability, in Europe the traditional system of base price and alloy surcharge has been partially replaced by an effective pricing system due to import pressure.\n\nOver the course of the year, demand remained at a very low level due to excess stainless-steel inventories in the supply chain and geopolitical instability, keeping prices under pressure throughout the year and reaching unprecedented record lows.\n\nHowever, in the United States, where the Group has a significant market share, the Group's strategy of containing supply in order to maintain prices has been very effective and has enabled the Group to contain fluctuations in base prices.\n\nThe downward trend in the price of nickel persisted over the period, beginning in 2023 above USD 31,000/t and ending at a price near USD 16,500. One of the main reasons for this sharp fall was the increased availability of all nickel sources. The gradual increase in stocks on the London and Shanghai metal exchanges also contributed to maintaining this downward trend in the price.\n\nThe Group aims to minimise the impact of fluctuating raw material prices by keeping low inventory levels across the production chain, along with applying an alloy surcharge mechanism.\n\nDue to all the variables involved in the price mechanism and the influence of the markets, determining the Group's sensitivity to price volatility in the stainless-steel division is very difficult.\n\n#### 2.2. **Raw materials used for the high-performance alloys division**\n\nThe high-performance alloys division involves alloys whose content of listed metals such as nickel is much higher than that of stainless steel, reaching up to almost 100% in certain alloys. In addition, they may also contain other metals such as copper, cobalt, aluminium and molybdenum. The metal content in this type of alloys accounts for 2/3 of the total cost of the product and the selling price of these alloys is up to 10 times higher than that of stainless steel. The manufacturing period lasts around three to four months and, accordingly, the Group must purchase metals several months before they are sold.\n\nDue to the percentage of metals in the total cost of the product and the associated price volatility, customers in this sector always demand fixed prices, which the Group guarantees when orders are received, initially assuming the full risk of raw material volatility. To mitigate this risk, the Group has a metals trading department in this division, which is responsible for entering into derivatives on the LME (London Metal Exchange) to hedge the metal purchases required to manufacture the products demanded by customers. In the case of metals not listed on the LME, natural hedges through physical stock are undertaken.\n\nIn order to avoid the volatility caused by the valuation of these derivatives in the income statement, following the incorporation of the High Performance Alloys division into the Group, it was decided to carry out an analysis of the economic model and hedging relationships in order to assess the possible application of hedge accounting to these derivatives. At 1 January 2021, hedging relationships for new derivatives entered into from that date were documented and a model to ensure hedge effectiveness was implemented, so the Group started to apply hedge accounting for the recognition of a large number of these financial instruments. **Note 12.2.6** includes detailed information on these instruments.\n\nA 20% increase in the price of listed metals, which the Group hedges through forward purchases and sales, would currently have an impact on the valuation of derivatives of EUR 19 million, which would have a direct impact on other comprehensive income (equity). On the other hand, a 20% drop in the price of these metals would have a negative impact of EUR -19 million on the Group's equity.\n\n#### 2.3. **Risk of price distortion due to the accumulation of stock in the market**\n\nThe stainless-steel market is characterised by robust demand, which has grown at an annual rate of approximately 6% for over 50 years. The demand for stainless steel for all industrial applications and its presence in all industries guarantee that this growth rate will be sustained in the coming years. Although end consumption continues to grow steadily, the fact that this market is largely controlled by independent wholesalers leads to volatility in apparent consumption, based on their expectations regarding nickel price trends on the London Metal Exchange (LME) and their resulting stockpiling or inventory realisation strategies.\n\nFluctuations in the price of nickel also affect consumer demand. Reductions in the price of nickel tend to go hand in hand with short-term drops in demand. Conversely, a rise in nickel prices tends to go hand in hand with higher demand. To lessen the risk associated with the predominant market control held by independent stockists, the Group's strategic approach involves emphasising direct sales to end customers rather than relying on stockists. The Group's commercial network allows for the distribution of products to end customers via warehouses and service centres, facilitating sales stability and mitigating this risk.\n\n{46}------------------------------------------------\n\nImage /page/46/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a white circle. A blue crescent shape partially surrounds the white circle, creating a border effect.\n\n#### 2.4. **Risk of overvaluation of inventories**\n\nThe convenience of maintaining sufficient inventory levels at the Group's warehouses entails the risk that these inventories might be overvalued with respect to their market price. The Group mitigates this risk by keeping strict control of its inventory levels.\n\nThe valuation of raw materials, work in progress and finished goods at average cost also helps to reduce the volatility of costs and, therefore, the impact of nickel price fluctuations on margins.\n\nDuring the year, an adjustment of inventories to net realisable value of EUR 65 million was necessary due to the continued fall in prices.\n\n#### **4.1.4 The impact of Russia's invasion of Ukraine**\n\nAlthough the conflict between the two countries has continued throughout the year, it has not had a significant impact on the Group. Energy prices have corrected from the levels reached at the beginning of the conflict, which has allowed the Group to reduce its costs, as explained in the section on energy price risk.\n\nAs far as the Group's business was concerned, from the moment the war started, its exposure in Russia was reduced to a minimum and sales were halted. The Group is currently in the process of closing its commercial office in that country.\n\nWith regard to purchasing, the Group has very diversified sources of supply of raw materials and follows a strategy of responsible purchasing. Significant efforts were made since the beginning of the conflict to secure alternative supplies, which made it possible for the Group not to be dependent on Russian raw materials.\n\nDue to the uncertainties that existed at the outbreak of the war regarding Germany's dependence on gas supplies from Russia, the Group set up a monitoring committee to assess the impact of possible measures in that country and to mitigate the consequences. Ultimately, the country acted swiftly to seek alternative sources from other countries and none of the initially expected risks materialised.\n\nManagement considers that the impact this conflict could have on future projections is not significant.\n\n#### **4.2 Credit risk**\n\nCredit risk is defined as the possible loss that could be incurred through failure of a customer or debtor to meet contractual obligations.\n\nThe Group's exposure to credit risk is determined by the individual characteristics of each customer and, where applicable, by the risk inherent to the country in which the customer operates. Due to the diversity of its customers and the countries in which the Group operates, credit risk is not concentrated in any individual customer, sector or geographical region. None of the Group's customers, whether in the stainless steel or the high- performance alloys division, account for more than 10% of the Group's total sales.\n\nThe Group hedges its commercial and political risks either through credit insurance companies, or through letters of credit and bank guarantees extended by banks of recognised solvency located in countries with low financial risk. Credit insurance hedges between 90% and 95% of declared commercial risks, depending on the country in which the customer is located and the insurance company, and between 90% and 95% of political risks. The Group's main credit insurer has an A1 credit rating from Moody's and an A (excellent) rating from A.M. Best.\n\nIn 2023, payouts of EUR 351 thousand were collected under the credit insurance policy (2022: EUR 742 thousand).\n\nA Risk Committee is responsible for monitoring the Group's credit risk policy. New customers are analysed in conjunction with the insurance company, which assigns a covered amount, enabling the Group to offer its general payment terms to those that fulfil the required credit conditions. Where required, the Risk Committee also performs a case-by-case analysis of customers' creditworthiness, setting internal risk limits and payment terms. Otherwise, payment in cash is required.\n\nThe Risk Committee consists of representatives from the sales, financial and legal departments. The risks of the companies that make up the Acerinox Group are analysed and information is, in turn, received from the Delegated Risk Committees of\n\n{47}------------------------------------------------\n\nImage /page/47/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters. The text is positioned inside a blue circle.\n\nNorth American Stainless, Bahru Stainless, Columbus, Grupinox (which represents the sales network in Spain) and VDM Metals.\n\nAmong other duties, the Risk Committee reviews the status of past-due debts, monitors sales with excessive exposure and authorises the transfer of internal risk or, depending on the amount, requests approval from the Management Committee. The Group has a formalised credit risk policy that ensures the control of credit risk in the trading companies by defining various internal risk levels, which must be approved by the responsible persons named in the policy.\n\nThe Group has long-standing commercial relationships with many of its customers. Delays in payment result in specific monitoring of future deliveries, payment terms and the review of credit limits.\n\nWhere permitted under local legislation in the country in which the customer operates, retention of title clauses may exist, to secure recovery of goods in the event of default.\n\nThe Group occasionally uses other financial instruments to reduce credit risk, such as factoring operations. The Group derecognises factored financial assets when the risks and rewards of these assets have been substantially transferred.\n\nThe Group makes the valuation adjustments to trade receivables it deems necessary based on an expected credit loss model which analyses the average credit losses at each of the subsidiaries and the claims incurred on the credit insurance policies taken out, as detailed in **Note 2.12.2**.\n\n**Note 12.2.1** details the changes in valuation adjustments to trade receivables.\n\nThe consolidated balance of trade receivables at 31 December 2023 was EUR 560,002 thousand (2022: EUR 575,036 thousand), and revenue in 2023 amounted to EUR 6,607,978 thousand (2022: EUR 8,688,494 thousand). This represented an average collection period of 31 days at the Group (2022: 24 days).\n\nCredit risk insurance was taken out for 53% of consolidated net sales (2022: 51%). Cash conditions existed for 4% of sales (2022: 3%). Confirmed letters of credit or guarantees were used to hedge credit risk in 1% of consolidated net sales (2022: 1%). Domestic sales by North American Stainless Inc., which entail a very low risk due to the collection period of under 30 days, accounted for 37% of consolidated net sales (2022: 41%), allowing deliveries to be controlled and reducing potential impairment losses.\n\nThe analysis of the age of the receivables is as follows:\n\n(Amounts in thousands of euros)\n\n| 2023                      | %<br>receivables | 2022 | %<br>receivables |      |\n|---------------------------|------------------|------|------------------|------|\n| Not past due              | 453,770          | 81 % | 479,565          | 83 % |\n| Less than 30 days         | 89,062           | 16 % | 75,550           | 13 % |\n| Between 30 and 60<br>days | 10,985           | 2 %  | 13,282           | 2 %  |\n| Between 60 and 90<br>days | 2,028            | 0 %  | 1,554            | 0 %  |\n| More than 90 days         | 4,157            | 1 %  | 5,085            | 1 %  |\n| TOTAL                     | 560,002          |      | 575,036          |      |\n\nThe Group has made provisions for EUR 4,107 thousand (2022: 4,868 thousand of euros). A provision was made for EUR 543 thousand in 2023 (2022: EUR 864 thousand), accounting for 0.008% of sales 2023 (2022: 0.010%); the Group's expected credit loss ratio is 0.018% (2022: 0.019%).\n\nMost of the past-due receivables are insured and generally reflect customary delays in trading activity (84% of past-due receivables are aged less than 30 days). At 16 February 2024, over 85% of the aforementioned past-due balances had been collected (2022: 90%).\n\nIn view of the default rates in all industries, the Group considers that the above figures are highly satisfactory and confirm the success of its commercial risk policy.\n\n{48}------------------------------------------------\n\nImage /page/48/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, stacked on top of a blue circle that is open at the top.\n\nIn short, neither the accident rate nor payment delays are higher than in any other year, even against the backdrop of geopolitical uncertainty. The Group does not expect significant impacts in the future in view of the risk coverage policy in place and the high percentage of risks covered.\n\nAny advances to non-current asset suppliers are hedged through bank guarantees issued by the supplier and confirmed by banks of recognised solvency.\n\nIn relation to the credit risk of bank balances, as a general rule only banks and financial institutions that are rated by an independent third party with an \"investment grade\" credit rating are accepted. The Group has no significant concentration of risk, as the likelihood of default by the banks and financial institutions thus authorised is remote, based on their high credit ratings.\n\n#### **4.3 Liquidity risk**\n\nLiquidity risk is the risk of not being able to meet present and future obligations, not having the funds required to perform the Group's activities.\n\nThe Group is primarily financed through the cash flows arising from its operations, in addition to loans and financing facilities.\n\nDuring the year, the Company has maintained good access to liquidity through long-term loans and financing facilities in excess of the amounts needed at any given time.\n\nThe Group's cash resources are centrally managed in order to optimise resources. The Group's debt is primarily concentrated within the parent of the Group (more than 65% of total gross debt at year-end).\n\nBased on its cash flow estimates and considering its investment plans, the Group has sufficient funding to meet its obligations, and maintains a sufficient level of undrawn credit facilities, as well as high levels of liquidity, to hedge liquidity risk.\n\nIn 2023 and 2022, no defaults occurred on the principal or interest of the Group's various financing facilities.\n\nAt year-end the Group had access to short- and long-term financing facilities totalling EUR 2,807 million and approved nonrecourse factoring facilities amounting to EUR 530 million. The amount drawn down on the financing facilities at 31 December 2023 amounted to EUR 2,135 million and EUR 297 million on the factoring facilities. In 2022, the short- and long-term financing facilities available to the Group amounted to EUR 2,786 million, and non-recourse factoring facilities amounted to EUR 480 million, while the drawdowns against the financing facilities amounted to EUR 1,989 million and drawdowns against the factoring facilities amounted to EUR 329 million. At 31 December 2023, cash and cash equivalents amounted to EUR 1,794 million (2022: EUR 1,548 million).\n\nCash and cash equivalent balances are available and there is no restriction on their use.\n\nThe Group makes short-term cash placements –never exceeding six months– and only at banks of recognised solvency.\n\nIn addition, the Group continuously monitors the maturity profile of its financial debt in order to establish the longest possible annual maturities.\n\nIn this regard, the most notable financing operations in 2023 were as follows:\n\n- Renewal of syndicated factoring in Spain until 2026, increasing the maximum amount to EUR 380 million and including a new transferor (VDM Metals International)\n- Renewal of the Columbus Borrowing Base Facility in South Africa until 2027 for a total maximum amount of ZAR 3,500 million\n- Renewal and extension of credit facilities up to a total amount of EUR 301 million and USD 135 million\n- Signing of five new long-term loans with various financial institutions for a total amount of EUR 155 million in Spain\n- 1.5 year extension of the loan signed by VDM with Intesa Sanpaolo for EUR 30 million\n- Extension of an additional year (until 2025) of the bilateral financing facilities signed with VDM with 5 financial institutions for a total amount of EUR 210 million\n\n{49}------------------------------------------------\n\nImage /page/49/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle surrounds the word, creating a clear and recognizable brand mark.\n\n• Increase in Bahru's short-term financing facilities (credit facilities and revolving credit facilities) to a maximum of USD 145 million\n\nThese financing transactions are explained in **Note 12.2.3**.\n\nThe most noteworthy financing transactions in 2022 were as follows:\n\n- Renewal and extension of credit facilities up to a total amount of EUR 301 million and USD 135 million\n- Novations of existing loans with extension of amounts up to EUR 320 million and with extension of maturities\n- Signing of five new long-term loans with various financial institutions for a total amount of EUR 145 million\n- Refinancing of VDM for a total amount of EUR 340 million, through a long-term loan of EUR 50 million and seven bilateral financing facilities for an aggregate amount of EUR 290 million\n- Increase in lines for the issuance of import letters of credit by more than EUR 100 million\n\nThe analysis of the Group's payment obligations at the end of 2023 is as follows:\n\n(Amounts in thousands of euros)\n\n|                                               |                         | 2023                                   |                       |                |           |           |                            |                          |  |\n|-----------------------------------------------|-------------------------|----------------------------------------|-----------------------|----------------|-----------|-----------|----------------------------|--------------------------|--|\n|                                               |                         | Future cash flow maturities (payments) |                       |                |           |           |                            |                          |  |\n|                                               | Amount at<br>31/12/2023 | Amount of<br>future<br>payments        | Less than 6<br>months | 6-12<br>months | 1-2 years | 2-5 years | More<br>than<br>5<br>years | Undetermined<br>maturity |  |\n| Non-current<br>payables                       | 1,291,156               | -1,391,921                             | -26,001               | -25,440        | -546,936  | -786,170  | -7,374                     |                          |  |\n| Current<br>payables                           | 843,731                 | -878,118                               | -114,296              | -763,822       |           |           |                            |                          |  |\n| Payable to<br>suppliers and<br>other payables | 916,472                 | -916,472                               | -916,472              |                |           |           |                            |                          |  |\n| Other non<br>current financial<br>liabilities | 19,799                  | -19,799                                |                       |                | -10,181   | -2,660    | -1,614                     | -5,344                   |  |\n| FINANCIAL<br>DERIVATIVES                      |                         |                                        |                       |                |           |           |                            |                          |  |\n| Hedges through<br>interest rate<br>swaps      | -21,358                 | 21,998                                 | 7,235                 | 5,314          | 5,381     | 4,068     |                            |                          |  |\n| Commodity<br>derivatives -<br>purchases       | 11,998                  | -11,998                                | -7,764                | -2,935         | -1,291    | -8        |                            |                          |  |\n| Commodity<br>derivatives -<br>sales           | -4,455                  | 4,455                                  | 328                   | 4,127          |           |           |                            |                          |  |\n| Currency<br>forwards against<br>exports       | -2,158                  | -2,158                                 | -2,158                |                |           |           |                            |                          |  |\n| Currency<br>forwards against<br>imports       | 4,860                   | 4,860                                  | 4,860                 |                |           |           |                            |                          |  |\n| TOTAL                                         | 3,060,045               | -3,189,153                             | -1,054,268            | -782,756       | -553,027  | -784,770  | -8,988                     | -5,344                   |  |\n\nThe balances of \"payable to suppliers and other payables\" do not include payables to Public Administrations. All the maturities of the debt with suppliers are short-term.\n\n\"Other non-current financial liabilities\", which are categorised as liabilities with an indefinite maturity, mainly relate to deposits and guarantees that have no specific maturity date or for which the date of repayment is unknown. The remainder are leasing payments.\n\nFuture cash flow maturities include the principal plus interest based on contractual interest rates at year-end.\n\nApproved investments not recognised under property, plant and equipment under construction at the reporting date are not included.\n\n{50}------------------------------------------------\n\nImage /page/50/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned within a blue circle that is open at the top and bottom, creating a crescent shape around the word.\n\n#### **4.4. Climate risk**\n\nStainless steel is a sustainable and durable material, and one which is highly resistant and infinitely recyclable. Despite these positive qualities, the steel sector accounts for a considerable proportion of global industrial emissions. This phenomenon is due to the intensive use of energy needed to melt scrap and ferro-alloys in electric furnaces in order to obtain molten material, as well as to the use of fossil fuels, such as natural gas, in the heating and melting processes. Reducing emissions in the steel industry is essential to mitigate climate change and meet global targets.\n\nAcerinox is aware of the risks it faces that stem from climate change. The company pays special attention to environmental protection and the efficient use of natural resources in the development of its activities.\n\nAcerinox is committed to decarbonising its operations through the implementation of the Positive Impact 360º Sustainability Master Plan. This plan includes eco-efficiency and climate change mitigation as core components and aims to reduce the intensity of greenhouse gas emissions (Scope 1 and 2) by 20% by 2030, with 2015 as the reference year.\n\nThe Group has also introduced a sustainability and climate change policy supported by complementary policies that define its commitments to mitigate climate change.\n\nAcerinox's model for managing climate change follows the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and includes information on governance, strategy, risk management and opportunities, as well as metrics and targets. Acerinox understands that business management is linked to a commitment to sustainability which takes the form of the specific, ambitious and measurable objectives that are set out in the company's Sustainability Plan.\n\nThe Board of Directors is ultimately responsible for the Group's climate change management through the sustainability and audit committees within their spheres of influence.\n\nThe Group's climate risk management is integrated into corporate risk management.\n\nClimate risks are overseen by the Audit Committee of the Board of Directors, as part of its function of overseeing the comprehensive risk control system. Likewise, climate risks are examined in the Sustainability Committee, which is also part of the Board of Directors.\n\nIn order to strengthen risk management, a physical and transition risk analysis was conducted in 2023 following the TCFD methodology. The study considered the impact that climate change would have on each of the Group's facilities over two time horizons, 2030 and 2050, and under two climate scenarios. Details are included in the Non-Financial Information Statement.\n\nThe Company has joined the UN Global Compact's Climate Ambition Accelerator initiative in Spain. It is a programme to guide companies in setting quantifiable emission reduction targets based on science and developing concrete plans to achieve them. Through this initiative, it is hoped that Spanish companies, including Acerinox, will become leaders in climate change mitigation.\n\nAcerinox defines its commitment to climate change mitigation through four key principles:\n\n- **Improving energy efficiency:** through initiatives such as heat recovery boilers, use of autonomous electric vehicles (AGVs), etc.\n- **Increased use of renewable energy:** by contracting PPAs and purchasing renewable energy certificates and by installing solar panels for self-consumption in our own facilities.\n- **Use of sustainable fuels:** the feasibility of replacing natural gas consumption with other carbon-neutral fuels, such as biomethane or green hydrogen, is analysed.\n- **Carbon capture, use and storage:** studies on the technical and economic feasibility of capturing part of the CO<sup>2</sup> produced in factories.\n\nIn addition, during 2023, the company worked on the development of the new efficiency plan, \"Beyond Excellence\", for the next three years, 2024-2026. The Plan was approved by the Board of Directors at the close of 2023 and comprises six key components, with a focus on productivity and automation, efficiency, decarbonisation and environmental initiatives.\n\nThe Company is striving to make progress in decarbonising its business model. Acerinox is working to reduce the amount of CO<sup>2</sup> released into the atmosphere and other polluting gases associated with the iron and steel process to achieve a significant improvement in air quality and reduce the impact on human health and neighbouring ecosystems. To achieve these goals, the Group has short- and medium-term initiatives divided into the following key focus areas:\n\n{54}------------------------------------------------\n\nImage /page/54/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is in a dark blue color. The text is positioned inside a dark blue circle that is open at the top.\n\n#### **4.6 Insurance**\n\nThe geographical diversification of the Group's factories (with three integrated stainless-steel flat product manufacturing plants, one cold-rolling plant and three long product manufacturing plants) ensures that an accident would not affect more than one third of total stainless-steel production. This guarantees business continuity, while adequate coordination between the other factories mitigates the consequences of material damage to any of the facilities. The high-performance alloys division also has seven manufacturing plants, five in Germany and two in the United States, which also helps to reduce the consequences of an incident at one of them.\n\nSufficient coverage has been arranged for the Group's factories through material damage and loss-of-profit insurance policies, which account for over 66.67% of the Acerinox Group's insurance expenditure. Also, all assets under construction are covered by the insurance policies taken out by the respective suppliers as well as the global building and assembly policy.\n\nThe Group's adequate coverage of damages and loss of profit has enabled it to record an income in 2023 as a result of the incident at the Group's North American factory in 2022.\n\nThe Acerinox Group has also arranged general third-party liability, environmental, credit, transport, cyber-risks and group life and accident insurance policies to reduce its exposure to these various risks.\n\nThe Group also has a reinsurance company based in Luxembourg (Inox Re), which manages these risks by assuming a portion as self-insurance and accessing the reinsurance market directly.\n\n#### <span id=\"page-54-0\"></span>**NOTE 5 – SCOPE OF CONSOLIDATION**\n\n#### **5.1 Business combinations**\n\nThere were no business combinations in 2022 or 2023.\n\n#### **5.2 Changes in the scope of consolidation**\n\nThere were no changes in the Group's scope of consolidation in either 2022 or 2023.\n\nThe Group is making the final arrangements for the liquidation of the trading company in Russia. The subsidiary currently has no activities and no employees. The share capital contributed by Acerinox, S.A. amounts to EUR 101 thousand. During the year, EUR 202 thousand were repatriated from this company to the parent company. The Group expects to complete all formalities before the first quarter of 2024.\n\n#### **5.3 Subsidiaries and associates**\n\n#### **Subsidiaries**\n\nAt 31 December 2023 and 2022, in addition to Acerinox, S.A., the scope of consolidation of the Acerinox Group included 55 fully consolidated subsidiaries.\n\nThe detail of investments in associates in 2023 is as follows:\n\n| 2023                                                                     |                                 |                                     |                       |                                                                              |                                                       |\n|--------------------------------------------------------------------------|---------------------------------|-------------------------------------|-----------------------|------------------------------------------------------------------------------|-------------------------------------------------------|\n| OWNERSHIP                                                                |                                 |                                     |                       |                                                                              |                                                       |\n| FULLY CONSOLIDATED COMPANIES                                             | COUNTRY                         | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n| ACERINOX (SCHWEIZ) A.G.                                                  | Mellingen - Switzerland         | 327                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX ARGENTINA S.A.                                                  | Buenos Aires - Argentina        | 598                                 | 90%                   | ACERINOX, S.A.                                                               | Estudio Canil                                         |\n|                                                                          |                                 | 13                                  | 10%                   | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| ACERINOX AUSTRALASIA PTY. LTD.                                           | Sidney - Australia              | 385                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX BENELUX S.A. - N.V.                                             | Brussels - Belgium              | 209                                 | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                 | 0                                   | 0.02%                 | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| FULLY CONSOLIDATED COMPANIES                                             | COUNTRY                         | COST (in thousands of euros)*       | % NOMINAL VALUE       | HOLDER OF OWNERSHIP INTEREST                                                 | AUDITORS                                              |\n| ACX DO BRASIL REPRESENTAÇOES, LTDA.                                      | São Paulo - Brazil              | 373                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX CHILE, S.A.                                                     | Santiago de Chile - Chile       | 7,545                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX COLOMBIA S.A.S.                                                 | Bogotá D.C. - Colombia          | 68                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX DEUTSCHLAND GMBH                                                | Langenfeld - Germany            | 45,496                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX EUROPA, S.A.U.                                                  | Algeciras - Spain               | 274,234                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX FRANCE S.A.S                                                    | Paris - France                  | 18,060                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                 | 0                                   | 0.02%                 | INOXIDABLES DE EUSKADI S.A.U.                                                |                                                       |\n| ACERINOX INDIA PVT LTD.                                                  | Mumbai - India                  | 155                                 | 100%                  | ACERINOX, S.A.                                                               | ISK & Associates                                      |\n| ACERINOX ITALIA S.R.L.                                                   | Milan - Italy                   | 78,844                              | 100%                  | ACERINOX, S.A.                                                               | Collegio Sindicale -<br>Studio Revisori<br>Associatti |\n| ACERINOX METAL SANAYII VE TICARET L.S.                                   | Gümüşsuyu / Beyoğlu -<br>Turkey | 150                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX MIDDLE EAST DMCC (DUBAI)                                        | Dubai - United Arab<br>Emirates | 10                                  | 100%                  | ACERINOX, S.A.                                                               | HLB Hamt                                              |\n| ACERINOX PACIFIC LTD.                                                    | Wan Chai - Hong Kong            | 7,467                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX POLSKA, SP. ZO.O.                                               | Warsaw - Poland                 | 25,174                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                 | 4                                   | 0.02%                 | INOXIDABLES DE EUSKADI S.A.U.                                                |                                                       |\n| ACERINOX RUSSIA LLC                                                      | Saint Petersburg - Russia       | 100                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX SCANDINAVIA AB                                                  | Malmö - Sweden                  | 31,909                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX S.C. MALAYSIA SDN. BHD                                          | Johor - Malaysia                | 19,476                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX SHANGAI CO., LTD.                                               | Shanghai - China                | 1,620                               | 100%                  | ACERINOX, S.A.                                                               | Shanghai Shenzhou<br>Dalong                           |\n| ACERINOX (SEA), PTE LTD.                                                 | Singapore - Singapore           | 193                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX U.K, LTD.                                                       | Birmingham - United<br>Kingdom  | 28,504                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACEROL - COMÉRCIO E INDÚSTRIA DE AÇOS<br>INOXIDÁVEIS, UNIPESSOAL, LDA.   | Trofa - Portugal                | 15,828                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| BAHRU STAINLESS, SDN. BHD                                                | Johor - Malaysia                | 0                                   | 99%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| COLUMBUS STAINLESS (PTY) LTD.                                            | Middelburg - South Africa       | 241,470                             | 76%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| CORPORACIÓN ACERINOX PERU S.A.C.                                         | Lima - Peru                     | 314                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| INOX RE, S.A.                                                            | Luxembourg                      | 1,225                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXCENTER CANARIAS, S.A.U.                                              | Telde (Gran Canaria) -<br>Spain | 270                                 | 100%                  | INOXCENTER                                                                   | PWC                                                   |\n| INOXCENTER, S.L.U.                                                       | Barcelona - Spain               | 17,758                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXFIL, S.A.                                                            | Igualada (Barcelona) - Spain    | 6,247                               | 100%                  | ROLDAN, S.A.                                                                 | PWC                                                   |\n| INOXIDABLES DE EUSKADI S.A.U.                                            | Vitoria - Spain                 | 2,705                               | 100%                  | ACERINOX EUROPA,<br>S.A.U.                                                   | PWC                                                   |\n| INOXPLATE - COMÉRCIO DE PRODUCTOS DE AÇO<br>INOXIDÁVEL, UNIPESSOAL, LDA. | Trofa - Portugal                | 9,693                               | 100%                  | ACEROL - COMÉRCIO<br>E INDÚSTRIA DE<br>AÇOS INOXIDÁVEIS,<br>UNIPESSOAL, LDA. |                                                       |\n| METALINOX BILBAO, S.A.U.                                                 | Galdácano (Vizcaya) - Spain     | 3,718                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS INC.                                            | Kentucky - USA                  | 546,271                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS CANADA, INC                                     | Canada                          | 5,091                               | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS MEXICO S.A. DE<br>C.V.                          | Apodaca - N.L.Mexico            | 18,948                              | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS FINANCIAL<br>INVESTMENTS LTD.                   | Kentucky - USA                  | 15                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ROLDAN, S.A.                                                             | Ponferrada - Spain              | 17,405                              | 99.77%                | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS HOLDING GMBH                                                  | Werdohl - Germany               | 313,315                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS INTERNATIONAL GMBH.                                           | Werdohl - Germany               | 51,404                              | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM METALS GMBH                                                          | Werdohl - Germany               | 107,086                             | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM (SHANGHAI) HIGH PERFORMANCE METALS<br>TRAD. CO. LTD.                 | Shanghai - China                | 200                                 | 100%                  | VDM METALS, GMBH.                                                            | Pan-China Certified<br>Public Accounts                |\n| VDM HIGH PERFORMANCE METALS NANTONG<br>CO. LTD.                          | Nantong - China                 | 2,087                               | 100%                  | VDM METALS<br>INTERNATIONAL<br>GMBH.                                         | Pan-China Certified<br>Public Accounts                |\n| VDM METALS AUSTRALIA PTY. LTD.                                           | Mulgrave - Australia            | 1,322                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS AUSTRIA G.M.B.H.                                              | Brunn am Gebirge - Austria      | 4,515                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS BENELUX B.V.                                                  | Zwijndrecht - Belgium           | 2,535                               | 100%                  | VDM METALS, GMBH.                                                            | BDO                                                   |\n| VDM METALS CANADA LTD.                                                   | Vaughan - Canada                | 336                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS DE MEXICO S.A. DE C.V.                                        | Naucalpan de Juarez -<br>Mexico | 30                                  | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS FRANCE S.A.S.                                                 | Saint-Priest - France           | 8,465                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM UNTERSTÜTZUNGSKASSE GMBH                                             | Werdohl - Germany               | 0                                   | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS ITALIA S.R.L.                                                 | Sesto San Giovanni - Italy      | 10,704                              | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS JAPAN K.K.                                                    | Tokyo - Japan                   | 178                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| FULLY CONSOLIDATED COMPANIES                                             | COUNTRY                         | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n| VDM METALS KOREA CO. LTD.                                                | Seoul - Korea                   | 103                                 | 100%                  | VDM METALS, GMBH.                                                            | Samdo                                                 |\n| VDM METALS UK LTD.                                                       | Claygate-Esher - UK             | 100                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS USA LLC                                                       | Florham Park - USA              | 27,649                              | 100%                  | VDM METALS, GMBH.                                                            | PWC                                                   |\n\n{55}------------------------------------------------\n\nImage /page/55/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The word is positioned inside a blue circle. The circle is not fully closed, with a small gap at the top.\n\n{56}------------------------------------------------\n\nImage /page/56/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark color. The word is positioned inside a blue circle that is open on the left side.\n\n*(\\*) Amounts are shown net of impairments*\n\nThe activities of the Group companies are as follows:\n\n- Acerinox, S.A.: is the parent company of the Acerinox Group and holds directly or indirectly the shares of the companies comprising the Group. As the parent company of the Group, it assumes the highest level of management and control over the Group's business operations, corporate functions, and overall coordination with other entities. It approves and supervises the strategic business areas. It is responsible for establishing, designing and developing the Group's policies and financial strategy, designing investment and environmental policies, defining the R&D strategy, supervising the management services provided to subsidiaries and developing corporate governance policies. It also provides a range of corporate services, including legal, accounting and advisory services to all Group companies.\n- Acerinox Europa, S.A.U.: manufacture and marketing of flat stainless-steel products.\n- North American Stainless, Inc.: manufacture and marketing of flat and long stainless-steel products.\n- Columbus Stainless (Pty) Ltd.: manufacture and commercialisation of flat stainless-steel products and carbon steel.\n- Bahru Stainless, Sdn. Bhd.: cold rolling and marketing of flat stainless-steel products.\n- Roldan, S.A.: manufacture and marketing of long stainless-steel products.\n- Inoxfil, S.A.: manufacture and marketing of stainless-steel wire.\n- VDM Holding Metals GmbH: is the holding company of the group of companies comprising the High Performance Alloys business unit.\n- VDM Metals International GmbH, a company wholly owned by VDM Holding Metals GmbH, procures the raw materials required for the production of the High Performance Alloys, markets the finished products and centralises the VDM Group's research and development by directly managing and administering the business and outsourcing production to another entity from the subgroup. The company also has a quality assurance department.\n- VDM Metals GmbH, the owner of the production facilities, processes raw materials into high-performance alloys on behalf of VDM Metals GmbH.\n- Inox Re, S.A.: reinsurance company.\n- Inoxplate, Comercio de productos de Aço Inoxidávei, Unipessoal Lda: owner of the industrial building in which the Group company in Portugal -Acerol, Comércio e indústria de Aços inoxidáveis- carries out its operating activities, for the lease of which it receives income.\n- North American Stainless Financial Investment, Inc.: provision of foreign trade advisory services.\n- The rest of the companies, which are direct or indirect investees of Acerinox, S.A., as well as the VDM subgroup entities, engage in the marketing of stainless-steel products or high-performance alloys.\n\nThe detail of investments in associates in 2022 is as follows:\n\n| FULLY CONSOLIDATED<br>COMPANIES                                          | COUNTRY                                             | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n|--------------------------------------------------------------------------|-----------------------------------------------------|-------------------------------------|-----------------------|------------------------------------------------------------------------------|-------------------------------------------------------|\n| ACERINOX (SCHWEIZ) A.G.                                                  | Mellingen - Switzerland<br>Buenos Aires - Argentina | 327<br>598                          | 100%<br>90%           | ACERINOX, S.A.<br>ACERINOX, S.A.                                             | PWC<br>Estudio Canil                                  |\n| ACERINOX ARGENTINA S.A.                                                  | Buenos Aires - Argentina                            | 13                                  | 10%                   | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| ACERINOX AUSTRALASIA PTY. LTD.                                           | Sidney - Australia                                  | 385                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX BENELUX S.A. - N.V.                                             | Brussels - Belgium                                  | 209<br>0                            | 99.98%<br>0.02%       | ACERINOX, S.A.<br>INOXIDABLES DE<br>EUSKADI S.A.U.                           | PWC                                                   |\n| ACX DO BRASIL REPRESENTAÇOES, LTDA.                                      | São Paulo - Brazil                                  | 373<br>0                            | 100%<br>0%            | ACERINOX, S.A.<br>INOXIDABLES DE<br>EUSKADI S.A.U.                           |                                                       |\n| ACERINOX CHILE, S.A.                                                     | Santiago de Chile - Chile                           | 7,545                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX COLOMBIA S.A.S.                                                 | Bogotá D.C. - Colombia                              | 68                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX DEUTSCHLAND GMBH                                                | Langenfeld - Germany                                | 45,496                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX EUROPA, S.A.U.                                                  | Algeciras - Spain                                   | 341,437                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| 2022                                                                     |                                                     |                                     |                       |                                                                              |                                                       |\n| FULLY CONSOLIDATED<br>COMPANIES                                          | COUNTRY                                             | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n| ACERINOX FRANCE S.A.S                                                    | Paris - France                                      | 18,060                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX INDIA PVT LTD.                                                  | Mumbai - India                                      | 155                                 | 100%                  | ACERINOX, S.A.                                                               | ISK & Associates                                      |\n| ACERINOX ITALIA S.R.L.                                                   | Milan - Italy                                       | 78,844                              | 100%                  | ACERINOX, S.A.                                                               | Collegio Sindicale -<br>Studio Revisori<br>Associatti |\n| ACERINOX METAL SANAYII VE TICARET L.S.                                   | Gümüşsuyu / Beyoğlu -<br>Turkey                     | 150                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n|                                                                          |                                                     | 10                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX PACIFIC LTD.                                                    | Wan Chai - Hong Kong                                | 7,467                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX POLSKA, SP. ZO.O.                                               | Warsaw - Poland                                     | 25,174                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                                     | 4                                   | 0.02%                 | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| ACERINOX RUSSIA LLC                                                      | Saint Petersburg - Russia                           | 100                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX SCANDINAVIA AB                                                  | Malmö - Sweden                                      | 31,909                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX S.C. MALAYSIA SDN. BHD                                          | Johor - Malaysia                                    | 19,476                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX SHANGAI CO., LTD.                                               | Shanghai - China                                    | 1,620                               | 100%                  | ACERINOX, S.A.                                                               | Shanghai Shenzhou<br>Dalong                           |\n| ACERINOX (SEA), PTE LTD.                                                 | Singapore - Singapore                               | 193                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX U.K, LTD.                                                       | Birmingham - United<br>Kingdom                      | 28,494                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACEROL - COMÉRCIO E INDÚSTRIA DE AÇOS<br>INOXIDÁVEIS, UNIPESSOAL, LDA.   | Trofa - Portugal                                    | 15,828                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| BAHRU STAINLESS, SDN. BHD                                                | Johor - Malaysia                                    | 96,480                              | 99%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| COLUMBUS STAINLESS (PTY) LTD.                                            | Middelburg - South Africa                           | 263,558                             | 76%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| CORPORACIÓN ACERINOX PERU S.A.C.                                         | Lima - Peru                                         | 314                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| INOX RE, S.A.                                                            | Luxembourg                                          | 1,225                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXCENTER CANARIAS, S.A.U.                                              | Telde (Gran Canaria) -<br>Spain                     | 270                                 | 100%                  | INOXCENTER                                                                   | PWC                                                   |\n| INOXCENTER, S.L.U.                                                       | Barcelona - Spain                                   | 17,758                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXFIL, S.A.                                                            | Igualada (Barcelona) - Spain                        | 6,247                               | 100%                  | ROLDAN, S.A.                                                                 | PWC                                                   |\n| INOXIDABLES DE EUSKADI S.A.U.                                            | Vitoria - Spain                                     | 2,705                               | 100%                  | ACERINOX EUROPA,<br>S.A.U.                                                   | PWC                                                   |\n| INOXPLATE - COMÉRCIO DE PRODUCTOS DE AÇO<br>INOXIDÁVEL, UNIPESSOAL, LDA. | Trofa - Portugal                                    | 10,193                              | 100%                  | ACEROL - COMÉRCIO<br>E INDÚSTRIA DE<br>AÇOS INOXIDÁVEIS,<br>UNIPESSOAL, LDA. |                                                       |\n| METALINOX BILBAO, S.A.U.                                                 | Galdácano (Vizcaya) - Spain                         | 3,718                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS INC.                                            | Kentucky - USA                                      | 546,042                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS CANADA, INC                                     | Canada                                              | 5,091                               | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS MEXICO S.A. DE<br>C.V.                          | Apodaca - N.L.Mexico                                | 18,948                              | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS FINANCIAL<br>INVESTMENTS LTD.                   | Kentucky - USA                                      | 15                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ROLDAN, S.A.                                                             | Ponferrada - Spain                                  | 17,405                              | 99.77%                | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS HOLDING GMBH                                                  | Werdohl - Germany                                   | 313,315                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS INTERNATIONAL GMBH.                                           | Werdohl - Germany                                   | 51,404                              | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM METALS GMBH                                                          | Werdohl - Germany                                   | 102,037                             | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM (SHANGHAI) HIGH PERFORMANCE METALS<br>TRAD. CO. LTD.                 | Shanghai - China                                    | 200                                 | 100%                  | VDM METALS, GMBH.                                                            | Pan-China Certified<br>Public Accounts                |\n| VDM HIGH PERFORMANCE METALS NANTONG<br>CO. LTD.                          | Nantong - China                                     | 2,087                               | 100%                  | VDM METALS<br>INTERNATIONAL<br>GMBH.                                         | Pan-China Certified<br>Public Accounts                |\n| VDM METALS AUSTRALIA PTY. LTD.                                           | Mulgrave - Australia                                | 1,322                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS AUSTRIA G.M.B.H.                                              | Brunn am Gebirge - Austria                          | 4,515                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS BENELUX B.V.                                                  | Zwijndrecht - Belgium                               | 2,535                               | 100%                  | VDM METALS, GMBH.                                                            | BDO                                                   |\n| VDM METALS CANADA LTD.                                                   | Vaughan - Canada                                    | 336                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS DE MEXICO S.A. DE C.V.                                        | Naucalpan de Juarez -<br>Mexico                     | 30                                  | 100%                  | VDM METALS, GMBH.                                                            | Grant Thornton                                        |\n| VDM METALS FRANCE S.A.S.                                                 | Saint-Priest - France                               | 8,465                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM UNTERSTÜTZUNGSKASSE GMBH                                             | Werdohl - Germany                                   | 0                                   | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS ITALIA S.R.L.                                                 | Sesto San Giovanni - Italy                          | 10,704                              | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS JAPAN K.K.                                                    | Tokyo - Japan                                       | 178                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS KOREA CO. LTD.                                                | Seoul - Korea                                       | 103                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS UK LTD.                                                       | Claygate-Esher - UK                                 | 100                                 | 100%                  | VDM METALS, GMBH.                                                            | BDO                                                   |\n| VDM METALS USA LLC                                                       | Florham Park - USA                                  | 27,649                              | 100%                  | VDM METALS, GMBH.                                                            | PWC                                                   |\n\n**2022**\n\n{57}------------------------------------------------\n\nImage /page/57/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the top right.\n\n#### **2022**\n\n{58}------------------------------------------------\n\nImage /page/58/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters slightly blurred. The word is positioned inside a blue circle that is open on the left side. The circle is thicker at the top and bottom and thinner on the sides.\n\n|                                 | 2022      |                                     |                       |                                    |          |\n|---------------------------------|-----------|-------------------------------------|-----------------------|------------------------------------|----------|\n|                                 | OWNERSHIP |                                     |                       |                                    |          |\n| FULLY CONSOLIDATED<br>COMPANIES | COUNTRY   | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST | AUDITORS |\n|                                 |           |                                     |                       |                                    |          |\n\n*(\\*) Amounts are shown net of impairments*\n\n#### **Associates**\n\nThe detail of investments in associates in 2023 and 2022 is as follows:\n\n| ASSOCIATES                                    | COUNTR<br>Y | COST (in thousands<br>of euros) | % NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST |\n|-----------------------------------------------|-------------|---------------------------------|--------------------|------------------------------------|\n| BETINOKS PASLANMAZ ÇELIK A.S.                 | Turkey      | 0                               | 25%                | ACERINOX, S.A.                     |\n| MOL Katalysatortechnik GmbH                   | Germany     | 16                              | 20.45%             | VDM METALS, GMBH.                  |\n| Evidal Schmöle Verwaltungsgesellschaft<br>mbH | Germany     | 15                              | 50%                | VDM METALS, GMBH.                  |\n\nThe associates are entities which are scantly material for the Group, the ownership interests in which are measured at cost, as the Group is not involved in their management and therefore, does not have their financial statements. The entity Betinoks Paslanmaz Celik, A.S., based in Turkey, is in the process of liquidation. MOL Katalysatortechnik, GmbH, based in Germany, engages in the production and distribution of mineral and metal catalysts. On the other hand, Evidal Schmöle Verwaltungsgesellschaft GmbH manages the pension funds of one of the former manufacturing companies.\n\n#### **5.4 Capital increases and reductions**\n\nIn 2023, as in 2022, the Group company Inoxplate, Lda, based in Portugal and wholly owned by the Portuguese company Acerol, Ltda, made a repayment of additional contributions to its parent company in the amount of EUR 500 thousand (2022: EUR 500 thousand).\n\n#### **5.5 Impairment losses on investments**\n\nAt the end of each reporting period, the parent company performs impairment tests on those investments in Group companies for which there are indications of possible impairment, in order to verify whether the valuations of the respective companies exceed their recoverable amount.\n\nFollowing the tests carried out during the year, as explained in Note 8.1, it was necessary to recognise impairment of the portfolio investment in Bahru Stainless Sdn. Bhd for EUR 96,553 thousand, in Columbus for EUR 22,200 thousand and in Acerinox Europa for EUR 67,245 thousand.\n\nAlso, in 2022, the Group recorded an impairment of the investment in Bahru Stainless Sdn. Bhd in the amount of EUR 197,197 thousand. On the other hand, there has been a reversal of the impairment recorded in previous years in the company Columbus Stainless Pty. Ltd. in the amount of EUR 58,291 thousand, as the recoverable value of the investment was higher than the impairment recorded at year-end.\n\nThese impairments or reversals do not have an impact on consolidated profit or loss as these companies are fully consolidated. A detailed breakdown of the analyses conducted is included in the notes to the parent's separate financial statements.\n\n{59}------------------------------------------------\n\nImage /page/59/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is enclosed within a blue circle.\n\n#### <span id=\"page-59-0\"></span>**NOTE 6 – SEGMENT REPORTING**\n\nThe Group is organised internally by operating segments, the strategic business units, which are made up of different products and services that are managed separately, so that Group management reviews internal reports for each of these segments at least monthly.\n\nThe operating segments presented by the Group, associated with the types of products it sells, are as follows:\n\n- Stainless steel: includes both flat and long stainless-steel products.\n- High-performance alloys: special alloys with high nickel content. This segment includes all the companies in the VDM Metals subgroup.\n\nSegment results, assets and liabilities include all items directly or indirectly attributable to a segment. There are no significant assets used jointly.\n\nThe \"unallocated\" segment includes the activities of the holding company that cannot be allocated to any of the specific operating segments. As described in **Note 1**, the main activity of the holding company, the parent company of the Acerinox Group, is to approve and oversee the strategic businesses. It also provides a range of corporate and advisory services in various areas and manages and administers the Group's financing, which is centralised through Acerinox, S.A.\n\nThe result of the \"unallocated\" segment reflects hardly any revenues as these, in the parent company, are always with Group companies and have therefore been eliminated in the consolidation process. The financial costs of this segment are the highest, due to the centralisation of financing mentioned above.\n\nRevenue and all items reflected in the statement of profit or loss by segment are presented on a consolidated basis, i.e. after eliminating income and expenses from Group companies, except for sales between segments, which are reflected separately.\n\nInter-segment transfers and transactions are performed on an arm's length basis, under commercial terms and conditions that would be available for unrelated third parties.\n\nA segment's performance is measured on the basis of its gross profit from operations and net profit before tax. The Group considers that this information is the most relevant when assessing the performance of the segment in relation to other comparables in the industry.\n\n{60}------------------------------------------------\n\n#### **6.1 Operational segments**\n\nSegment results for the year ended 31 December 2023 are as follows:\n\n(Amounts in thousands of euros)\n\n|                                                             | 2023               |                               |             |             |                   |  |\n|-------------------------------------------------------------|--------------------|-------------------------------|-------------|-------------|-------------------|--|\n|                                                             | Stainless<br>steel | High<br>performance<br>alloys | Unallocated | Adjustments | Total             |  |\n| Statement of profit or loss                                 |                    |                               |             |             |                   |  |\n| Revenue                                                     | 5,279,638          | 1,445,669                     | 2,031       |             | -19,337 6,708,001 |  |\n| Inter-segment sales                                         | -18,589            | -748                          |             | 19,337      | 0                 |  |\n| Total revenue                                               | 5,261,049          | 1,444,921                     | 2,031       |             | 0 6,708,001       |  |\n| Gross profit from operations                                | 569,900            | 174,797                       | -43,207     |             | 701,490           |  |\n| Depreciation and amortisation charge                        | -137,565           | -32,796                       | -769        |             | -171,130          |  |\n| Impairment losses                                           | -156,207           |                               |             |             | -156,207          |  |\n| Finance income                                              | 78,359             | 1,027                         | 260         |             | 79,646            |  |\n| Finance costs                                               | -39,296            | -29,947                       | -31,801     |             | -101,044          |  |\n| Exchange differences                                        | 3,433              | -1,211                        | 368         |             | 2,590             |  |\n| Impairment and loss on disposal of financial<br>instruments |                    |                               |             |             | 0                 |  |\n| Profit (loss) before tax                                    | 318,624            | 111,870                       | -75,149     | 0           | 355,345           |  |\n| Income tax                                                  | -94,369            | -38,786                       | -5,223      |             | -138,378          |  |\n| Consolidated profit (loss) for the year                     | 224,255            | 73,084                        | -80,372     | 0           | 216,967           |  |\n| Attributable to:                                            |                    |                               |             |             |                   |  |\n| Non-controlling interests                                   | -11,161            |                               |             |             | -11,161           |  |\n| Net profit (loss) attributable to the Group                 | 235,416            | 73,084                        | -80,372     | 0           | 228,128           |  |\n| Statement of financial position                             |                    |                               |             |             |                   |  |\n| Segment assets                                              | 4,848,248          | 1,170,936                     | 79,195      |             | 6,098,379         |  |\n| Investments accounted for using the equity<br>method        |                    | 390                           |             |             | 390               |  |\n| Property, plant and equipment                               | 1,220,955          | 250,176                       | 10,436      |             | 1,481,567         |  |\n| Total consolidated assets                                   | 4,848,248          | 1,171,326                     | 79,195      |             | 0 6,098,769       |  |\n| Segment liabilities                                         | 1,355,914          | 746,503                       | 1,533,226   |             | 3,635,643         |  |\n| Unallocated liabilities                                     |                    |                               |             |             |                   |  |\n| Total consolidated liabilities (excluding<br>equity)        | 1,355,914          | 746,503                       | 1,533,226   |             | 0 3,635,643       |  |\n| Property, plant and equipment                               | 1,220,955          | 250,176                       | 10,436      |             | 0 1,481,567       |  |\n| Investments in non-current assets                           | 146,286            | 27,233                        | 1,266       | 0           | 174,785           |  |\n\nUnallocated liabilities essentially comprise the financial debt, which is mainly centralised in the parent company.\n\n{61}------------------------------------------------\n\nImage /page/61/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue, semi-circular shape that resembles a crescent moon or a partial ring. The text is aligned horizontally, with the letters closely spaced. The blue color of the text matches the color of the semi-circular shape.\n\n#### The data for 2022 are as follows:\n\n(Amounts in thousands of euros)\n\n|                                                             | 2022            |                            |             |             |           |\n|-------------------------------------------------------------|-----------------|----------------------------|-------------|-------------|-----------|\n|                                                             | Stainless steel | High-performance<br>alloys | Unallocated | Adjustments | Total     |\n| Statement of profit or loss                                 |                 |                            |             |             |           |\n| Revenue                                                     | 7,477,172       | 1,280,405                  | 2,853       | -3,540      | 8,756,890 |\n| Inter-segment sales                                         | -2,508          | -1,032                     |             | 3,540       |           |\n| Total revenue                                               | 7,474,664       | 1,279,373                  | 2,853       | 0           | 8,756,890 |\n| Gross profit from operations                                | 1,181,185       | 124,897                    | -33,473     |             | 1,272,609 |\n| Depreciation and amortisation charge                        | -160,406        | -31,832                    | -697        |             | -192,935  |\n| Impairment losses                                           | -203,905        |                            |             |             | -203,905  |\n| Finance income                                              | 24,035          | 490                        | 1,548       |             | 26,073    |\n| Finance costs                                               | -20,225         | -16,395                    | -26,179     |             | -62,799   |\n| Exchange differences                                        | 1,214           | -10,856                    | 1,877       |             | -7,765    |\n| Impairment and loss on disposal of financial<br>instruments | -3              |                            |             |             | -3        |\n| Profit (loss) before tax                                    | 821,895         | 66,304                     | -56,924     | 0           | 831,275   |\n| Income tax                                                  | -231,816        | -23,343                    | -5,730      |             | -260,889  |\n| Consolidated profit (loss) for the year                     | 590,079         | 42,961                     | -62,654     | 0           | 570,386   |\n|                                                             |                 |                            |             |             |           |\n| Attributable to:                                            |                 |                            |             |             |           |\n| Non-controlling interests                                   | 14,332          |                            |             |             | 14,332    |\n| Net profit (loss) attributable to the Group                 | 575,747         | 42,961                     | -62,654     | 0           | 556,054   |\n|                                                             |                 |                            |             |             |           |\n| Statement of financial position                             |                 |                            |             |             |           |\n| Segment assets                                              | 5,060,337       | 1,212,402                  | 45,019      |             | 6,317,758 |\n| Investments accounted for using the equity<br>method        |                 | 390                        |             |             | 390       |\n| Property, plant and equipment                               | 1,398,853       | 250,354                    | 10,316      |             | 1,659,523 |\n| Total consolidated assets                                   | 5,060,337       | 1,212,792                  | 45,019      | 0           | 6,318,148 |\n| Segment liabilities                                         | 1,351,880       | 834,510                    | 1,584,064   |             | 3,770,454 |\n| Unallocated liabilities                                     |                 |                            |             |             |           |\n| Total consolidated liabilities (excluding<br>equity)        | 1,351,880       | 834,510                    | 1,584,064   | 0           | 3,770,454 |\n| Property, plant and equipment                               | 1,398,853       | 250,354                    | 10,316      | 0           | 1,659,523 |\n| Investments in non-current assets                           | 124,787         | 27,811                     | 1,294       | 0           | 153,892   |\n\nThere are no significant items that have not been reflected in cash flows other than depreciation and amortisation and impairment.\n\n#### **6.2 Geographical segments**\n\nRevenue from geographical segments is presented on the basis of customer location. Segment assets are determined by the geographical location of those assets.\n\n{62}------------------------------------------------\n\nImage /page/62/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape around the word. The word \"ACERINOX\" is in a darker shade of blue, contrasting with the lighter blue of the surrounding circle.\n\nThe data relating to geographical segments in 2023 is presented below:\n\n(Amounts in thousands of euros)\n\n|                                      | 2023      |                   |           |         |         |        |           |\n|--------------------------------------|-----------|-------------------|-----------|---------|---------|--------|-----------|\n|                                      | Spain     | Rest of<br>Europe | America   | Africa  | Asia    | Other  | Total     |\n| Revenue by destination of<br>goods   | 468,042   | 2,137,497         | 3,116,822 | 336,514 | 527,314 | 21,789 | 6,607,978 |\n| Segment assets                       | 1,267,746 | 1,364,909         | 2,857,679 | 408,691 | 195,061 | 4,683  | 6,098,769 |\n| Property, plant and<br>equipment     | 453,856   | 260,455           | 590,279   | 117,460 | 49,796  | 53     | 1,471,899 |\n| Investment property                  | 157       | 9,511             |           |         |         |        | 9,668     |\n| Investments in non-current<br>assets | 49,512    | 25,238            | 76,639    | 21,207  | 2,190   |        | 174,785   |\n\nThe data for 2022 are as follows:\n\n(Amounts in thousands of euros)\n\n|                                   | 2022      |                |           |         |         |        |           |\n|-----------------------------------|-----------|----------------|-----------|---------|---------|--------|-----------|\n|                                   | Spain     | Rest of Europe | America   | Africa  | Asia    | Other  | Total     |\n| Revenue by destination of goods   | 628,790   | 2,588,756      | 4,349,712 | 424,259 | 675,893 | 21,084 | 8,688,494 |\n| Segment assets                    | 1,330,745 | 1,449,493      | 2,620,365 | 521,631 | 389,051 | 6,862  | 6,318,147 |\n| Property, plant and equipment     | 445,281   | 262,279        | 608,608   | 122,403 | 210,968 | 68     | 1,649,607 |\n| Investment property               | 161       | 9,755          |           |         |         |        | 9,916     |\n| Investments in non-current assets | 59,410    | 27,259         | 44,944    | 19,824  | 2,456   |        | 153,892   |\n\nThe Group sells its products in about 80 countries across the five continents. The Group's sales in each of the following countries exceeded 5% of total consolidated sales in 2023 and 2022: United States 40.47% (2022: 43.29%), Germany 13.85% (2022: 10.29%) and Spain 7.08% (2022: 7.24%). These sales also include the sales of the high-performance alloys segment.\n\nNo single transaction with an external customer exceeded 10% of the Consolidated Group's total revenue for 2023 or 2022.\n\n#### <span id=\"page-62-0\"></span>**NOTE 7 – INTANGIBLE ASSETS**\n\nThe detail of the main classes of intangible assets and of the changes therein is as follows:\n\n{63}------------------------------------------------\n\nImage /page/63/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is in a lighter color, possibly white or a very light shade of blue, which contrasts with the darker blue of the circle.\n\n(Amounts in thousands of euros)\n\n| (Amounts in thousands of euros)                                |                         |                        |                                        |                       |          |          |\n|----------------------------------------------------------------|-------------------------|------------------------|----------------------------------------|-----------------------|----------|----------|\n| COST                                                           | Development<br>expenses | Industrial<br>property | Computer<br>applications<br>and others | Customer<br>portfolio | SUBTOTAL | Goodwill |\n| Balance as of 1 January 2022                                   | 17,146                  | 32,120                 | 53,844                                 | 29,200                | 132,310  | 118,953  |\n| Procurements                                                   | 1,454                   | 124                    | 1,159                                  |                       | 2,737    |          |\n| Disposals                                                      |                         | -38                    | -729                                   |                       | -767     |          |\n| Translation differences                                        |                         |                        | 153                                    |                       | 153      |          |\n| Balance as of 31 December 2022                                 | 18,600                  | 32,206                 | 54,427                                 | 29,200                | 134,433  | 118,953  |\n| Procurements                                                   | 1,030                   | 72                     | 2,010                                  |                       | 3,112    |          |\n| Transfers                                                      |                         |                        | 36                                     |                       | 36       |          |\n| Disposals                                                      |                         | -13                    | -216                                   |                       | -229     |          |\n| Translation differences                                        |                         |                        | -340                                   |                       | -340     |          |\n| Balance as of 31 December 2023                                 | 19,630                  | 32,265                 | 55,917                                 | 29,200                | 137,012  | 118,953  |\n| ACCUMULATED<br>AMORTISATION AND<br>IMPAIRMENT LOSS             | Development<br>expenses | Industrial<br>property | Computer<br>applications<br>and others | Customer<br>portfolio | SUBTOTAL | Goodwill |\n| Balance as of 1 January 2022                                   | 8,643                   | 25,959                 | 47,561                                 | 3,569                 | 85,732   | -67,889  |\n| Allocation                                                     | 1,144                   | 529                    | 2,276                                  | 1,947                 | 5,896    |          |\n| Disposals                                                      |                         | -31                    | -707                                   |                       | -738     |          |\n| Translation differences                                        |                         |                        | 106                                    |                       | 106      |          |\n| Balance as of 31 December 2022                                 | 9,787                   | 26,457                 | 49,236                                 | 5,516                 | 90,996   | -67,889  |\n| Allocation                                                     | 606                     | 539                    | 2,064                                  | 1,947                 | 5,156    |          |\n| Allowance for impairment losses                                |                         |                        | 28                                     |                       | 28       |          |\n| Disposals                                                      |                         | -19                    | -215                                   |                       | -234     |          |\n| Translation differences                                        |                         |                        | -273                                   |                       | -273     |          |\n| Balance as of 31 December 2023                                 | 10,393                  | 26,977                 | 50,840                                 | 7,463                 | 95,673   | -67,889  |\n| NET VALUE                                                      | Development<br>expenses | Industrial<br>property | Computer<br>applications<br>and others | Customer<br>portfolio | SUBTOTAL | Goodwill |\n| Cost as of 31 December 2021                                    | 17,146                  | 32,120                 | 53,844                                 | 29,200                | 132,310  | 118,953  |\n| Accumulated amortisation and<br>impairment losses              | -8,643                  | -25,959                | -47,561                                | -3,569                | -85,732  | -67,889  |\n| Carrying amount as of 31 December<br>2021                      | 8,503                   | 6,161                  | 6,283                                  | 25,631                | 46,578   | 51,064   |\n| Cost as of 31 December 2022                                    | 18,600                  | 32,206                 | 54,427                                 | 29,200                | 134,433  | 118,953  |\n| Accumulated amortisation and<br>impairment losses              | -9,787                  | -26,457                | -49,236                                | -5,516                | -90,996  | -67,889  |\n| Carrying amount as of 31 December<br>2022                      | 8,813                   | 5,749                  | 5,191                                  | 23,684                | 43,437   | 51,064   |\n| Cost as of 31 December 2023                                    | 19,630                  | 32,265                 | 55,917                                 | 29,200                | 137,012  | 118,953  |\n| Accumulated amortisation and                                   | -10,393                 | -26,977                | -50,840                                | -7,463                | -95,673  | -67,889  |\n| impairment losses<br>Carrying amount as of 31 December<br>2023 | 9,237                   | 5,288                  | 5,077                                  | 21,737                | 41,339   | 51,064   |\n\nThe amortisation charge for the year is included under \"depreciation and amortisation charge\" in the consolidated statement of profit or loss.\n\nAt 31 December 2023, the Group had entered into agreements to acquire intangible assets amounting to EUR 433 thousand (2022: EUR 791 thousand).\n\n{64}------------------------------------------------\n\nImage /page/64/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside a circular shape, also in dark blue, which surrounds the text. The background of the image is white.\n\n#### **Research and development expenditure**\n\nDue to the nature of its activity and as stated in its mission, the Acerinox Group considers research, development and innovation to be strategic in nature. R&D&I projects are focused on three main areas: development of new products, improving processes to further improve quality, productivity and costs, and adapting processes to new technologies and sustainability through projects that contribute to the circular economy, decarbonisation and waste recycling. With the incorporation of VDM Metals into the Acerinox Group, efforts were combined to leverage available resources jointly in line with the company's overall purpose and strategy of fostering sustainable innovation. The high-performance alloys division focuses its R&D&I activities mainly on the development of tailor-made products in collaboration with its customers. This includes the development of new materials, as well as the identification of alloys with high performance potential and the optimisation of key properties in those established in the market that can be classified for other applications. Most of the projects are carried out in collaboration with customers and research institutes which take part in the projects. The Group is improving the adaptability of the R&D&I departments by creating joint work structures and more agile and flexible processes. In 2023, collaboration in R&D tasks among the various units of the Group has strengthened, leading to enhanced synergies in generating knowledge and adding value to our products.\n\nVDM is the leading patent holder in the high-performance alloys sector with 53 patents.\n\nCertain research and development expenses incurred by the Group do not meet the criteria for capitalisation and are therefore expensed as incurred, according to their nature. The total research, development and technological innovation (R&D&I) expenses recorded directly as expenses for the year and charged to the Group's income statement stood at EUR 17,652 thousand (2022: EUR 16,516 thousand).\n\nThe high-performance alloys division does, however, capitalise costs relating to R&D&I projects in which the research findings are used to produce new products and processes, or to significantly improve existing products and processes, provided that the product or process proves to be technically and commercially feasible, the Group has the resources required to complete the development programme and it is considered that they will generate future cash flows that will enable their recovery. The total R&D&I expenditure capitalised in the year amounts to EUR 1,029 thousand, relating to 8 projects (2022: EUR 1,454 thousand, relating to 5 projects). VDM has 23 employees working on 89 R&D&I projects.\n\n#### **Customer portfolio**\n\nThe allocation in 2020 of the purchase price of the VDM Group to the net assets and liabilities identified led to the identification of new intangible assets, arising from the valuation of the customer portfolio.\n\nIt is standard industry practice to recognise both relationships with customers and the backlog as two of the most important intangible assets arising from a business combination. Both assets were valued jointly in the purchase price allocation process. The estimated fair value at the acquisition date was EUR 29,200 thousand.\n\n#### **Goodwill**\n\nAt 31 December 2023, goodwill in the amount of EUR 51,064 thousand reflected mainly the amount arising from the business combination performed in 2020 as a result of the acquisition of the VDM Metals Group (EUR 49,829 thousand). The goodwill was allocated to the VDM's subgroup cash-generating unit (CGU) which, as a whole, belongs to the highperformance alloys segment.\n\n#### **7.1 Impairment of goodwill**\n\nThe Group estimates the recoverable amount of goodwill on an annual basis, or more frequently where indications of possible impairment are identified. Accordingly, goodwill is allocated to each of the cash-generating units (CGUs) of the company to which the economic benefits of the business combination synergies are expected to flow.\n\nThe recoverable amount of a CGU is determined on the basis of the calculation of its value in use. These calculations use cash flow projections based on five-year financial budgets approved by management. Cash flows beyond this five-year period are extrapolated using the estimated growth rates indicated below. The terminal value is calculated by taking into consideration average amounts calculated on the basis of figures achieved in the past and also in the budgeted period, which enables bull and bear cycles to be standardised.\n\n{65}------------------------------------------------\n\nImage /page/65/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is positioned inside a blue circle that is open on the left side.\n\n#### **VDM**\n\nThe goodwill resulting from the acquisition of the VDM Group in 2020, amounting to EUR 49,829 thousand, has been allocated to the cash-generating unit (CGU) of the VDM subgroup, which belongs as a whole to the high-performance alloys segment.\n\nThe Group prepares annual five-year budgets. The estimated sales and production volumes rely on current capacities determined by existing machinery and equipment, approved investment projects, and considerations of anticipated future demand and market prices. These estimates are verified against projections provided by independent industry experts, including SMR (Steel Metals and Market Research). Management determines production costs by taking into account the current situation, the efficiency plans implemented and future price developments. Raw materials are estimated at constant prices.\n\nThe discount rates used are pre-tax values and reflect specific risks relating to the relevant segments. Other significant assumptions such as raw material prices are tied to the most recent values recorded in the pertinent markets.\n\nWith a sales volume exceeding 40 thousand tonnes in 2023 (2022: 43 thousand tonnes), VDM Metals continued to be the leading global manufacturer of nickel alloys.\n\nIn the 2023 financial year, the high-performance alloys market sustained strong performance with high demand and prices. This led to improved margins compared to the previous year, during which VDM achieved record profits. Additionally, the margins exceeded the estimates from the previous year, validating the goodwill recorded. The VDM Group achieved a new record result this year. The consolidated profit of the high-performance alloys division for the year amounted to EUR 73 million (70% higher than the previous year).\n\nMarket performance this year has varied from sector to sector. The oil and gas and chemical process industries have experienced ongoing growth. The automotive sector has maintained levels comparable to those of 2022, while the energy sector has seen significant declines, albeit with prospects for recovery ahead. In the aerospace sector, demand is increasingly oriented towards China, in many cases exceeding the capacity of the supply chain.\n\nThe Group has revised its five-year estimates to adapt them to new market circumstances, price levels and approved investment plans.\n\nThe Group is confident that the flows to perpetuity will materialise, mainly in terms of its use of production capacity and margins, using a perpetuity growth rate (g) of 2.2% in line with expected long-term inflation for the main markets in which VDM operates.\n\nThe key assumptions used to calculate the value in use were as follows:\n\n|                                      | 2023  | 2022  |\n|--------------------------------------|-------|-------|\n| Planned EBIT margin (*)              | 9.7%  | 5.5%  |\n| Weighted average growth rate, g (**) | 2.2%  | 2.3%  |\n| Pre-tax discount rate (***)          | 13.1% | 11.6% |\n| After-tax discount rate (***)        | 9.2%  | 8.4%  |\n\n*(\\*) Five-year budgeted average EBIT margin. EBIT is defined as profit or loss from operations and expressed as a margin or percentage of revenue.*\n\n*(\\*\\*) Rate used to extrapolate cash flows beyond the budgeted period.*\n\n*(\\*\\*\\*) Discount rate: weighted average cost of capital (WACC).*\n\nThe discount rate (WACC or weighted average cost of capital) was calculated on the basis of the interest rates of the German sovereign debt (twenty-year treasury bond) and a capital structure, market risk premiums and ratios of similar companies.\n\nWith respect to the terminal value, adjustments were performed to obtain flows to perpetuity, depreciation and amortisation were matched to the investments and changes in working capital were also calculated based on average amounts, deemed consistent in the long term, increased by the growth rate (g). The EBIT margin projected to perpetuity does not differ from that achieved by VDM in previous years.\n\nAnother assumption is the price of raw materials, particularly nickel, which is set when drawing up the budget. This is extrapolated and remains constant during the period of analysis.\n\nDue to the uncertain environment clouding the markets in which VDM operates, the Group analysed the probability of occurrence of the key assumptions, adjusting the estimated budgets, as well as those of the terminal year, to normalised\n\n{66}------------------------------------------------\n\nImage /page/66/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that arches over the text. The color of the text is also blue, matching the color of the circle. The overall design is simple and corporate, conveying a sense of strength and reliability.\n\nvalues that take into account the results obtained in the past. The residual value determined by the tests represents 60.3% of the total recoverable amount (2022: 63.9%).\n\nThe impairment test performed on 31 December 2023 showed a recoverable amount of EUR 1,198,380 thousand (2022: EUR 881,180 thousand), higher than the carrying amount, EUR 1,003,342 thousand (2022: EUR 814,257 thousand) by EUR 195,038 thousand (2022: EUR 66,923 thousand). Consequently, it is not necessary to recognise any impairment losses on goodwill.\n\nTo achieve an impairment of the carrying amount, the discount rate (WACC) would have to be increased by 20.3% to 11.1% (2022: 9.0%), while maintaining the growth rate (g). The planned average EBIT margin would have to be reduced by 20.4% to 7.7% (2022: 3.9%), with the other two assumptions remaining unchanged.\n\n#### <span id=\"page-66-0\"></span>**NOTE 8 – PROPERTY, PLANT AND EQUIPMENT**\n\nThe detail of the various items of property, plant and equipment and of the changes therein in 2023 and 2022 is shown in the following table:\n\n{67}------------------------------------------------\n\nImage /page/67/Picture/1 description: The image features the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is in a dark color, possibly black or a very dark blue, which contrasts with the white background of the logo. The blue circle surrounds the word, creating a clean and professional design.\n\n(Amounts in thousands of euros)\n\n| COST                           | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property,<br>plant and<br>equipment | Property, plant<br>and equipment<br>in the course of<br>construction | TOTAL     |\n|--------------------------------|-----------------------|------------------------|-------------------------------------------------------|----------------------------------------------------------------------|-----------|\n| Balance as of 31 December 2021 | 978,115               | 4,566,351              | 176,726                                               | 51,668                                                               | 5,772,866 |\n| Hyperinflation adjustments     | 344                   | 62                     | 121                                                   |                                                                      | 521       |\n| Additions                      | 1,748                 | 61,948                 | 14,480                                                | 72,979                                                               | 151,152   |\n| Transfers                      | 10,700                | 43,922                 | 4,325                                                 | -54,327                                                              | 4,626     |\n| Disposals                      | -3,109                | -32,087                | -4,467                                                | -71                                                                  | -39,734   |\n| Translation differences        | 28,686                | 147,181                | 2,113                                                 | 1,601                                                                | 179,581   |\n| Balance as of 31 December 2022 | 1,016,484             | 4,787,377              | 193,298                                               | 71,850                                                               | 6,069,009 |\n| Hyperinflation adjustments     | 319                   | 57                     | 114                                                   |                                                                      | 490       |\n| Additions                      | 2,770                 | 51,672                 | 15,348                                                | 101,883                                                              | 171,673   |\n| Decommissioning provision      | 6,871                 |                        |                                                       |                                                                      | 6,871     |\n| Transfers                      | 4,825                 | 24,897                 | 17,146                                                | -46,087                                                              | 78        |\n| Disposals                      | -2,812                | -30,169                | -22,989                                               | -59                                                                  | -56,029   |\n| Translation differences        | -19,892               | -126,157               | -2,408                                                | -2,107                                                               | -150,564  |\n| Balance as of 31 December 2023 | 1,008,565             | 4,707,677              | 200,509                                               | 125,480                                                              | 6,042,231 |\n\n| ACCUMULATED AMORTISATION AND<br>IMPAIRMENT LOSS | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant and<br>equipment | Property, plant<br>and equipment<br>in the course of<br>construction | TOTAL     |\n|-------------------------------------------------|-----------------------|------------------------|----------------------------------------------------|----------------------------------------------------------------------|-----------|\n| Balance as of 31 December 2021                  | 452,351               | 3,371,032              | 129,169                                            | 0                                                                    | 3,952,552 |\n| Allocation                                      | 23,022                | 150,356                | 6,062                                              |                                                                      | 179,440   |\n| Allowance for impairment losses                 |                       | 203,905                |                                                    |                                                                      | 203,905   |\n| Hyperinflation adjustments                      | 210                   | 50                     | 120                                                |                                                                      | 380       |\n| Transfers                                       | 2,198                 | -9,789                 | 9,616                                              |                                                                      | 2,023     |\n| Disposals                                       | -2,050                | -27,100                | -4,189                                             |                                                                      | -33,339   |\n| Translation differences                         | 12,129                | 101,020                | 1,290                                              |                                                                      | 114,439   |\n| Balance as of 31 December 2022                  | 487,860               | 3,789,474              | 142,068                                            | 0                                                                    | 4,419,402 |\n| Allocation                                      | 22,361                | 122,856                | 14,340                                             |                                                                      | 159,557   |\n| Allowance for impairment losses                 | 98,339                | 56,462                 | 1,005                                              | 373                                                                  | 156,179   |\n| Hyperinflation adjustments                      | 197                   | 46                     | 109                                                |                                                                      | 352       |\n| Transfers                                       | 62                    | 2,960                  | -2,497                                             |                                                                      | 523       |\n| Disposals                                       | -1,802                | -26,513                | -22,865                                            |                                                                      | -51,180   |\n| Translation differences                         | -11,698               | -100,786               | -2,010                                             | -9                                                                   | -114,502  |\n| Balance as of 31 December 2023                  | 595,319               | 3,844,499              | 130,150                                            | 364                                                                  | 4,570,332 |\n\n| NET VALUE                                      | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property,<br>plant and<br>equipment | Property, plant<br>and equipment<br>in the course of<br>construction | TOTAL      |\n|------------------------------------------------|-----------------------|------------------------|-------------------------------------------------------|----------------------------------------------------------------------|------------|\n| Cost as of 31 December 2021                    | 978,115               | 4,566,351              | 176,726                                               | 51,668                                                               | 5,772,860  |\n| Accumulated amortisation and impairment losses | -452,351              | -3,371,032             | -129,169                                              |                                                                      | -3,952,552 |\n| Carrying amount as of 31 December 2021         | 525,764               | 1,195,319              | 47,557                                                | 51,668                                                               | 1,820,308  |\n| Cost as of 31 December 2022                    | 1,016,484             | 4,787,377              | 193,298                                               | 71,850                                                               | 6,069,009  |\n| Accumulated amortisation and impairment losses | -487,860              | -3,789,474             | -142,068                                              |                                                                      | -4,419,402 |\n| Carrying amount as of 31 December 2022         | 528,624               | 997,903                | 51,230                                                | 71,850                                                               | 1,649,607  |\n| Cost as of 31 December 2023                    | 1,008,565             | 4,707,677              | 200,509                                               | 125,480                                                              | 6,042,231  |\n| Accumulated amortisation and impairment losses | -595,319              | -3,844,499             | -130,150                                              | -364                                                                 | -4,570,332 |\n| Carrying amount as of 31 December 2023         | 413,246               | 863,178                | 70,359                                                | 125,116                                                              | 1,471,899  |\n\nThe depreciation charge for the year is included under \"depreciation and amortisation charge\" in the consolidated statement of profit or loss.\n\nThe difference between the depreciation and amortisation charge included in the consolidated statement of profit or loss and consolidated statement of cash flows and the sum of the amounts charged reflected in the tables relating to property, plant and equipment, intangible assets, investment property and right-of-use assets is mainly due to the hyperinflation adjustments made to all the profit or loss items of the Argentine entity, which, in the case of the depreciation and amortisation charge, amount to EUR 24 thousand (2022: EUR 28 thousand).\n\n{68}------------------------------------------------\n\nImage /page/68/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue crescent shape. The crescent shape is open at the top and curves around the text. The text is also in blue, matching the color of the crescent.\n\nAny impairment of property, plant and equipment and goodwill is included under a separate, specific heading in the consolidated statement of profit or loss.\n\n#### **Investments**\n\nThe investments made in 2023 in both property, plant and equipment and intangible assets amounted to EUR 174,785 thousand. These investments include both the acquisition and installation of new equipment and recurrent maintenance expenditure investments. In many cases, these are investments aimed at improving efficiency and productivity, but they are also strategic in nature and committed to sustainability, as they entail a reduction in energy consumption. In the case of Acerinox Europa, the total amount of investments (including maintenance) is EUR 39 million, related to improvements and extensions made to several production lines. The investments made by the company North American Stainless amount to EUR 73.9 million, of which EUR 21 million correspond to the investment plan approved at the beginning of this year, and EUR 27 million to recurring investments in maintenance. At Columbus Stainless, investments for the year amounted to EUR 21.2 million. Finally, the VDM Group invested EUR 27.2 million in the year.\n\nIn January 2023, the Board of Directors of Acerinox, S.A. approved an investment of USD 244 million in the North American Stainless Group company, which will allow it to increase its production capacity by 200,000 tonnes (20% more) and thus strengthen its position in the market with higher added value products. NAS will have a new cold rolling mill, and will revamp its annealing and pickling lines. It also plans to enlarge the steelworks, along with other equipment.\n\nIn addition, in December 2023, the Board of Directors approved a EUR 67 million investment plan for the high-performance alloys division at the German plants in Unna, Altena and Werdohl, which will enable a gradual increase in production capacity for precision strip, bars, and wires, as well as sales by 15%. The planned investments include the expansion of three remelting furnaces, the upgrade of an annealing and pickling line, an additional defect detection line for bars and an atomiser for the production of stainless-steel powder and high-performance alloys for additive manufacturing.\n\nIn 2022, the investments made amounted to EUR 153,892 thousand, which include both the acquisition and installation of new equipment and recurrent investments in maintenance. As for Acerinox Europa, the total investment amount, including maintenance, reached EUR 52.7 million. The capitalisation of the major repairs conducted during the year at the steelworks and hot rolling mill, the construction of the slag storage building, and the installation of the new CS-6 cutting line were notable among these investments. The investments made by the company North American Stainless amounted to EUR 43.9 million, destined to the maintenance of existing equipment, updating of the AP1, new slitting line SL-5 and the replacement of equipment damaged in the steelworks incident and replacement of wiring. At Columbus Stainless, investments for the year amounted to EUR 19.8 million, with the installation of oxygen and nitrogen storage tanks and investments in plant maintenance being particularly noteworthy. Finally, the VDM Group invested EUR 27.8 million over the year for production growth, product quality improvement, safety, environment and the maintenance of existing equipment.\n\n#### **Property, plant and equipment in the course of construction**\n\nThe detail of the investments classified under this heading is as follows:\n\n|                                              | 2023    | 2022   |\n|----------------------------------------------|---------|--------|\n| Buildings                                    | 15,008  | 12,280 |\n| Plant and machinery                          | 103,180 | 57,437 |\n| Other items of property, plant and equipment | 6,928   | 1,371  |\n| Advances                                     |         | 762    |\n| TOTAL                                        | 125,116 | 71,850 |\n\n(Amounts in thousands of euros)\n\nOf the total amount recognised under this heading, EUR 25,082 thousand at Acerinox Europa (2022: EUR 21,316) and EUR 57,447 thousand at the US company North American Stainless, as a result of the new investment plan (2022: EUR 25,354 thousand), EUR 10,524 thousand at Roldan, EUR 12,812 thousand at Columbus (2022: EUR 10,648 thousand) and EUR 19,032 thousand in VDM (2022: 9,495 thousand), are noteworthy.\n\nThe total amount of transfers carried out from fixed assets in progress to completed in this year amounts to EUR 46,087 thousand, which include EUR 17,397 of Acerinox Europa for a new cutting line and improvements completed in several lines. In the case of North American Stainless, the transfers amounted to EUR 21,368 thousand corresponding, among others, to a bridge crane, improvements in the hot rolling annealing furnace (2022: EUR 54,327 thousand, mainly corresponding to the upgrade of the AP1).\n\n{69}------------------------------------------------\n\nImage /page/69/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue circle. The word \"ACERINOX\" is also in blue, matching the color of the circle. The circle is not fully closed, leaving a small gap at the top.\n\n#### **Property, plant and equipment located outside Spain**\n\nThe detail of the property, plant and equipment, including investment property, located outside Spain is as follows:\n\n(Amounts in thousands of euros)\n\n|                                                                | 2023      |                             | 2022      |                             |\n|----------------------------------------------------------------|-----------|-----------------------------|-----------|-----------------------------|\n|                                                                | Cost      | Accumulated<br>depreciation | Cost      | Accumulated<br>depreciation |\n| Land and buildings                                             | 710,534   | -424,046                    | 722,417   | -319,684                    |\n| Plant and machinery                                            | 3,255,890 | -2,668,683                  | 3,347,857 | -2,629,224                  |\n| Other items of property, plant and<br>equipment                | 142,873   | -78,509                     | 138,883   | -92,070                     |\n| Property, plant and equipment in the<br>course of construction | 89,860    | -364                        | 45,903    | -364                        |\n| TOTAL                                                          | 4,199,157 | -3,171,602                  | 4,255,060 | -3,040,978                  |\n\n#### **Changes in estimates**\n\nAs explained in **Note 3**, the Group periodically reviews estimated useful lives based on the valuations conducted by experts from the appropriate entity.\n\nNo useful lives were written down in the Group during the year.\n\nIn 2022, the Group company Columbus Stainless reviewed the useful lives of items whose useful life was about to end, extending it in those cases where the items were still in use. The technological improvements and maintenance plans performed on an ongoing basis by the company led the projected useful lives to be lengthened, since the company considered that it would continue to obtain cash flows from the use of these assets. The carrying amount of the assets whose useful lives were estimated in that fiscal year amounted to EUR 932 thousand, while the impact on income from the reduction of depreciation was EUR 60 thousand.\n\nThe Group proceeded with accounting of the change in estimate prospectively, as stipulated in IAS 8.\n\n#### **Guarantees**\n\nNone of the Group's assets had been pledged to secure bank borrowings at 31 December 2023 or 2022.\n\n#### **Obligations and commitments**\n\nAt 31 December 2023, the Group had entered into agreements to acquire new equipment and facilities for EUR 140,189 thousand, among which the following stand out: EUR 97,592 thousand relating to the investments made by North American Stainless as a result of the approved investment plan, EUR 19,828 thousand by Acerinox Europa, EUR 9,880 thousand corresponding to Columbus and EUR 11,152 thousand to the VDM Group.\n\nAt 31 December 2022, the Group had entered into agreements to acquire new equipment and facilities for EUR 59,254 thousand, among which the following stand out: EUR 16,543 thousand relating to the investments made by Acerinox Europa, EUR 17,387 thousand by North American Stainless, EUR 9,800 thousand corresponding to Columbus and EUR 11,254 thousand to the VDM Group.\n\n#### **Capitalisation of borrowing costs**\n\nBorrowing costs of EUR 60 thousand relating to Columbus Stainless were capitalised in 2023 (2022: EUR 14 thousand, also relating to the same Group company). The capitalisation rate in 2023 was 10.26% (2022: 7.46%).\n\n#### **Disposals of property, plant and equipment**\n\nLosses on the sale or retirement of property, plant and equipment recognised under \"other operating income\" in the consolidated statement of profit or loss for 2023 amount to EUR 2,719 thousand (2022: EUR 1,987 thousand), which mostly correspond to the removal of fixed assets from the Group's warehouses, either because they are obsolete or because they have been used for maintenance work. Last year, the assets damaged at the North American Stainless Group company as a result of the incident at the steelworks were also written off.\n\n{70}------------------------------------------------\n\nImage /page/70/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned inside a blue circle that is open at the bottom.\n\nThe gain on the sale or retirement of property, plant and equipment recognised in the 2023 statement of profit or loss under \"other operating income\" amounts to EUR 824 thousand, mainly corresponding to the sale of a warehouse in Lisbon owned by one of the Group's marketing entities (2022: EUR 1,837 thousand corresponding to the sale of a warehouse in the Spanish company Inoxcenter, classified as investment property).\n\n#### **Environment**\n\nThe items of property, plant and equipment the purpose of which is to minimise environmental impact and protect and improve the environment at 31 December 2023 and 2022 were as follows:\n\n(Amounts in thousands of euros)\n\n| Nature and purpose             | 2023        |                             | 2022        |                             |\n|--------------------------------|-------------|-----------------------------|-------------|-----------------------------|\n|                                | Gross value | Accumulated<br>depreciation | Gross value | Accumulated<br>depreciation |\n| Water treatment                | 110,447     | -97,659                     | 113,661     | -92,214                     |\n| Acid neutralisation            | 62,159      | -51,824                     | 63,171      | -48,559                     |\n| Treatment of gaseous emissions | 89,159      | -74,198                     | 89,901      | -73,093                     |\n| Automatic addition system      | 8,630       | -7,448                      | 8,741       | -7,339                      |\n| Other elements                 | 122,632     | -101,870                    | 123,839     | -101,587                    |\n| Total                          | 393,027     | -332,999                    | 399,313     | -322,792                    |\n\nIn 2023, the Group received an environmental grant of EUR 24,612 thousand mostly related to offsetting the costs of indirect greenhouse gas emissions. In 2022, EUR 9,879 thousand were received for the same concept. Both grants were recognised as income in the year under \"other operating income\".\n\nIn 2023, the Group incurred ordinary environmental expenses of EUR 119,069 thousand (2022: EUR 148,240 thousand).\n\n#### **Property, plant and equipment not used in operations**\n\nGroup property, plant and equipment not used in operations includes an industrial building which is classified as investment property. The detail and valuations of this property are broken down in **Note 9**.\n\n#### **Other disclosures**\n\nThere were no legal proceedings, attachments or similar measures that could affect items of property, plant or equipment at 31 December 2023 or 2022.\n\nThe Group companies have taken out several insurance policies to cover the risks to which their property, plant and equipment are subject. It is considered that these policies sufficiently cover such risks.\n\n#### **8.1 Impairment losses**\n\nAs established in IAS 36, and as mentioned in the accounting policies (**Note 2.11**), at each reporting date the Group assesses whether there is any indication that its assets might have become impaired. The value of an asset is impaired when its carrying amount exceeds its recoverable amount. The Group considers that indications of impairment exist when there is/are a significant decrease in the value of the asset, significant changes in the legal, economic or technological environment that could affect the measurement of assets, obsolescence or physical impairment, idle assets, low returns on assets, discontinuation or restructuring plans, repeated losses at the entity or substantial deviation from the estimates made. That is to say, to assess indications of impairment, both external sources of information (technological changes, significant fluctuations in market interest rates, market value of the assets) and internal sources of information (evidence of obsolescence, sustained losses at the entity, substantial deviation from estimates, etc.) are taken into account.\n\n{71}------------------------------------------------\n\nImage /page/71/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is a dark color, possibly blue or black. The text is enclosed within a circular shape, also in a dark color, which appears to be a ring or outline. The background is white.\n\nProperty, plant and equipment and intangible assets represent 28% of the Group's total assets. When examining individual segments, the high-performance alloys division accounts for 16.9% of the Group's total assets, while the stainless steels division represents 83.1%, with 77.3% attributed to the factories within that division. The remaining 5.8% was accounted for by the rest of the Group's 33 subsidiaries, mainly trading companies:\n\n| SUBSIDIARIES                  | 2023     | 2022     |\n|-------------------------------|----------|----------|\n| ACERINOX EUROPA, S.A.U.       | 26.55 %  | 23.50 %  |\n| ROLDAN, S.A.                  | 1.83 %   | 1.29 %   |\n| INOXFIL, S.A.                 | 0.18 %   | 0.17 %   |\n| NORTH AMERICAN STAINLESS INC. | 37.73 %  | 34.79 %  |\n| COLUMBUS STAINLESS PTY Ltd.   | 7.93 %   | 7.38 %   |\n| BAHRU STAINLESS               | 3.08 %   | 12.45 %  |\n| VDM METALS GROUP              | 16.89 %  | 15.09 %  |\n| Other subsidiaries            | 5.81 %   | 5.33 %   |\n| TOTAL                         | 100.00 % | 100.00 % |\n\nSince individual assets do not generate cash inflows independently, as the whole production process needs to be completed, impairment is not estimated on an individual basis but by allocating the assets to cash-generating units. In the case of factories, the smallest cash-generating units that can be considered encompass each factory as a whole.\n\nThe year 2023 was again marked by geopolitical tensions and supply chain problems. The Gaza-Israel conflict, alongside the ongoing Russia-Ukraine dispute, added to regional tensions. Furthermore, as the year drew to a close, disturbances in the Red Sea caused trade route disruptions, resulting in cargo being rerouted from the Suez Canal to longer alternative routes with higher costs.\n\nThe stainless division had a slow year following the inventory adjustment phase that started in the second half of 2022. Production continued the downward trend that was already evident in the fourth quarter of 2022.\n\nThe low demand throughout the year and the reduction in inventories meant that all plants in the stainless-steel division had to adjust their production to market conditions.\n\nThere were significant adjustments in all production countries with the exception of China and Indonesia, whose surpluses generated led to higher price pressure on the markets.\n\nThe market for high-performance alloys, on which Acerinox is focusing part of its strategy with a renewed commitment to higher value-added products, performed satisfactorily, maintaining its strength, solid demand and good prospects. Demand remained stable throughout the year, while production activity was slightly lower than in the record year of 2022 (-7% in steel production).\n\nAmid the uncertain conditions and challenges in the European and Asian stainless-steel markets, there are signs of a negative impacts in the Group's plants. These include Bahru Stainless in Malaysia, the Columbus plant in South Africa and Acerinox Europa, Roldan and Inoxfil in Spain.\n\n#### **Bahru Stainless, Sdn. Bhd**\n\nBahru Stainless, Sdn. Bhd was incorporated in 2008 and is located in Johor, Malaysia. Initially intended as a comprehensive stainless-steel flat product manufacturing facility, the rise in producers in the region prompted the Group to suspend the investments scheduled for future phases. It currently has two annealing and pickling lines and two cold-rolling lines.\n\nThe persistent overcapacity in the Chinese market over the past decade, along with the resulting price pressures from producers in this region on the international and Asian markets, has created a substantial price gap compared to the European and, above all, American markets for several years. China and Indonesia currently account for almost 70% of the world's stainless-steel production.\n\nThe various Southeast Asian countries and Asian countries in general, as well as Europe, have reacted to Chinese overcapacity by applying anti-dumping or protectionist measures in their local markets.\n\nDuring the year, the Asian market continued to suffer from aggressive pricing policies by major competitors in China and Indonesia.\n\n{72}------------------------------------------------\n\nImage /page/72/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue circle. The circle is not fully closed, with a gap at the top, giving it a crescent shape. The word \"ACERINOX\" is in a darker color, possibly black or a dark blue, contrasting with the white background.\n\nIn this context, and given the lack of prospects for this market, the Group is in the process of making strategic considerations about the future of Bahru Stainless, and does not rule out cessation of activity at this plant, and a time horizon of two years has been set to realise some of the alternatives currently under discussion.\n\nGiven this situation of uncertainty, the Group has again requested the support of an independent expert for the determination of the recoverable amount at 31 December 2023.\n\nIn previous years, estimates of recoverable value were made by an independent expert by calculating fair value less costs to sell and under the perspective of a market participant and considering a finite life (until 2046).\n\nGiven the new backdrop, the valuation method has been reconsidered to adapt it to the new circumstances and the latest management decisions. Thus, the value in use is the one that best reflects this situation.\n\nFor the determination of the value in use, a short-term scenario with a 2-year budget (2024-2025) and a residual value at the end of the period. The estimated budgets consider a gradual closure of the lines in the period considered. This scenario is the main assumption in the valuation conducted, where the discount rate for this two-year period is not significant. Estimated average EBIT over the two-year period is -4.1%.\n\nFor measurement purposes, a residual value of the lines has been considered in the terminal value, as well as the necessary decommissioning costs. In view of the scenario considered reasonable in this context, no value was recognised for tax credits and tax concessions, as these would be lost in the scenario under consideration.\n\nIn this scenario, the independent expert's valuation of Bahru results in zero value, so the Group has impaired all assets, including intangible assets and property, plant, and equipment, except for land and the residual value of machinery. The impairment recognised amounts to EUR 156,207 thousand. In turn, in view of this new situation, a decommissioning provision amounting to EUR 6,871 thousand has been recognised, recognising in turn an increase in the value of the assets.\n\nAs the assets are fully impaired, except for the aforementioned values, the Group does not expect any future changes in valuations and therefore no sensitivity analysis is required. Only in the event of changed circumstances would the Group be able to reverse part of the recorded impairment, as set out in the policy in Note 2.11.\n\nIn 2022, an asset impairment of EUR 203,905 thousand was recorded. Impairment accumulated at year-end amounted to EUR 489,435 thousand.\n\n#### **Acerinox Europa, S.A.U.**\n\nAcerinox Europa was incorporated in 2011 as a result of the spin-off of the manufacturing activity of Acerinox, S.A., and its main assets are the facilities located in Campo de Gibraltar. The Acerinox Europa factory, inaugurated in 1970, was the first integral stainless-steel factory in the world. The knowledge and experience gained during its design and execution played a pivotal role in the establishment of other factories within the Group. It is the leading stainless-steel producer in the Spanish market.\n\nThe integrated flat product plant has steelmaking, hot rolling and cold-rolling facilities and has a theoretical installed steelmaking capacity of one million tonnes in steelmaking and 660,000 tonnes of cold rolling. It manufactures flat stainlesssteel products in various types of steel, formats, thicknesses and finishes.\n\nAcerinox Europa is strategically located on the Strait of Gibraltar and has access to the Atlantic and the Mediterranean as well as its own seaport. The company supplies flat products all over the world, with a focus on the European continent, as well as semifinished products to other plants within the Group's production network, primarily to the Acerinox Group's long products plant in Spain (Roldan). Despite being the Group's first a nd oldest factory, the plant remains at the forefront by ensuring that its production lines are upgraded with the latest advances in order to remain competitive.\n\nAcerinox Europa is the market leader in Spain with a market share of around 50% and 10% in Europe.\n\nThis year, the adjustment of stocks in the supply chain has led to a fall in apparent consumption in Europe of around 20%. The main correction, with declines of more than 50%, was in imports, which were mainly destined for the distribution market, while demand from end consumers remained more stable.\n\n{73}------------------------------------------------\n\nImage /page/73/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle surrounds the word, creating a clear and recognizable brand mark.\n\nThe reduction in imports this year is due to the collapse of prices on the European market, as well as the safeguard and trade defence measures in force, and the positive impact of the opening of new anti-circumvention investigations into Indonesian re-rolled material in Taiwan, Vietnam and Turkey.\n\nThe complicated situation of the European markets caused by the fall in demand and in prices, and the high energy costs, have led to signs of deterioration in this financial year. In the face of this uncertainty, the management team requested a valuation by an independent expert, who determined the recoverable amount of the assets based on their value in use.\n\nFor this purpose, the Group has updated the five-year results forecasts based on the new circumstances and taking into account the future strategic plans approved by the management, which have been designed with the aim of improving the results of Acerinox Europa, the main component of the Spanish fiscal Group, redirecting a greater part of its sales towards end customers and towards products with higher added value.\n\nThe Board of Directors of Acerinox has approved the Acerinox Europa strategic plan for the next 2 financial years 2024- 2025.\n\nIn terms of demand, 2023 was the worst year in terms of sales since the creation of Acerinox Europa in 2011, due to the high stock levels in the distribution chain, which have led to a drop in sales to manufacturers, forcing the application of Temporary Layoff Plans (ERTEs) at the Algeciras factory on a recurring basis for several months of this year. Low prices have also forced the Group to forego orders due to the inability to achieve minimum contribution margins. By 2024 and with inventories in the supply chain very low, the Group expects to reach sales levels somewhat above 2022 (second worst year in history, only surpassed by 2023) and to return to more stable volumes, in line with historical pre-pandemic levels, from 2025 onwards, thanks to the strategic plans adopted by the company. From 2026, SMR (Steel Metals and Market Research) demand estimates have been considered, which estimate moderate increases of 1.7% on average for the following 3 years.\n\nOn the price side, estimates are based on external sources, which foresee slight increases in both 2024 and 2025, from the lowest historical levels ever seen in 2023. Prices remain constant from 2026 onwards.\n\nFor supply prices, forward price curves for both electricity and gas are considered. All other costs take into account increases in consumer price indices.\n\nThe Group took into account all these circumstances and the adjustments to the macroeconomic forecasts in preparing the five-year budgets.\n\nThe budgets have been prepared taking into account the following: demand estimates, raw material and selling prices, exchange rates, consumer price increases, energy costs estimates and the Company's strategy itself.\n\nThe independent expert has reviewed this initial budget provided by the company. It has taken into account the future sales scenarios and expectations, stressing gross margin to align with historical values improved by the company's strategy.\n\nTo determine the value in use of the assets, both the estimate of future cash flows that the entity expects to obtain from the assets and the discount rate, i.e. the weighted average cost of capital (WACC), were taken in account.\n\nThe key assumptions used to calculate the value in use were as follows:\n\n|                                   | 2023  | 2022  |\n|-----------------------------------|-------|-------|\n| Planned EBIT margin (*)           | 4.9%  | 5.1%  |\n| Weighted average growth rate (**) | 2.0%  | 2.3%  |\n| Pre-tax discount rate (***)       | 11.9% | 10.8% |\n| After-tax discount rate (***)     | 9.3%  | 8.2%  |\n\n*(\\*) Five-year budgeted average EBIT margin. EBIT is defined as profit or loss from operations and expressed as a margin or percentage of revenue.*\n\n*(\\*\\*) Rate used to extrapolate cash flows beyond the budgeted period.*\n\n*(\\*\\*\\*) Discount rate: weighted average cost of capital (WACC).*\n\nThe discount rate was determined by considering a normalised 20-year German bond as the benchmark. Likewise, a market risk premium for Spain, historical betas, a leverage structure and cost of debt in line with market assumptions have been considered.\n\nA normalisation exercise has been conducted in relation to the terminal value to achieve a perpetuity cash flow that is expected to remain stable in the long term, increased by the growth rate (g). The growth rate (g) was estimated on the basis of expected long-term inflation. The residual value considered in the test represents 79% of the total recoverable amount.\n\n{74}------------------------------------------------\n\nImage /page/74/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is positioned within a partial blue circle, which curves around the text, creating a sense of enclosure and emphasis.\n\nThe impairment test conducted at 31 December 2023 shows an excess of the recoverable amount (EUR 1,049,174 thousand) over the carrying amount (EUR 849,966 thousand) of EUR 199,208 thousand. Consequently, no impairment is recorded.\n\nA sensitivity analysis under different scenarios shows that the discount rate (WACC) would have to be increased by 17% to 10.8% to start generating impairment, with the other assumptions remaining unchanged. Regarding the growth rate (g) would have to be brought to zero, and the WACC would have to be increased by 1% in order to start achieving an impairment of the carrying amount.\n\nIn order to achieve impairment, the planned average EBIT margin would have to be reduced by 16% to an average value of 4.1% during the projected period, with the other two assumptions remaining unchanged.\n\n#### **Columbus Stainless Pty. Ltd.**\n\nColumbus Stainless, Middelburg (South Africa), is the only integrated stainless-steel factory in Africa. It is the main supplier of both the domestic market and the various consumer areas of the continent, in which it is the leader. The Columbus factory, the most technologically advanced in the industry, is equipped with the most efficient machinery and has a considerable competitive advantage due to its location, not just for the distribution of finished goods but also because of its proximity to sources of raw materials, particularly ferrochrome.\n\nColumbus manufactures both flat stainless steel and carbon steel products. Faced with the difficult market situation in both Europe and Asia in recent years, Columbus achieved a milestone with the manufacture of carbon steel using technology designed to produce stainless steel. After the closure of one of the local carbon steel production plants, part of this market was left unsupplied and had to be covered by imports. Columbus took advantage of this situation to win orders and serve this niche. In this way, the company was able to partially compensate for the difficulties in the stainless-steel market, reduce its dependence on exports and increase its steel production, thereby diluting fixed costs.\n\nThe Columbus factory has also been affected this year by low levels of demand, which has forced it to close the factory for a few weeks during the year to balance production and reduce stock levels. At Columbus, sales in the local market accounted for 65% of total sales. The diversification towards carbon steel accounted for 36% of total steel production this year.\n\nExports have been affected by the inclusion of South African steel imports in Europe's safeguard measures since June 2022.\n\nThis year, stainless-steel sales in the local market decreased by 7% compared to the previous year; carbon steel sales remained in line with the previous year, while exports decreased by 29%\n\nThe company's continuous improvement initiatives in line with the Group's excellence plans have boosted productivity and efficiency, leading to cost improvements. This has enabled Columbus to maintain a highly competitive cost structure.\n\nSales prices, as in other markets, have suffered a continuous deterioration this year.\n\nWith respect to the five-year budgets, the estimated sales and production volumes are based on current capacities using existing machines and equipment, and take into account the evolution of both future demand and prices, with respect to the company's product mix, as estimated by independent industry experts. Management determines production costs by taking into account the current situation, the efficiency plans implemented and future price developments.\n\nDemand estimates were based on SMR (Steel & Metals Market Research).\n\nThe discount rates used are pre-tax values and reflect specific risks relating to the relevant segments. Other significant assumptions such as exchange rates and raw material prices are tied to the most recent values recorded in the pertinent markets.\n\nThe Group is confident that the flows to perpetuity will materialise, mainly in terms of its use of production capacity and margins. They were calculated using growth rates estimated on the basis of the expected long-term inflation rate.\n\nThe key assumptions used to calculate the value in use were as follows:\n\n{75}------------------------------------------------\n\nImage /page/75/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the text. The circle is not a complete circle, but rather a curved shape that partially encloses the text.\n\n|                                   | 2023  |\n|-----------------------------------|-------|\n| Planned EBIT margin (*)           | 5.7%  |\n| Weighted average growth rate (**) | 4.5%  |\n| Pre-tax discount rate (***)       | 17.8% |\n| After-tax discount rate (***)     | 13.1% |\n\n*(\\*) Five-year budgeted average EBIT margin. EBIT is defined as operating income and expressed as a margin or percentage of revenue.*\n\n*(\\*\\*) Rate used to extrapolate cash flows beyond the budgeted period.*\n\n*(\\*\\*\\*) Discount rate: weighted average cost of capital (WACC).*\n\nThe average EBIT margin indicated for this financial year has been reached in the past, and in 2022 (10.9%) it was 1.9 times higher.\n\nThe discount rate (WACC or weighted average cost of capital) was calculated on the basis of the interest rates of the South African sovereign debt (ten-year swap of the South African rand) and the main markets where it is active, and a capital structure, market risk premiums and ratios of similar companies. The reference currency in this connection was the South African rand, since all the cash flows are estimated in this currency.\n\nWith respect to the terminal value, adjustments were performed to obtain flows to perpetuity, depreciation and amortisation were matched to the investments and changes in working capital were also calculated based on average amounts, deemed consistent in the long term, increased by the growth rate (g). The growth rate (g), like the discount rate, is estimated on the basis of the South African rand and calculated in accordance with the expected long-term inflation in that currency. At terminal value, the EBIT margin considered is lower than the average of the explicit budgeting period.\n\nOther assumptions are the ZAR/EUR exchange rate (20.35 ZAR/EUR) and the price of raw materials (USD 16,000/t), which are established when drawing up the budget. Both are extrapolated and kept constant during the period of analysis.\n\nDue to the uncertain environment clouding the markets in which Columbus operates, the Group analysed the probability of occurrence of the key assumptions, adjusting the estimated budgets, as well as those of the terminal year, to normalised values that mainly take into account the results obtained in the past, in addition to the company's new production mix. The residual value considered in the test represents 48% of the total recoverable amount.\n\nThe impairment test conducted at 31 December 2023 shows an excess of the recoverable amount (EUR 353,379 thousand) over the carrying amount (EUR 271,962 thousand) of EUR 81,417 thousand, accordingly, no impairment was necessary (there were no indications of impairment the previous year).\n\nHowever, a sensitivity analysis has been carried out, which concludes that the discount rate (WACC) would have to be increased by 21.8% to 15.9%, and the perpetual growth rate (g) would have to be equal to zero to start generating impairment. The planned average EBIT margin would have to be reduced by 65.6% (up to 2.0%) to start generating impairment.\n\n#### **Roldan, S.A.**\n\nRoldan is the eldest industrial facility of the Acerinox Group and one of the three manufacture plants for long product production. Roldan is located in Ponferrada (Leon, Spain) and produces angles, bars and wire rod in various types of steel and finishes. Part of its production is sent to Inoxfil, located in Igualada (Barcelona, Spain).\n\nRoldan uses as raw material for the production of long products, the billet supplied by the Group's plant in Palmones, Acerinox Europa, S.A.U.\n\nThe long product manufactured in this plant is supplied to both the internal market and to international customers, and its stainless steels are present in some of the most iconic international projects.\n\nApparent consumption of the long product in Europe in 2023 fell by 20%. The factories have operated at significantly lower production levels than in previous years, with volumes falling below the break-even point. As a result, the Roldan factory has had to implement the Temporary Layoff Plan on multiple occasions.\n\nThe decline in prices throughout the year was primarily driven by imports reaching nearly 40%, while the decrease in raw material costs had a considerable effect on the company's annual performance. Since the beginning of the year, prices have\n\n{76}------------------------------------------------\n\nImage /page/76/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is positioned within a partial blue circle, which curves around the text, creating a sense of enclosure and emphasis.\n\nbeen falling steadily, reaching a cumulative decline of 35% in December. The pressure on the market has also reduced the number of orders quoted with alloy surcharges compared to the effective prices mostly quoted by Asian suppliers.\n\nSimilar to stainless-steel flat products, demand has also been consistently low all year due to overstocking within the supply chain. Inventory levels have started to correct in the coming months, so 2024 is expected to see a substantial improvement in production, sales and prices, but not yet to 2022 levels.\n\nThe five-year budget and key variables used follow the same guidelines stated for Acerinox Europa, duly contextualised in the stainless-steel long products market.\n\nThe recoverable amount of the assets was determined in accordance with their value in use.\n\nTo determine the value in use of the assets, the estimate of future cash flows that the entity expects to obtain from the assets and the discount rate, i.e. the weighted average cost of capital (WACC), were taken in account.\n\nThe key assumptions used in the value in use calculations are the same as those described for Acerinox Europa with the exception of the budgeted average EBIT margin which in the case of Roldan has been 4.9%.\n\nThe terminal value represents 58% of the total recoverable amount. At terminal value, the EBIT margin considered is lower than the average of the explicit budgeting period.\n\nThe impairment test performed as of 31 December 2023 reveals an excess of the recoverable amount (EUR 92,787 thousand) over the carrying amount (EUR 57,485 thousand) of EUR 35,302 thousand, so that no impairment of the Company's assets is required.\n\nHowever, a sensitivity analysis has been carried out, which concludes that the discount rate (WACC) would have to be increased by 56.8% to 14.5%, and the perpetual growth rate (g) would have to be equal to zero to start generating impairment. The planned average EBIT margin would have to be reduced by 33.5% (up to 3.2%) to start generating impairment.\n\n#### **Inoxfil, S.A.**\n\nInoxfil, S.A. is one of the Group's two long product plants in Spain and engages in the manufacture of stainless-steel wire. Located in Igualada (Barcelona, Spain), this company is 100% owned by the Group company Roldan, S.A. Inoxfil receives wire rod mainly from Roldan, but also from other third-party suppliers, which is used as raw material to complete its production process and obtain wire. This is therefore the final production link in a network starting when Roldan receives the billet from Acerinox Europa, this being the only Group plant with a melting shop in Spain.\n\nThe long product manufactured by this plant is supplied both to the domestic market and to international customers.\n\nThe five-year budget and key variables used follow the same guidelines stated for Acerinox Europa, duly contextualised in the stainless-steel long products market.\n\nThe recoverable amount of the assets was determined in accordance with their value in use.\n\nTo determine the value in use of the assets, the estimate of future cash flows that the entity expects to obtain from the assets and the discount rate, i.e. the weighted average cost of capital (WACC), were taken in account.\n\nAs in the case of Roldan, the key assumptions used in the value in use calculations are the same as those described for Acerinox Europa with the exception of the budgeted average EBIT margin which in the case of Inoxfil has been 5.3%.\n\nThe terminal value represents 54% of the total recoverable amount. At terminal value, the EBIT margin considered is lower than the average of the explicit budgeting period.\n\nThe impairment test performed as of 31 December 2023 reveals an excess of the recoverable amount (EUR 16,278 thousand) over the carrying amount (EUR 11,063 thousand) of EUR 5,215 thousand, so that no impairment of the Company's assets is required.\n\nHowever, a sensitivity analysis has been carried out, which concludes that the discount rate (WACC) would have to be increased by 52.4% to 14.1%, and the perpetual growth rate (g) would have to be equal to zero to start generating\n\n{77}------------------------------------------------\n\nImage /page/77/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue, crescent-shaped arc. The arc encircles the word, creating a circular design.\n\nimpairment. The planned average EBIT margin would have to be reduced by 31.2% (up to 3.6%) to start generating impairment.\n\n#### **Impairment analyses conducted in 2022**\n\nThe Acerinox Group obtained the best results in its history in 2022 despite the complexity of the market, geopolitical uncertainty and high energy costs, especially in Europe. The improvement in activity in 2021 continued in the first half of 2022. In the second half of the year, however, activity was affected by the large quantities of imported material, which led to an increase in inventories at stockists and thus to a decline in apparent consumption.\n\nEBITDA of EUR 1,276 million was achieved in a complex environment. These include, among others, the instability generated by the geopolitical situation with Russia's invasion of Ukraine, cost inflation, especially energy prices in Europe, supply chain problems, the collapse of nickel prices on the London Metal Exchange (LME) in March and incidents that occurred in some of the Group's factories.\n\nIn this context of uncertainty, there were signs of deterioration in the Group's factories in Bahru Stainless, and in Acerinox Europa.\n\nIn the case of Bahru, an estimation of the recoverable amount (based on fair value less costs of disposal) was carried out in the context of an impairment test analysis from the perspective of a market participant, taking into account the existing scenario of uncertainty. The valuation was carried out by an independent expert. As a result of the analysis an impairment of EUR 203,905 thousand was recorded.\n\nFor Acerinox Europa, the determination of the recoverable value was based on calculating its value in use. In this regard, the impairment test conducted at 31 December 2022 showed an excess of the recoverable amount (EUR 1,091,106 thousand) over the carrying amount (EUR 912,260 thousand) of EUR 178,846 thousand. Consequently, no impairment was recorded.\n\n#### <span id=\"page-77-0\"></span>**NOTE 9 – INVESTMENT PROPERTY**\n\n\"Investment property\" includes Group-owned buildings not occupied by the Group which are held to earn returns, either through rental or through capital appreciation and subsequent disposal of the buildings.\n\nAt the end of 2022 and 2023, the Group only has one industrial building in Italy classified as investment property. This industrial building was used for commercial activities and is currently leased to third parties. In addition, a few square metres at Acerinox's headquarters are also included as investment property.\n\nThe detail of the changes in investment property in 2023 and 2022 is as follows:\n\n{78}------------------------------------------------\n\nImage /page/78/Picture/9 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is positioned inside a partial circle, also in dark blue, that curves around the top and right side of the word. The background is white.\n\n(Amounts in thousands of euros)\n\n| COST                                            | 2023   | 2022   |\n|-------------------------------------------------|--------|--------|\n| Opening balance                                 | 12,700 | 18,145 |\n| Transfers                                       |        | -4,620 |\n| Disposals                                       |        | -825   |\n| Balance as of 31 December                       | 12,700 | 12,700 |\n| ACCUMULATED AMORTISATION AND<br>IMPAIRMENT LOSS | 2023   | 2022   |\n| Opening balance                                 | 2,784  | 4,930  |\n| Allocation                                      | 248    | 514    |\n| Transfers                                       |        | -2,036 |\n| Disposals                                       |        | -624   |\n| Balance as of 31 December                       | 3,032  | 2,784  |\n| NET VALUE                                       | 2023   | 2022   |\n| Cost at 31 December                             | 12,700 | 12,700 |\n| Accumulated amortisation and impairment losses  | -3,032 | -2,784 |\n| Carrying amount as of 31 December               | 9,668  | 9,916  |\n\nNo changes have taken place in this year.\n\nIn 2022, certain floors of the Group's head offices in Spain were reclassified from investment property to property, plant and equipment, as they were used by the Group itself and were no longer available for lease. Meanwhile, one of the buildings classified in this category, located in Spain, was sold with a net carrying amount of EUR 201 thousand. The proceeds from this sale amounted to EUR 1,443 thousand.\n\nTotal income from the lease of warehouses amounted to EUR 351 thousand in 2023 (2022: EUR 310 thousand). The associated operating expenses, including repair and maintenance expenses, amounted to EUR 101 thousand (2022: EUR 67 thousand).\n\nThe market value of all the investment property exceeded the carrying amount thereof and amounted to EUR 11,706 thousand at 31 December 2023 (2022: EUR 11,656 thousand). This valuation takes into account observable market variables such as offers and prices per square metre of premises available in the geographical area of the Group's investment property and, therefore, the determination of fair value is classified within the LEVEL 2 hierarchy in accordance with the policy established in **Note 2.12.5**.\n\n{79}------------------------------------------------\n\nImage /page/79/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is stacked vertically, with \"ACER\" on top and \"INOX\" below. The circle is thick and prominent, giving the logo a clean and modern appearance.\n\n#### <span id=\"page-79-0\"></span>**NOTE 10 – RIGHT-OF-USE ASSETS (LEASES)**\n\nThe detail of the right-of use assets, measured in accordance with the present value of future lease payments, and of the changes therein this financial year is as follows:\n\n(Amounts in thousands of euros)\n\n| COST                           | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant<br>and equipment | TOTAL  |\n|--------------------------------|-----------------------|------------------------|----------------------------------------------------|--------|\n| Balance as of 31 December 2021 | 11,216                | 6,415                  | 6,947                                              | 24,578 |\n| Additions                      | 929                   | 3,581                  | 2,924                                              | 7,434  |\n| Revaluations                   |                       | 909                    |                                                    | 909    |\n| Disposals                      | -1,530                | -632                   | -1,657                                             | -3,819 |\n| Translation differences        | -32                   | 5                      | 236                                                | 209    |\n| Balance as of 31 December 2022 | 10,567                | 10,278                 | 8,466                                              | 29,311 |\n| Additions                      | 4,261                 | 3,125                  | 1,923                                              | 9,309  |\n| Revaluations                   |                       |                        |                                                    | 0      |\n| Transfers                      | -2                    |                        | -815                                               | -817   |\n| Disposals                      | -97                   | -4,260                 | -945                                               | -5,302 |\n| Translation differences        | -74                   | 4                      | -196                                               | -266   |\n| Balance as of 31 December 2023 | 14,655                | 9,147                  | 8,433                                              | 32,235 |\n\n| ACCUMULATED AMORTISATION AND<br>IMPAIRMENT LOSS | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant<br>and equipment | TOTAL  |\n|-------------------------------------------------|-----------------------|------------------------|----------------------------------------------------|--------|\n| Balance as of 31 December 2021                  | 3,916                 | 3,350                  | 2,912                                              | 10,178 |\n| Allocation                                      | 1,845                 | 2,794                  | 2,395                                              | 7,034  |\n| Disposals                                       | -1,519                | -626                   | -1,637                                             | -3,782 |\n| Translation differences                         | -27                   | -2                     | -310                                               | -339   |\n| Balance as of 31 December 2022                  | 4,215                 | 5,518                  | 3,371                                              | 13,104 |\n| Allocation                                      | 1,873                 | 2,145                  | 2,128                                              | 6,146  |\n| Revaluations                                    |                       |                        |                                                    | 0      |\n| Transfers                                       |                       | 28                     | -553                                               | -525   |\n| Disposals                                       | -96                   | -4,260                 | -838                                               | -5,194 |\n| Translation differences                         | -62                   | 1                      | -86                                                | -147   |\n| Balance as of 31 December 2023                  | 5,930                 | 3,432                  | 4,022                                              | 13,384 |\n\n| NET VALUE                                      | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant<br>and equipment | TOTAL   |\n|------------------------------------------------|-----------------------|------------------------|----------------------------------------------------|---------|\n| Cost as of 31 December 2021                    | 11,216                | 6,415                  | 6,947                                              | 24,578  |\n| Accumulated amortisation and impairment losses | -3,916                | -3,350                 | -2,912                                             | -10,178 |\n| Carrying amount as of 31 December 2021         | 7,300                 | 3,065                  | 4,035                                              | 14,400  |\n| Cost as of 31 December 2022                    | 10,567                | 10,278                 | 8,466                                              | 29,311  |\n| Accumulated amortisation and impairment losses | -4,215                | -5,518                 | -3,371                                             | -13,104 |\n| Carrying amount as of 31 December 2022         | 6,352                 | 4,760                  | 5,095                                              | 16,207  |\n| Cost as of 31 December 2023                    | 14,655                | 9,147                  | 8,433                                              | 32,235  |\n| Accumulated amortisation and impairment losses | -5,930                | -3,432                 | -4,022                                             | -13,384 |\n| Carrying amount as of 31 December 2023         | 8,725                 | 5,715                  | 4,411                                              | 18,851  |\n\nThe borrowing costs on the lease liabilities recognised by the Group at 31 December 2023 amounted to EUR 508 thousand (2022: EUR 328 thousand).\n\nThe interest rate used is the interest rate implicit in the lease, or the lessee's incremental borrowing rate if the former is not practicable to determine.\n\nLease expenses for low value assets, short-term leases or contracts that do not qualify as leases in accordance with IFRS 16 and which are shown as \"operating expenses\" in the income statement amount to EUR 18,097 thousand (2022: EUR 15,735 thousand).\n\n{80}------------------------------------------------\n\nImage /page/80/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the top, creating a crescent shape around the word. The text is also in blue, matching the color of the circle.\n\nThe term of the Group's leases and the amount of the payments remaining as of 31 December 2023 are as follows:\n\n(Amounts in thousands of euros)\n\n|                    | 2023<br>Amount of future<br>payments | 2022<br>Amount of future<br>payments |\n|--------------------|--------------------------------------|--------------------------------------|\n| Up to 1 year       | 4,367                                | 4,785                                |\n| 1-5 years          | 10,181                               | 8,366                                |\n| 5-10 years         | 2,660                                | 905                                  |\n| More than 10 years | 1,615                                | 1,386                                |\n| TOTAL              | 18,823                               | 15,442                               |\n\nOf the total amount of future lease payments, EUR 4,367 thousand correspond to the short term and EUR 14,456 thousand to the long term (2022: EUR 4,785 thousand corresponding to the short term and EUR 10,657 thousand to the long term).\n\nThe amount of the leases exceeding ten years relates mainly to a plot of land that the Group company Inoxcenter, S.L.U. has leased to the consortium of the Barcelona free trade zone, on which the Group has constructed an industrial building owned by it.\n\nAt 31 December 2023, the balance of the lease liabilities was EUR 18,823 thousand, most of which were recognised under \"other non-current financial liabilities\" (2022: EUR 15,442 thousand).\n\n#### <span id=\"page-80-0\"></span>**NOTE 11 – INVENTORIES**\n\nThe detail of \"inventories\" in the consolidated statement of financial position as at 31 December is as follows:\n\n(Amounts in thousands of euros)\n\n|                                               | 2023      | 2022      |\n|-----------------------------------------------|-----------|-----------|\n| Raw materials and other supplies              | 439,205   | 547,965   |\n| Products in process                           | 673,544   | 714,171   |\n| Finished products                             | 582,896   | 695,494   |\n| By-products, wastes and recoverable materials | 164,890   | 197,912   |\n| TOTAL                                         | 1,860,535 | 2,155,542 |\n\nThe lower activity this year and the decrease in raw material prices have led to a decrease in inventories.\n\n\"Raw materials and other supplies\" includes EUR 54,736 thousand relating to the measurement of the emission allowances held by the Group at 2023 year-end (2022: EUR 44,233 thousand).\n\nThe changes in finished goods and work in progress in the year, according to the consolidated statements of financial position as at 31 December 2023 and 2022, shown above, differ from the figures recognised in the respective consolidated statements of profit or loss as a result of translation differences.\n\nThe cost of goods sold was calculated in accordance with the policy defined in **Note 2.13** and amounted to EUR 5,704 million in 2023 (2022: EUR 6,981 million).\n\nAt the close of 2023, the Group recognised an adjustment of EUR 64,630 thousand in order to measure its inventories at net realisable value where this was lower than cost. An adjustment of EUR 97,618 thousand was recognised in 2022.\n\n#### **Obligations and commitments**\n\nAt 31 December 2023, the Consolidated Group had commitments to purchase raw materials amounting to EUR 240,579 thousand (2022: EUR 271,850 thousand). At the same date, there are no firm sales commitments, but there are formalised orders, for which the Group anticipates no circumstances that would prevent their delivery within the agreed deadlines.\n\nThe Group does not have any inventories with a cycle exceeding one year and, therefore, no borrowing costs were capitalised in this connection.\n\n{81}------------------------------------------------\n\nImage /page/81/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue, circular shape that is open on the left side. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the lighter blue of the surrounding circle. The circle appears to be a thick line or band that curves around the text, creating a sense of enclosure and unity.\n\nThe Group companies have taken out several insurance policies to cover the risks to which their inventories are subject. It is considered that these policies sufficiently cover such risks.\n\n#### **11.1 Emission allowances**\n\nThe Group recognises emission allowances as inventories.\n\nOn 13 July 2021, an agreement was approved determining the final free allocation of greenhouse gas emission allowances to Spanish entities subject to the allowance trading system for the period 2021-2025. Phase IV of the European Union Emissions Trading Scheme covers the years 2021-2030 and is divided into two allocation periods 2021-2025 and 2026-2030.\n\nThe yearly distribution of the allowances allocated to the Spanish Group companies is detailed below:\n\n| 2021    | 2022    | 2023    | 2024    | 2025    |\n|---------|---------|---------|---------|---------|\n| 195,244 | 195,244 | 195,244 | 195,244 | 195,244 |\n\nThe VDM Metals Group entity also holds CO<sup>2</sup> emission allowances. The allocations obtained by VDM free of charge fall short of the plants' requirements, and it is therefore necessary to acquire allowances on the market. The Company recognises the allowances acquired at acquisition cost and for no consideration under \"grants\". In view of the significant price increase and future forecasts, the Group decided in 2022 to acquire 100% of the rights that it expects to use until 2023, thus hedging against price fluctuations. This purchase was made at very competitive prices and well below quotations in 2023. During the year, the Group has systematically monitored price changes and taken advantage of opportunities to meet its consumption needs for the year ahead. VDM currently has sufficient allowances to cover its 2024 needs.\n\nThe changes in emission allowances in 2023 and 2022 were as follows:\n\n|                         | Number of<br>allowances | Value (in<br>thousands of<br>euros) |\n|-------------------------|-------------------------|-------------------------------------|\n| Balance at 31/12/2021   | 1,292,002               | 34,746                              |\n| Allocation for the year | 223,773                 | 18,692                              |\n| Procurements            | 29,187                  | 1,195                               |\n| Swap                    |                         |                                     |\n| Disposals               | -361,957                | -10,400                             |\n| Balance at 31/12/2022   | 1,183,005               | 44,233                              |\n| Allocation for the year | 224,756                 | 18,680                              |\n| Procurements            | 72,806                  | 4,824                               |\n| Sale                    | -290                    | -6                                  |\n| Disposals               | -305,135                | -12,995                             |\n| Balance at 31/12/2023   | 1,175,142               | 54,736                              |\n\nAs shown in the table, the Group has sufficient surplus rights to cover its long-term needs, so no provision needs to be recorded.\n\n288,939 CO<sup>2</sup> emission allowances were used in 2023, and these allowances will be surrendered to the public authorities in 2024 (2022: 306,680, surrendered in 2023). The Group has not sold its surplus allowances.\n\nThe expense for the year in respect of CO<sup>2</sup> emissions totalled EUR 14,427 thousand in 2023 (2022: EUR 12,699 thousand) and is included under \"other operating expenses\". This expense is equal to the value allocated to the allowances used in the year, which is the market value of these allowances when allocated.\n\nDisposals for the year related to CO<sup>2</sup> emission allowances used in the previous year audited and approved by an independent expert.\n\nGreenhouse gas emissions are verified each year by an ISO 14064-accredited external body. In addition, both Acerinox Europa and VDM are included in the EU Emissions Trading System (EU ETS).\n\n{82}------------------------------------------------\n\nImage /page/82/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word \"ACERINOX\" is in a darker shade of blue than the circle.\n\nDuring this year, CO<sup>2</sup> allowance prices have remained stable at the levels reached in 2022. The increase in the price of allowances last year, from an average price of EUR 25/allowance in 2021 to EUR 80 at the end of 2022, had little impact on the Group as the Spanish plants have sufficient allowances allocated to cover their needs. As described in the accounting policy in **Note 2.13.1**, any increase in the price of rights allocated free of charge will be offset by grant income, thus not affecting the Group's income statement. There were no significant variations this year.\n\nThe Group does not trade in CO<sup>2</sup> emission allowances; it merely acquires those required for internal use, as necessary. The Group does not hold any futures contracts for the acquisition of emission allowances.\n\nThere are no significant contingencies for emission-related fines.\n\n#### <span id=\"page-82-0\"></span>**NOTE 12 – FINANCIAL INSTRUMENTS**\n\n#### **12.1 General considerations**\n\nA financial instrument is a contract that gives rise to a financial asset at one company and, simultaneously, a financial liability or an equity instrument at another. The Group recognises a financial instrument in its consolidated statement of financial position when it becomes party to the contract or legal transaction.\n\n{83}------------------------------------------------\n\n#### **12.2 Categories of financial assets and liabilities**\n\n#### At year-end the Group's financial assets were as follows:\n\n(Amounts in thousands of euros)\n\n| Class                                                     | Long-term financial instruments |      |                 |      |                              |        | Short-term financial instruments |      |                 |      |                              |         |\n|-----------------------------------------------------------|---------------------------------|------|-----------------|------|------------------------------|--------|----------------------------------|------|-----------------|------|------------------------------|---------|\n|                                                           | Equity instruments              |      | Debt securities |      | Loans, derivatives and other |        | Equity instruments               |      | Debt securities |      | Loans, derivatives and other |         |\n| Category                                                  | 2023                            | 2022 | 2023            | 2022 | 2023                         | 2022   | 2023                             | 2022 | 2023            | 2022 | 2023                         | 2022    |\n| Loans and receivables                                     |                                 |      |                 |      | 5,221                        | 4,533  |                                  |      |                 |      | 632,610                      | 642,392 |\n| Held-to-maturity investments                              |                                 |      |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| Equity instruments:                                       |                                 |      |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| - Valued at fair value through other comprehensive income |                                 |      |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| - Valued at cost                                          | 381                             | 394  |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| Assets at fair value through profit or loss               |                                 |      |                 |      | 10                           | 115    |                                  |      |                 |      | 4,351                        | 5,219   |\n| Hedging derivatives                                       |                                 |      |                 |      | 9,000                        | 25,540 |                                  |      |                 |      | 16,995                       | 41,756  |\n| TOTAL                                                     | 381                             | 394  | 0               | 0    | 14,231                       | 30,188 | 0                                | 0    | 0               | 0    | 653,956                      | 689,367 |\n\nAt year-end the Group's financial liabilities were as follows:\n\n(Amounts in thousands of euros)\n\n| Class                                            | Long-term financial instruments |           |                                       |        |                        |        | Short-term financial instruments |         |                                       |       |                        |           |\n|--------------------------------------------------|---------------------------------|-----------|---------------------------------------|--------|------------------------|--------|----------------------------------|---------|---------------------------------------|-------|------------------------|-----------|\n|                                                  | Bank borrowings                 |           | Bonds and other marketable securities |        | Derivatives and others |        | Bank borrowings                  |         | Bonds and other marketable securities |       | Derivatives and others |           |\n| Category                                         | 2023                            | 2022      | 2023                                  | 2022   | 2023                   | 2022   | 2023                             | 2022    | 2023                                  | 2022  | 2023                   | 2022      |\n| Financial liabilities at amortised cost          | 1,291,155                       | 1,319,182 | 74,850                                |        | 18,284                 | 14,777 | 767,147                          | 592,858 | 76,584                                | 1,634 | 1,028,386              | 1,269,353 |\n| Liabilities at fair value through profit or loss |                                 |           |                                       |        | 206                    | 194    |                                  |         |                                       |       | 6,857                  | 12,367    |\n| Hedging derivatives                              |                                 |           |                                       |        | 1,309                  |        |                                  |         |                                       |       | 10,872                 | 12,637    |\n| TOTAL                                            | 1,291,155                       | 1,319,182 | 0                                     | 74,850 | 19,799                 | 14,971 | 767,147                          | 592,858 | 76,584                                | 1,634 | 1,046,115              | 1,294,357 |\n\n{84}------------------------------------------------\n\nImage /page/84/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the word. The word \"ACERINOX\" is in a bold, sans-serif font.\n\n#### **12.2.1 Financial assets at amortised cost**\n\nThe detail of the financial assets measured at amortised cost at 31 December is as follows:\n\n(Amounts in thousands of euros)\n\n|                                    | 2023    | 2022    |\n|------------------------------------|---------|---------|\n| Customers                          | 560,002 | 575,036 |\n| Debts with personnel               | 1,624   | 1,737   |\n| Public Administrations             | 17,190  | 33,252  |\n| Other debtors                      | 29,426  | 17,685  |\n| Accruals and deferrals             | 22,139  | 14,990  |\n| Deposits and bonds                 | 69      | 103     |\n| Other financial assets             | 6,267   | 4,457   |\n| Write-downs of uncollectible debts | -4,107  | -4,868  |\n| TOTAL                              | 632,610 | 642,392 |\n\nThe amount recognised as tax receivables from Public Administrations relates mainly to VAT settlements.\n\nDuring the year, variations have not been significant, as activity levels have remained similar to those of the last quarter of the previous year.\n\nAs explained in the accounting policies, the Group measures accounts receivable at their transaction price, provided that they do not have a significant financial component, they are expected to be received in the short-term and the effect of not discounting the cash flows is not material. The Group does not have any non-current balances receivable.\n\nWrite-downs of uncollectible debts relate in full to trade receivables. The changes therein were as follows:\n\n| (Amounts in thousands of euros) |       |        |\n|---------------------------------|-------|--------|\n|                                 | 2023  | 2022   |\n| Opening balance                 | 4,868 | 5,051  |\n| Allocation                      | 543   | 86     |\n| Application                     | -706  | -17    |\n| Reversion                       | -533  | -1,111 |\n| Translation differences         | -65   | 24     |\n| Balance as of 31 December       | 4,107 | 4,86   |\n\nChanges in the balance of valuation adjustments are included under \"other operating expenses\" on the statement of profit and loss.\n\nNo interest was earned on impaired financial assets in 2023 or 2022.\n\nNo valuation adjustments were recognised for uncollectible receivables from related parties in 2023 or 2022.\n\nAt 31 December 2023, certain Group companies had receivables amounting to EUR 297,025 thousand factored on a nonrecourse basis to banks in exchange for cash (2022: EUR 329,327 thousand). The factored amounts were derecognised as they met the conditions specified in IFRS 9 regarding the transfer of risks and rewards.\n\n**Note 12.2.3** includes a detail of the Group's factoring lines.\n\n#### **12.2.2 Trade and other payables**\n\nThe detail of \"trade and other payables\" in the consolidated statements of financial position as at 31 December 2023 and 2022 is as follows:\n\n{85}------------------------------------------------\n\nImage /page/85/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The text is positioned within a partial blue circle that curves around the right side and bottom of the word. The background is white.\n\n(Amounts in thousands of euros)\n\n|                                               | 2023    | 2022      |\n|-----------------------------------------------|---------|-----------|\n| Suppliers and creditors for services rendered | 794,921 | 1,021,284 |\n| Debts with personnel                          | 73,868  | 74,782    |\n| Suppliers of fixed assets                     | 19,794  | 21,342    |\n| Taxes and Social Security                     | 34,646  | 33,876    |\n| Other creditors                               | 7,462   | 7,529     |\n| Current provisions                            | 20,427  | 22,627    |\n| TOTAL                                         | 951,118 | 1,181,440 |\n\nMost of the amount included under tax and social security payables relates to amounts payable for VAT settlements and personal income tax withholdings. EUR 4,565 thousand relate to social security payables (2022: EUR 4,131 thousand).\n\nAs with customers, the decrease in suppliers and service creditors is mainly due to lower activity this year, lower raw material prices and lower payment terms for suppliers in the area of high-performance alloys due to the diversification of suppliers, which eliminates dependence on raw material sources from Russia.\n\nWith regard to the average payment period, as established in Law 18/2022 of 29 September on the establishment and growth of companies the Group breaks down below the average payment period for suppliers, the volume of money and the number of invoices paid in a period lower than the maximum established in the regulations on late payments, as well as the percentage of these invoices in the total number of invoices and in the total amount of money paid to their suppliers for the Group's Spanish companies included in the scope of consolidation.\n\nThe following table includes the average payment period to domestic and foreign suppliers of the Spanish companies that form part of the Acerinox Group, after deducting payments made to Group companies:\n\n|                                       | 2023      | 2022      |\n|---------------------------------------|-----------|-----------|\n|                                       | Days      | Days      |\n| Average supplier payment period       | 64 days   | 63 days   |\n| Ration of operations settled          | 62 days   | 62 days   |\n| Ratio of transactions pending payment | 81 days   | 80 days   |\n|                                       | Amount    | Amount    |\n| Total payments made                   | 2,363,976 | 2,384,319 |\n| Total outstanding payments            | 189,493   | 189,759   |\n\nDetails of the volume and number of invoices paid are as follows:\n\n|                                                                                                                                         | 2023      | 2022      |\n|-----------------------------------------------------------------------------------------------------------------------------------------|-----------|-----------|\n| a) Monetary volume of invoices paid within a period equal to or less than the maximum established in the<br>regulations on late payment | 1,114,046 | 1,129,490 |\n| Percentage share of total number of invoices of payments to its suppliers                                                               | 47 %      | 47 %      |\n| b) Number of invoices paid within a period equal to or less than the maximum period established in the late<br>payment regulations      | 23,427    | 22,172    |\n| Percentage share of total monetary payments to its suppliers                                                                            | 41 %      | 40 %      |\n\nThe table includes, the same as above, the payments made to any supplier, whether domestic or foreign, and excludes Group companies.\n\n#### **12.2.3 Bank borrowings and bonds issued**\n\nThe detail of the financial debt line items in the consolidated statements of financial position as at 31 December 2023 and 2022, including both bank borrowings and bonds issued by the Group in the year, is as follows:\n\n(Amounts in thousands of euros)\n\n|                                | Non-current |           | Current |         |\n|--------------------------------|-------------|-----------|---------|---------|\n|                                | 2023        | 2022      | 2023    | 2022    |\n| Bonds issued                   |             | 74,850    | 76,584  | 1,634   |\n| Loans from credit institutions | 1,291,156   | 1,319,182 | 767,147 | 592,858 |\n| Total non-current debt         | 1,291,156   | 1,394,032 | 843,731 | 594,492 |\n\n{86}------------------------------------------------\n\nImage /page/86/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is positioned inside a blue circle that is open on the left side.\n\nThere is currently a private placement of EUR 75 million performed by Deutsche Bank AG, London Branch in July 2014, which has a term of ten years.\n\nThe detail of the maturity of the outstanding debt at 31 December 2023 is as follows:\n\n(Amounts in thousands of euros)\n\n|                      | 2024    | 2025    | 2026    | 2027    | 2028 and<br>thereafter | TOTAL     |\n|----------------------|---------|---------|---------|---------|------------------------|-----------|\n| Financial debts      | 843,731 | 521,323 | 400,771 | 260,587 | 108,475                | 2,134,887 |\n| Total financial debt | 843,731 | 521,323 | 400,771 | 260,587 | 108,475                | 2,134,887 |\n\nThe 2022 figures were as follows:\n\n(Amounts in thousands of euros)\n\n|                      | 2023    | 2024    | 2025    | 2026    | 2027 and<br>thereafter | TOTAL     |\n|----------------------|---------|---------|---------|---------|------------------------|-----------|\n| Financial debts      | 594,492 | 258,271 | 471,171 | 398,271 | 266,319                | 1,988,524 |\n| Total financial debt | 594,492 | 258,271 | 471,171 | 398,271 | 266,319                | 1,988,524 |\n\nThe breakdown of the debt by currency is as follows:\n\n(Amounts in thousands of euros)\n\n|       | Non-current payables |           | Current liabilities |         |\n|-------|----------------------|-----------|---------------------|---------|\n|       | 2023                 | 2022      | 2023                | 2022    |\n| EUR   | 1,291,156            | 1,394,032 | 625,054             | 476,017 |\n| USD   |                      |           | 122,448             | 43,667  |\n| ZAR   |                      |           | 96,229              | 74,808  |\n| TOTAL | 1,291,156            | 1,394,032 | 843,731             | 594,492 |\n\nThe breakdown of the debt by interest rate is as follows:\n\n(Amounts in thousands of euros)\n\n|          | Non-current payables |           | Current liabilities |         |\n|----------|----------------------|-----------|---------------------|---------|\n|          | 2023                 | 2022      | 2023                | 2022    |\n| Fixed    | 483,753              | 665,523   | 181,771             | 67,637  |\n| Variable | 807,403              | 728,509   | 661,960             | 526,855 |\n| TOTAL    | 1,291,156            | 1,394,032 | 843,731             | 594,492 |\n\nFixed-rate debt solely includes borrowings originally arranged at fixed rates (bank loans and private placements) and does not include borrowings for which interest rates have been fixed by arranging derivatives.\n\nThere are swap contracts to hedge the interest rate for EUR 430 million of the variable rate debt (**Note 12.2.6**).\n\nThe fair value of fixed-rate bank borrowings and private placements was EUR 665,523 thousand at 31 December 2023, and their carrying amount was EUR 650,865 thousand. The fair value of these borrowings at 31 December 2022 amounted to EUR 702,010 thousand (carrying amount of EUR 733,160 thousand).\n\nFor the determination of fair value, the Group has taken into account observable market variables such as interest rate curves, the term of the loans, etc., so the determination of fair value is classified within the LEVEL 2 hierarchy in accordance with the policy established in **Note 2.12.5**.\n\nThe interest rates of the floating-rate loans are reviewed at least once a year.\n\nThe weighted average cost of the financing instruments in euros (including interest rate hedges) at the end of 2023 was 2.77% for a total of EUR 1,916 million, 7.37% for USD 135.3 million of financing and 11% for ZAR 1,976 million of financing. In 2022, the cost of the loans (including the interest rate hedges) in euros was 1.69% for an amount of EUR 1,870 million, 6.30% for USD 46.5 million and 9.34% for ZAR 1,358 million of financing.\n\n{87}------------------------------------------------\n\nImage /page/87/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle that is not fully closed, creating a crescent shape around the text. The overall design is simple and corporate, with a focus on the company name.\n\nAt 31 December 2023, accrued interest payable on bank borrowings amounted to EUR 11,081 thousand (2022: EUR 6,164 thousand). In addition, accrued interest payable on bonds issued amounted to EUR 1,634 thousand at 2023 year-end (2022 year-end: EUR 1,634 thousand).\n\nThe total borrowing costs calculated using the effective interest rate on long-term loans at amortised cost amounted to EUR 871 thousand (2022: EUR 1,465 thousand).\n\nAt 31 December 2023, the Acerinox Group had arranged bank financing facilities and private placements amounting to EUR 2,807 million (31 December 2022: EUR 2,786 million), in addition to approved non-recourse factoring facilities amounting to EUR 530 million (31 December 2022: EUR 480 million). The amount drawn down on financing facilities at 31 December 2023 amounted to EUR 2,135 million (31 December 2022: EUR 1,989 million) and EUR 297 million on factoring facilities (31 December 2022: 329 million).\n\nCertain Group companies have arranged reverse factoring facilities with various banks to manage payments to suppliers. Trade payables payment of which is managed by the banks are recognised under \"trade and other payables\" until the related obligation is discharged or cancelled or expires. The Group uses reverse factoring solely as a payment instrument, but offers its suppliers the possibility of obtaining financing through such instruments. As far as the Acerinox Group is concerned, invoices are paid when they fall due. In some specific cases, where an extension of the payment term has been agreed with the financial company, the debt is classified as other financial liabilities. In this financial year, the Group did not reclassify any amounts as there was no extension of payments (2022: EUR 13,113 thousand).\n\n#### **Main financing transactions undertaken in the year**\n\nThe most significant financing transactions in 2023 were as follows:\n\n- Signing of the Syndicated Factoring contract in Spain between several subsidiaries of the Acerinox Group, including, for the first time, VDM Metals International as the new transferor, and Unicaja as the new transferee from among the existing ones (Abanca, BBVA, Banca March, Banco Sabadell, Bankinter, Banque Marocaine du Commerce Extérieur International, Caixabank and Santander Factoring and Confirming) for a total amount of EUR 380 million until 2025. The agent and structuring agent for the transaction continues to be Santander Factoring and Confirming\n- In August 2023, the \"Borrowing Base Facility\" contract of Columbus Stainless Pty Ltd. in South Africa was restructured and extended for ZAR 3,500 million. This deal, originally signed in April 2015 and renewed in 2017 for a further two and a half years, and in 2019 for a further three and a half years, has been extended to 2027, including some modifications to its structure to provide Columbus with greater flexibility. Participating entities include Deutsche Bank AG, Johannesburg Branch, Bankinter S.A., Banco Bilbao Vizcaya Argentaria S.A., FirstRand Bank Limited, Banco Santander S.A., Banco de Sabadell S.A. London Branch, Caixabank S.A., Investec Bank Limited, Nedbank Limited and HSBC Bank Plc Johannesburg. The agent and Co-ordinating Mandated Lead Arranger for the transaction continues to be Deutsche Bank AG, Amsterdam Branch\n- In order to ensure continued Group liquidity, credit facilities were renewed in both euros (EUR 301 million) and dollars (USD 135 million)\n- Signing of four new long-term floating rate loans in Spain for a total amount of EUR 105 million with: Kutxabank (EUR 15 million), Intesa Sanpaolo (EUR 65 million), Caja rural del Sur (EUR 10 million) and Banca March (EUR 15 million)\n- In addition, Acerinox Europa has signed a one-year floating-rate loan with BBVA for EUR 50 million\n- VDM has extended the maturity of five bilateral financing facilities for an additional year until 2025 with HSBC, Unicredit, BBVA, Santander and Caixabank for a total maximum amount of EUR 210 million. In addition, it has extended the long-term loan contracted with Intesa Sanpaolo in the amount of EUR 30 million until the end of 2024.\n- Increase in Bahru's short-term financing facilities (credit facilities and revolving credit facilities) to a maximum of USD 145 million.\n\nRegarding debt renegotiations, the Group assessed the significance of the modifications made to determine whether they were substantially different, in accordance with the criteria established in the accounting policy defined in **Note 2.12.3**, and, where\n\n{88}------------------------------------------------\n\nImage /page/88/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, leaving a small gap at the top. The word \"ACERINOX\" is in a dark color, likely black or a very dark blue, which contrasts with the white background.\n\nappropriate, determine whether to recognise the effects of certain of the new agreements as an extinguishment and the simultaneous recognition of a new loan. No debt refinancing took place during the year. In 2022, the amount of fees and commissions recognised in income in this connection amounted to EUR 557 thousand.\n\nThe most noteworthy financing transactions in 2022 were as follows:\n\n- In order to ensure continued Group liquidity, the following transactions were carried out:\n\t- The renewal of credit facilities in euros for a total amount of EUR 256 million, increasing the amount of some of them by EUR 55 million\n\t- Signing of three new euro credit facilities totalling EUR 45 million with Abanca, Unicaja and Cajamar Caja Rural\n\t- Signing of new credit facilities in US dollars and renewal of existing ones for a total amount of USD 135 million\n- Novation of the loan signed in 2020 with Caixabank for EUR 80 million, with final maturity in 2025, increasing the capital to EUR 260 million and extending its final maturity to 2027. To this end, the two loans signed with Bankia and Caixabank for amounts of EUR 160 million and EUR 50 million, respectively, with final maturity in 2024, have been cancelled\n- Signing of five new long-term loans: a fixed-rate loan of EUR 50 million with Unicredit with a final maturity of 4 years and four variable-rate loans, one with Abanca for EUR 40 million with a final maturity of 4 years; another with Bankinter for a total amount of EUR 25 million with a final maturity of 3 years; another with Kutxabank for EUR 15 million with a final maturity of 4 years; and another with Banca March for EUR 15 million with a final maturity of 5 years\n- Signing of seven bilateral financing facilities for VDM with HSBC, Banco Santander, Caixabank, Deutsche Bank, Helaba, Unicredit and BBVA for a maximum amount of up to EUR 290 million and a long-term loan with IKB for a total amount of EUR 50 million. All of these transactions replaced the syndicated revolving credit facility, which expired in 2022, and the financial covenants linked to the development of the company's results were cancelled\n- Renegotiation of the long-term loan of EUR 60 million arranged with Banco de Crédito Social Cooperativo, whereby the conditions were improved by increasing the loan principal by EUR 20 million and extending the final maturity to 2026\n- Increase in the financing facilities for the issuance of import letters of credit by more than EUR 100 million.\n\nThe Acerinox Group has satisfactorily met the repayment schedules for its borrowings.\n\nThe detail of the changes in non-current bank borrowings, not including bond issues, is as follows:\n\n(Amounts in thousands of euros)\n\n|                                          | Non-current payables |           | Current liabilities |          |\n|------------------------------------------|----------------------|-----------|---------------------|----------|\n|                                          | 2023                 | 2022      | 2023                | 2022     |\n| Opening balance                          | 1,319,182            | 1,293,494 | 592,858             | 483,271  |\n| Additions                                | 138,203              | 663,456   | 250,993             | 364,417  |\n| Debt repayment                           | -16,214              | -448,869  | -224,839            | -453,495 |\n| Interest at amortised cost               | 871                  | 1,465     | 4,998               | 4,403    |\n| Short-term transfers                     | -152,923             | -193,952  | 152,923             | 193,952  |\n| Transfers of other financial liabilities | 2,037                |           |                     |          |\n| Translation differences and others       |                      | 3,588     | -9,786              | 310      |\n| Balance as of 31 December                | 1,291,156            | 1,319,182 | 767,147             | 592,858  |\n\nThe reconciliation of the changes in non-current and current borrowings to the consolidated statement of cash flows is as follows:\n\n• The detail of income from borrowings recognised in the consolidated statement of cash flows is as follows:\n\n(Amounts in thousands of euros)\n\n{89}------------------------------------------------\n\nImage /page/89/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, dark blue letters. The letters are slightly slanted to the right. The word is enclosed within a partial circle, also in dark blue, that surrounds the top and sides of the word. The bottom of the circle is open.\n\n|                                  | 2023    | 2022      |\n|----------------------------------|---------|-----------|\n| Capital grants                   | 328     | -3        |\n| Long-term bank borrowings        | 138,202 | 663,456   |\n| Short-term bank borrowings       | 250,993 | 364,417   |\n| Other debts (capital leases)     | 3,164   | 870       |\n| Total income from borrowed funds | 392,687 | 1,028,740 |\n\n• The breakdown of the debt repayments recognised in the consolidated statement of cash flows is as follows:\n\n| (Amounts in thousands of euros) |\n|---------------------------------|\n|---------------------------------|\n\n|                                                 | 2023     | 2022     |\n|-------------------------------------------------|----------|----------|\n| Long-term bank borrowings                       | -16,214  | -448,869 |\n| Short-term bank borrowings                      | -224,839 | -453,495 |\n| Other debts (capital leases)                    | -5,554   | -6,557   |\n| Total repayment of interest-bearing liabilities | -246,607 | -908,921 |\n\n**Non-current borrowings subject to achievement of ratios**\n\n*Currently, no loan agreement entered into by the Acerinox Group contains covenants linked to ratios related to the Group's results.* The contracts subject to covenants are generally related to own funds, either of the consolidated group or own funds of the borrower and are detailed below:\n\n#### **a) Acerinox, S.A.:**\n\nThe EUR 260 million loan novated in the first half of 2022 with Caixabank and the two loans of EUR 80 million each signed with BBVA and ICO in the first half of 2020 for the acquisition of VDM are subject to compliance with the financial ratios relating to the maintenance of minimum equity levels at the consolidated level.\n\nIn addition to these three loans, there are three other financing contracts conditional on compliance with covenants also referring to the maintenance of minimum levels of own funds at consolidated level. The loan arranged in March 2017 and novated in December 2021 with Banca March for EUR 50 million and assigned to a Securitisation Fund upon arrangement, the loan arranged with the European Investment Bank (\"EIB\") in December 2017 for EUR 70 million and the loan arranged in March 2018 with the Instituto de Crédito Oficial (\"ICO\") for EUR 100 million. This type of covenant is standard market practice in financing with these maturities, as the loan arranged with Banca March had an initial term of seven years, the EIB loan of ten years and the ICO loan of eight years.\n\n#### **b) Columbus Stainless (PTY) LTD:**\n\nAdditionally, the Group company Columbus Stainless has structured financing (a Borrowing Base Facility) which is also subject to the achievement of a covenant relating to the maintenance of minimum equity levels at that Company. This financing facility is recognised under \"bank borrowings\" in the consolidated statement of financial position at the amount drawn down. At 31 December 2023, the amount drawn down from this financing amounts to ZAR 1,976 million (around EUR 97 million at the exchange rate of 31 December 2023). At 2022 year-end, ZAR 1,358 million had been drawn down from this credit facility.\n\n#### **c) VDM Group:**\n\nFinally, it should be noted that the eight bilateral financing facilities signed by VDM (both the long-term loan with IKB and the seven financing lines signed with HSBC, Banco Santander, Caixabank, Deutsche Bank, Helaba, Unicredit and BBVA) are subject to compliance with minimum equity ratios and a ratio of net financial debt to working capital.\n\nAt 2023 year-end (as in 2022), Acerinox, S.A., Columbus Stainless (PTY) Ltd. and the VDM Group had achieved all the covenants required under the aforementioned agreements with a considerable margin.\n\n#### **12.2.4 Fair value measurement**\n\nAs established in the accounting policies, the Group measures the following assets at fair value: financial assets classified at fair value through other comprehensive income and derivative financial instruments.\n\nFinancial instruments recognised at fair value are classified, based on the valuation inputs, in the following hierarchies:/\n\n LEVEL 1: quoted prices in active markets LEVEL 2: observable market variables other than quoted prices\n\n{90}------------------------------------------------\n\nImage /page/90/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is blue. The text is positioned inside a blue circle that is open at the top.\n\n#### LEVEL 3: variables not observable in the market\n\nThe Group's position at 31 December 2023 and 2022 was as follows:\n\n(Amounts in thousands of euros)\n\n|                                     | 2023    |         |         | 2022    |         |         |\n|-------------------------------------|---------|---------|---------|---------|---------|---------|\n|                                     | LEVEL 1 | LEVEL 2 | LEVEL 3 | LEVEL 1 | LEVEL 2 | LEVEL 3 |\n| Financial derivatives (assets)      |         | 30,356  |         |         | 72,630  |         |\n| TOTAL                               | 0       | 30,356  | 0       | 0       | 72,630  | 0       |\n|                                     | LEVEL 1 | LEVEL 2 | LEVEL 3 | LEVEL 1 | LEVEL 2 | LEVEL 3 |\n| Financial derivatives (liabilities) |         | 19,244  |         |         | 25,198  |         |\n\nNo financial assets or financial liabilities measured at fair value were transferred between levels.\n\nIn the case of Level 2 financial instruments, the Group uses generally accepted valuation techniques that take into account spot and future exchange rates at the measurement date, forward interest rates, interest rate spreads and credit risk of both the Group and its counterparty, i.e. the financial institutions with which it operates. In determining the fair values of commodity future contracts quoted on the LME (London Metal Exchange), the Group takes into account the difference between the future prices quoted on the LME for the commodity at the contracted maturity date and the future price set in each contract.\n\n#### **12.2.5 Financial assets at fair value through other comprehensive income**\n\nThis section includes the shares that the Group does not intend to sell and that it had designated in this category on initial recognition.\n\nThe value of financial assets at fair value through other comprehensive income at year-end amounted to EUR 381 thousand (31 December 2022: EUR 394 thousand).\n\nThe Group has classified in this category its 8.48% minority shareholding in the company Fortia Energía, S.L., whose corporate purpose is the acquisition of electricity on behalf of its shareholders. This investment enables the Group's Spanish factories to obtain more competitive electricity prices. The investment is measured at acquisition cost, as there are insufficient data to measure it at fair value. The Group has no control over this entity. The acquisition cost of the investment was EUR 276 thousand. The Group does not consider that there are any indications of impairment in this connection.\n\nThis category also includes the investment made by Columbus, Pty. Ltd in the entity Nimawize Pty Ltd. Columbus acquired a 20% stake in 2020 in compliance with the requirements of the Broad-Based Black Economic Empowerment (B-BBEE Act 53 of 2023). Columbus does not exercise any control over this entity.\n\nOn 7 July 2022, the Group sold its shares in the listed Japanese company Nippon Steel & Sumitomo Metal Corporation for EUR 10,157 thousand. Acerinox, S.A. held 747,346 shares in this company, which represented a scantly significant percentage of ownership in the Japanese Group. The shares, prior to their sale, were valued at fair value. As they are classified as assets at fair value through other comprehensive income, the gains on their sale amounting to EUR 1,070 thousand were classified through equity. The revaluation, recognised in other comprehensive income until its sale, amounted to EUR -572 thousand.\n\n#### **12.2.6 Derivative financial instruments**\n\nAs detailed in **Note 4**, in relation to market risk, the Group is essentially exposed to the following three types of risk in the course of its business activities: foreign currency risk, interest rate risk and raw material price risk. The Group uses derivative financial instruments to hedge its exposure to certain risks.\n\nThe Group classifies derivative financial instruments that do not qualify for hedge accounting in the category of assets and liabilities measured at fair value through profit or loss. Those that qualify as hedging instruments are classified as hedging derivatives and are accounted for by applying the accounting policy defined in **Note 2.12.4**.\n\n{91}------------------------------------------------\n\nImage /page/91/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters slightly slanted to the right. The word is positioned inside a blue circle that is not fully closed, creating a crescent shape around the text. The blue color of the circle is a deep, saturated shade.\n\nThe detail of the derivative financial instruments, classified by category, is as follows:\n\n| (Amounts in thousands of euros)                  |        |             |        |             |\n|--------------------------------------------------|--------|-------------|--------|-------------|\n|                                                  | 2023   |             | 2022   |             |\n|                                                  | Assets | Liabilities | Assets | Liabilities |\n| Hedging derivatives                              | 25,995 | 12,181      | 67,296 | 12,637      |\n| Derivatives at fair value through profit or loss | 4,361  | 7,063       | 5,334  | 12,561      |\n| TOTAL                                            | 30,356 | 19,244      | 72,630 | 25,198      |\n\nThe following table provides a breakdown of the Group's derivative financial instruments at 31 December 2023 and 2022 by type of hedged risk:\n\n(Amounts in thousands of euros)\n\n|                             | 2023   |             | 2022   |             |\n|-----------------------------|--------|-------------|--------|-------------|\n|                             | Assets | Liabilities | Assets | Liabilities |\n| Currency forwards           | 4,361  | 7,063       | 5,331  | 12,561      |\n| Interest rate swaps         | 21,358 |             | 34,305 |             |\n| Commodity futures contracts | 4,637  | 12,181      | 32,994 | 12,637      |\n| TOTAL                       | 30,356 | 19,244      | 72,630 | 25,198      |\n\n#### **Foreign currency risk**\n\nThe Group operates in a large number of countries and bills customers in various currencies, depending on the country where it is billing. It therefore arranges certain financial instruments to hedge cash flow risks arising from the settlement of balances in foreign currencies. The transactions arranged consist mainly of foreign currency purchase and sale forward contracts.\n\nThe Group uses derivative financial instruments to hedge most of its commercial and financial transactions performed in currencies other than the functional currency of each country.\n\nThe Company's business model is to hedge foreign currency risk through the use of derivative financial instruments and there is an economic relationship between the hedged item and the hedging instrument. The Group classifies most of its foreign exchange insurance contracts in the category of financial instruments at fair value through profit or loss.\n\nUsing these instruments ensures that any fluctuation in exchange rates that could affect assets or liabilities denominated in foreign currency would be offset by a change of the same amount in the derivative arranged. Changes in the derivative are recognised in profit or loss, offsetting any changes that occur in foreign currency monetary items. As these derivatives do not qualify as cash flow hedging instruments for accounting purposes, the revaluation of these derivatives is recorded in the consolidated statement of profit or loss \"revaluation of financial instruments at fair value\".\n\nAt 31 December 2023, the effect on profit or loss of measuring these derivatives at market value was positive, amounting to EUR 317 thousand (2022: EUR -3,141 thousand). The positive exchange differences of the Group in the year amounted to EUR 2,273 thousand (2022: loss of EUR -4,624 thousand). The differences between the two amounts are mainly due to the interest rate differences between the currencies involved in the exchange rate insurance taken out and the differences between the insurance taken out and the monetary items in foreign currency.\n\nAt 31 December 2023, all the currency forwards covered mainly receivables (assets) and payables (liabilities) and related to both commercial and financing transactions between Group companies. At 31 December 2023, the fair value of the Group's currency forwards totalled EUR -2,702 thousand (2022: EUR -7,230 thousand), of which EUR 4,361 thousand were recognised under assets (2022: EUR 5,331 thousand) and EUR 7,063 thousand under liabilities (2022: EUR 12,561 thousand). None of those currency forwards were accounted for as hedges at the end of 2023 or 2022. In 2023, EUR -159 thousand were transferred from the consolidated statement of comprehensive income to profit or loss for the year (2022: EUR -165 thousand).\n\nThe vast majority of the Group's foreign currency purchase and sale forward contracts have a term of less than one year.\n\nAt 31 December 2023, the Group had used contracts for foreign currency transactions amounting to EUR 563 million for foreign currency sales and EUR 281 million for foreign currency purchases. At 31 December 2022, EUR 479 million were used for foreign currency sales and EUR 335 million for foreign currency purchases. The detail of these foreign currency forward contracts, by currency, is as follows:\n\n{92}------------------------------------------------\n\nImage /page/92/Picture/1 description: The image features the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters. The word is positioned inside of a thick, blue circle.\n\n(Amounts in thousands)\n\n|     | 2023      |             | 2022      |             |\n|-----|-----------|-------------|-----------|-------------|\n|     | Assets    | Liabilities | Assets    | Liabilities |\n| USD | 434,472   | 268,322     | 301,791   | 338,897     |\n| EUR | 36,834    | 9,573       | 36,886    | 2,947       |\n| GBP | 44,345    | 11,542      | 55,205    | 1,790       |\n| SEK | 7,146     |             |           |             |\n| CAD | 11,372    | 4,001       | 7,807     |             |\n| AUD | 11,383    | 843         | 10,281    |             |\n| NZD | 123       | 0           | 315       |             |\n| JPY | 6,170,016 | 552,377     | 7,116,614 | 254,207     |\n| MYR | 144,700   | 0           | 138,690   |             |\n| KRW |           | 6,863,736   |           | 1,900,754   |\n\nAt 31 December 2023 and 2022, there were no bank borrowings in currencies other than the functional currency and, therefore, the Group no longer has any derivative financial instruments to hedge exposure to foreign currency risk or interest rate risk.\n\n#### **Interest rate risk**\n\nThe Group enters into interest rate derivatives to hedge floating rate cash flows from debt instruments. As Acerinox's risk management strategy allows for the exchange of hedging instruments and hedged items to meet corporate financing needs, the Group has documented the effectiveness of hedging through the contracted financial instruments so that they can be qualified for accounting purposes as cash flow hedging instruments through the designation of generic hedging relationships.\n\nThe swaps entered into by the Group as at 31 December 2023 are as follows:\n\n|                             | Notional contracted | Amount outstanding | Expiration |\n|-----------------------------|---------------------|--------------------|------------|\n| From variable to fixed rate | EUR 70 million      | EUR 50 million     | 2028       |\n| From variable to fixed rate | EUR 100 million     | EUR 50 million     | 2026       |\n| From variable to fixed rate | EUR 80 million      | EUR 70 million     | 2028       |\n| From variable to fixed rate | EUR 260 million     | EUR 260 million    | 2027       |\n\nThe average interest rate of euro-denominated financing hedged by an interest rate hedging derivative, totalling EUR 430 million at year-end, was 1.70% (2022: 1.72%). The credit spread on these borrowings is included in both cases.\n\nBy the end of 2023 and 2022 there is no interest rate hedge in a currency other than the euro.\n\nAs explained in **Note 4.1.2**, during 2023 the Group has not entered into any new swap transactions.\n\nIn 2022, the Group entered into an interest rate derivative with Caixabank for a total amount of EUR 260 million and a final maturity date of 2027 to hedge the highly probable future cash flows related to the floating interest rate and any change in this interest rate that may occur before the maturity date. In addition, three interest rate swaps were cancelled, following the novation of the loan signed in 2020 with Caixabank for EUR 80 million and final maturity in 2025 and the cancellation of the two loans signed with Bankia and Caixabank for a total amount of EUR 160 million and EUR 50 million, respectively. Given that the Group's hedging policy is through the designation of generic hedges, the amount accumulated in equity due to the cancellation of the derivatives and the contracting of the new derivative did not have any impact on the income statement.\n\nThe detail at 31 December 2022 was as follows:\n\n|                             | Notional contracted | Amount outstanding | Expiration |\n|-----------------------------|---------------------|--------------------|------------|\n| From variable to fixed rate | EUR 30 million      | EUR 15 million     | 2023       |\n| From variable to fixed rate | EUR 70 million      | EUR 60 million     | 2028       |\n| From variable to fixed rate | EUR 100 million     | EUR 70 million     | 2026       |\n| From variable to fixed rate | EUR 80 million      | EUR 75 million     | 2028       |\n| From variable to fixed rate | EUR 260 million     | EUR 260 million    | 2027       |\n\n{93}------------------------------------------------\n\nImage /page/93/Picture/1 description: The image features the logo of Acerinox, a multinational steel manufacturing corporation. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The text is positioned within a blue circle, which appears to be a thick ring. The background of the image is plain white, providing a clear contrast to the blue logo.\n\nThe fair value of the interest rate swaps was based on the market value of equivalent derivative financial instruments at the reporting date and amounted to EUR 21,358 thousand (31 December 2022: EUR 34,305 thousand). These amounts are recognised in the Group's consolidated statement of financial position under the following line items:\n\n|                             | 2023    |             | 2022    |             |\n|-----------------------------|---------|-------------|---------|-------------|\n|                             | Current | Non-current | Current | Non-current |\n| Other financial assets      | 12,367  | 8,991       | 9,051   | 25,254      |\n| Other financial liabilities |         |             |         |             |\n\nThe Group assesses whether outstanding hedging relationships meet the effectiveness requirements both at the date of designation and at year-end. At 31 December 2023 and 2022, all outstanding interest rate derivatives arranged qualified as cash flow hedging instruments and, therefore, the unrealised gains and losses in the amount of EUR -3,821 thousand, on their measurement at fair value were recognised in the consolidated statement of comprehensive income (2022: EUR 35,184 thousand). The Group has documented the effectiveness of the derivatives arranged to be recognised as hedging instruments, as detailed in **Note 2.12.4.** The financial instruments considered to be hedges were not ineffective at any point in 2023 or 2022.\n\nIn 2023, EUR -12,175 thousand were transferred from the consolidated statement of comprehensive income to profit or loss for the year, reducing borrowing costs (2022: EUR 2,494 thousand). Combined with the EUR -159 thousand arising from the foreign currency hedges referred to in the previous section and the EUR -20,068 thousand from the raw material derivatives, the amount totalled EUR -32,402 thousand and was included in the consolidated statement of comprehensive income. In 2022, the transfer amount from comprehensive income related to interest rate hedges would need to include EUR -165 thousand from currency hedges and EUR -4,105 thousand from raw material derivatives. This totals EUR -1,776 thousand in the consolidated statement of comprehensive income for 2022.\n\n#### **Risk of changes in raw material prices**\n\nAs detailed in **Note 4.1.3**, high-performance alloys have a high metal content and are mainly composed of nickel, but they also contain other metals that are listed on the London Metal Exchange (LME). The Group, and mainly this division within it, is exposed to the risk of raw material price volatility, since it is unable to pass these fluctuations on to the customers through the selling price. For this reason, it uses derivative financial instruments to guarantee set prices for its customers and ensure that those prices are aligned with its costs, thus maintaining margins. The financial instruments used are based on arranging futures contracts on the prices listed on the LME.\n\nThe Group documents the hedging relationships and has a model that guarantees the effectiveness of the hedges.\n\nThe detail of the nominal values of the purchase and sale futures contracts arranged by the Group at year-end and the fair value measurement thereof is as follows:\n\n|          | 2023    |                                 |                                      | 2022    |                                 |                                      |\n|----------|---------|---------------------------------|--------------------------------------|---------|---------------------------------|--------------------------------------|\n|          | Nominal | Derivative fair value<br>Assets | Derivative fair value<br>Liabilities | Nominal | Derivative fair value<br>Assets | Derivative fair value<br>Liabilities |\n| Purchase | 142,956 | 158                             | 12,156                               | 180,265 | 31,949                          | 194                                  |\n| Sale     | 42,483  | 4,480                           | 25                                   | 80,275  | 1,044                           | 12,443                               |\n| TOTAL    |         | 4,638                           | 12,181                               |         | 32,994                          | 12,637                               |\n\n(Amounts in thousands of euros)\n\nAll the assets and liabilities arising from derivative financial instruments in this category are current, except for the EUR 9 thousand included as non-current financial assets in the consolidated statement of financial position and EUR 1,309 thousand recorded as non-current liabilities (2022: EUR 286 thousand).\n\nAt year-end all financial instruments contracted to hedge this risk meet the conditions to be considered as cash flow hedging instruments. As of 31 December 2022, of the total financial instruments contracted to hedge this risk, EUR 20,353 thousand met the conditions to be considered as cash flow hedging instruments and EUR 4 thousand were recorded at fair value through profit or loss as they are instruments contracted prior to the start of the documentation of the hedging relationships. As of 31 December 2023, unrealised gains and losses arising from the valuation at fair value and charged to the consolidated statement of comprehensive income amount to EUR -7,829 thousand. The amount transferred from the consolidated statement of comprehensive income to the profit for the year for these hedges is EUR -20,068 thousand (in 2022, the unrealised gains and losses from fair value measurement recognised in the consolidated statement of comprehensive income\n\n{94}------------------------------------------------\n\nImage /page/94/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, stacked vertically, and enclosed within a blue circle that is open at the top.\n\namounted to EUR 20,316 thousand and the amount transferred from the consolidated statement of comprehensive income to the profit for the year for these hedges was EUR -4,105 thousand).\n\n#### <span id=\"page-94-0\"></span>**NOTE 13 – CASH AND CASH EQUIVALENTS**\n\nThe detail of \"inventories\" in the consolidated statement of financial position as at 31 December is as follows:\n\n| (Amounts in thousands of euros) |           |           |\n|---------------------------------|-----------|-----------|\n|                                 | 2023      | 2022      |\n| Cash and banks                  | 155,691   | 228,515   |\n| Short-term bank deposits        | 1,637,992 | 1,319,525 |\n| TOTAL                           | 1,793,683 | 1,548,040 |\n\nThe Group made cash placements mainly in both US dollars and South African rand. The effective interest rate on the shortterm bank deposits in 2023 was 5.51% for the dollar (2022: 4.53%) and 8.15% for the rand (2022: 6.5%). The average term of the placements is between one day and three months, and they have been deposited at banks of recognised financial solvency.\n\nAll cash and cash equivalents are held in current accounts or current deposits, and there were no restricted cash balances at year-end.\n\n#### <span id=\"page-94-1\"></span>**NOTE 14 – EQUITY**\n\n#### **14.1 Subscribed capital, issue premium and treasury shares**\n\n|                                                              | No. of shares<br>(thousands) | Number of<br>treasury<br>shares<br>(thousands) | Treasury<br>shares (in<br>thousands of<br>euros) | Share capital<br>(in<br>thousands of<br>euros) | Issue<br>premium (in<br>thousands of<br>euros) |\n|--------------------------------------------------------------|------------------------------|------------------------------------------------|--------------------------------------------------|------------------------------------------------|------------------------------------------------|\n| As of 1 January 2022                                         | 270,546                      | -908                                           | -10,251                                          | 67,637                                         | 268                                            |\n| Acquisition of treasury shares                               |                              | -20,415                                        | -206,005                                         |                                                |                                                |\n| Amortisation of treasury shares                              | -10,822                      | 10,822                                         | 124,294                                          | -2,706                                         |                                                |\n| Long-term compensation plan (delivery of<br>treasury shares) |                              | 109                                            | 1,234                                            |                                                |                                                |\n| As of 31 December 2022                                       | 259,724                      | -10,392                                        | -90,728                                          | 64,931                                         | 268                                            |\n| Acquisition of treasury shares                               |                              | -213                                           | -2,084                                           |                                                |                                                |\n| Amortisation of treasury shares                              | -10,389                      | 10,389                                         | 90,685                                           | -2,597                                         |                                                |\n| Long-term compensation plan (delivery of<br>treasury shares) |                              | 110                                            | 1,072                                            |                                                |                                                |\n| As of 31 December 2022                                       | 249,335                      | -106                                           | -1,055                                           | 62,334                                         | 268                                            |\n\nThe detail of the changes in the shares outstanding in 2023 and 2022 is as follows:\n\n#### **a) Share capital**\n\nThe parent's share capital solely comprises ordinary shares. All these shares carry the same rights and there are no bylaw restrictions on their transfer.\n\nAt the cut-off date the share capital consisted of 249,335,371 ordinary shares of EUR 0.25 nominal value each, yielding capital of EUR 62,334 thousand (259,724,345 ordinary shares at 31 December 2022 and a capital amount of 64,931). The shares have been fully subscribed and paid.\n\nAll the Company's shares are listed on the Madrid and Barcelona stock exchanges.\n\nDuring the year, Acerinox, S.A.'s share capital has been reduced, as approved by the Annual General Meeting held on 23 May 2023, through the amortisation of 10,388,974 treasury shares with a value of EUR 2,597 thousand. The purpose of this reduction of share capital is to increase the value of the shareholders' stake in the Company.\n\n{95}------------------------------------------------\n\nImage /page/95/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a gap at the bottom.\n\nAs regards 2022, the Board of Directors of Acerinox, S.A. held on 30 June 2022, on the basis of the authorisation granted by the Annual General Meeting of Acerinox, S.A. held on 16 June, resolved to execute the resolution to reduce share capital, reducing it by EUR 2,706 thousand through the redemption of 10,821,848 treasury shares.\n\nAt 31 December 2023, the only shareholder with a stake of 10% or more in the share capital of Acerinox, S.A. is Corporación Financiera Alba, S.A. with 19.29% (2022: 18.52%).\n\n#### **b) Issue premium**\n\nThe issue premium amounted to EUR 268 thousand both in 2023 and 2022 and has the same restrictions and may be used for the same purposes as the voluntary reserves of the parent, including its conversion into share capital.\n\nNo issue premium distributions were made this year or last year.\n\n#### **c) Treasury shares**\n\nAt year-end, treasury shares amounted to 106,790 with a value of EUR 1,055 thousand (31 December 2022: 10,392,827 treasury shares with a value of EUR 90,728 thousand).\n\nThe Board of Directors meeting on 27 July 2022, in view of the Company's financial strength, cash generation prospects and the low level of the share price, agreed to initiate a new 4% share buy-back programme. This programme fulfilled the Company's commitment to redeem the shares that were issued in the years when scrip dividends were made.\n\nThe terms of the buy-back programme were as follows:\n\n- The shares had to be purchased at market price and under the price and volume conditions set out in Article 3 of the Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016.\n- The Company could not purchase shares at a price higher than the higher of the prices of the last independent trade and the highest current independent purchase bid on the trading venue where the purchase was carried out.\n- The Company could not purchase on any trading day more than 25% of the average daily volume of the shares on the trading venue on which the purchase was carried out. The average daily volume of the Company's shares for the purposes of the foregoing calculation was based on the average daily volume traded during the twenty business days preceding the date of each purchase. This limit applied for the entire duration of the programme.\n\nOn 26 October 2022, the Company completed the acquisition of 10,388,974 shares included in the second approved buy-back programme. The disbursement made by the Group in connection with this programme amounted to EUR 90,685 thousand.\n\nThe Annual General Meeting held on 23 May 2023 approved the reduction of Acerinox, S.A.'s share capital by EUR 2,597 thousand, through the retirement of 10,388,974 treasury shares. The purpose of this reduction of share capital through the redemption of treasury shares is to increase the value of the shareholders' stake in the Company. This capital reduction was carried out in August this year.\n\nDuring the year, 213 thousand treasury shares were acquired to cover the Multi-Year Remuneration Plans for Group executives for an amount of EUR 2,084 thousand. In addition, 110,563 treasury shares were delivered to Company's executives as a result of the completion of the Third Cycle of the First Multi-Year Remuneration Plan. In this way, treasury shares totalling EUR 1,072 thousand were derecognised. The difference between the equity instruments recorded in accordance with the valuation made at the beginning of the plan and the treasury shares delivered has been recorded against reserves of the parent company in the amount of EUR -769 thousand.\n\nWith regard to 2022, the Board of Directors of Acerinox, S.A., at its meeting held on 16 December 2021, also approved a share buyback plan of up to 4% of the share capital. The maximum investment approved was EUR 150 million and the maximum number of shares to be acquired could not exceed 10,821,848, representing 4% of the Company's capital, at the time of approval.\n\nDuring the year, in addition to those mentioned above, 9,986,487 shares were acquired for an amount of EUR 114,875 thousand in connection with this buy-back programme (835,361 shares for an amount of EUR 9,418 thousand had been acquired the previous year). As explained in the section on share capital, all shares corresponding to this buy-back programme were redeemed in 2022 for an amount of EUR 124,294 thousand. Effective 30 August 2022, 10,821,848 shares of Acerinox, S.A. were delisted from trading on the Madrid and Barcelona Stock Exchanges.\n\nIn June 2022, 109.378 treasury shares were delivered to Group executives as a result of the completion of the second cycle of the First Multi-Year Remuneration Plan. Treasury shares totalling EUR 1,234 thousand were derecognised. The difference between the equity instruments recorded in accordance with the valuation made at the beginning of the plan and the treasury shares delivered were recorded against reserves of the parent company in the amount of EUR -810 thousand.\n\n{96}------------------------------------------------\n\nImage /page/96/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, stacked vertically, and enclosed within a blue circle that is open at the top.\n\nAlso, last year, 40,000 treasury shares amounting to EUR 419 thousand were acquired to cover the multi-year remuneration plans for Group executives.\n\n#### **14.2 Dividends paid**\n\nThe Board of Directors of Acerinox S.A., held on 20 December 2023, has agreed to propose to the Shareholders' Meeting the payment of a dividend of EUR 0.62 per share, i.e. an increase of 3.33% over the last approved dividend, of which EUR 0.31 gross per share has been payable in cash to each of the existing and outstanding shares of the Company entitled to receive such dividend on 26 January 2024 through the depositary entities participating in the \"Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. Unipersonal\" (IBERCLEAR).\n\nIn accordance with Acerinox's Dividend Policy approved on 20 December 2022, the total shareholder remuneration is maintained, so that the reduction in the number of shares as a result of the last share buyback plan results in a higher payment per share.\n\nThe provisional accounting statement prepared by the directors in accordance with Article 277 of the Spanish Corporate Enterprises Act, which shows the liquidity status for the payment of the interim dividend, is as follows:\n\n|                                                                     |        | 2023    |\n|---------------------------------------------------------------------|--------|---------|\n| Cash on hand at 30 November 2023                                    |        | 6,939   |\n| <i>Plus:</i>                                                        |        |         |\n| Planned cash increases between 30 November 2023 and 26 January 2024 |        | 97,464  |\n| Dividend collection                                                 | 83,486 |         |\n| Receivables from operating activities                               | 4,980  |         |\n| Collection of tax refunds                                           | 8,998  |         |\n| <i>Less:</i>                                                        |        |         |\n| Planned cash decreases between 30 November 2023 and 26 January 2024 |        | -6,800  |\n| Payments for operating activities                                   | 4,820  |         |\n| Payments from financial operations                                  | 1,980  |         |\n| Projected liquidity as at 26 January 2024                           |        | 97,603  |\n| Credit line capacity                                                |        | 156,300 |\n| Available liquidity at 26 January 2024                              |        | 253,903 |\n\nThe Annual General Meeting held on 23 May 2023 resolved to distribute a dividend of EUR 0.60 per share. The amount of the dividend distribution was the aggregate result of the sum of the following amounts:\n\n- the payment of the interim dividend for 2022 in the amount of EUR 0.30 gross per share agreed by the Board of Directors at its meeting on 20 December 2022, which was paid on 27 January 2023, and amounted to EUR 74,799; and\n- a complementary dividend charged to the financial year 2022 at a rate of EUR 0.30 gross per share for each of the 259,724,345 existing shares (without prejudice to the provisions of Article 148 of the Corporate Enterprises Act with respect to the shares held as treasury stock at the time of payment). This complementary dividend was paid on 17 July 2023 in the amount of EUR 74,765 thousand.\n\nThe amount paid amounted to EUR 149,562 thousand.\n\nThe Annual General Meeting held on 16 June 2022 approved the distribution of a dividend of EUR 0.5 per share, which was paid on 5 July 2022. The amount paid amounted to EUR 129,850 thousand.\n\n#### **14.3 Reserves**\n\n#### **a) Retained earnings in reserves**\n\n\"Retained earnings in reserves\" includes consolidated profit or loss for the year and reserves of fully consolidated companies and of the parent, other than those mentioned below.\n\n{97}------------------------------------------------\n\nImage /page/97/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the white background of the circle. The blue circle is a thick ring, providing a border around the word. The overall design is simple and corporate, suggesting a company identity.\n\nThe detail of the reserves by Company is included in **Note 14.5**.\n\nThere are no restrictions on the transfer of funds by any Group company in the form of dividends, except for the nondistributable reserves required by the applicable legislation. At 31 December 2023, the Group had EUR 40,141 thousand in reserves and retained earnings subject to restrictions (31 December 2022: EUR 39,733 thousand).\n\nThe parent's legal reserve, which is included under \"retained earnings in reserves\" in the consolidated statement of changes in equity, was recognised in compliance with Article 274 of the Spanish Corporate Enterprises Act, which establishes that 10% of profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of share capital. Acerinox S.A has already recorded this reserve for an amount equivalent to 20% of the share capital, amounting in both periods to EUR 13,527 thousand.\n\nThe legal reserve is not distributable to shareholders and can only be used to offset losses, in the event that sufficient other reserves are not available for this purpose, in which case the reserve must be replenished with future profits.\n\n#### **b) Property, plant and equipment revaluation reserve**\n\nIn accordance with Royal Decree-Law 7/1996, of 7 June, on urgent tax measures and measures to foster and deregulate the economy, the parent revalued its items of property, plant and equipment. The amount of the reserve reflects the revaluation gains, net of tax at 3%.\n\nThe tax authorities had a three-year period from 31 December 1996 in which to conduct a tax audit. Since such an audit did not take place, the aforementioned balance may be used to eliminate losses or increase the Company's share capital.\n\nThe balance of this account may only be distributed, either directly or indirectly, once the gain has been realised.\n\n#### **c) Hedge reserves**\n\nValuation adjustments relating to hedges includes cumulative net changes in the fair value of cash flow hedging instruments associated with highly probable future transactions.\n\n#### **d) Fair value adjustments to financial assets**\n\nThe Company designated certain financial instruments as at fair value through comprehensive income. In accordance with the related accounting policy, changes in the fair value of these instruments are recognised directly in the consolidated statement of comprehensive income. The main assets classified in this category were sold last year as described in **Note 12.2.5**.\n\n#### **e) Reserve for actuarial adjustments**\n\nThis reserve includes the changes in the actuarial value of the defined benefit plan obligations. The Group, particularly in its high-performance alloys division, has significant commitments to its employees regarding pension matters. **Note 16.1** includes detailed information. As described in the accounting policy defined in **Note 2.16**, the Group recognises changes in the actuarial valuation of the obligations in other comprehensive income.\n\n#### **14.4 Translation differences**\n\nThe detail of the changes in \"translation differences\" is included in the consolidated statement of changes in equity.\n\nThe breakdown of the cumulative translation differences by company at the end of 2023 and 2022 and the functional currencies of their respective financial statements are as follows:\n\n(Amounts in thousands of euros)\n\n{98}------------------------------------------------\n\nImage /page/98/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned inside a blue circle.\n\n| GROUP COMPANIES                                         | Currency | 2023     | 2022     |\n|---------------------------------------------------------|----------|----------|----------|\n| ACERINOX (SCHWEIZ) A.G.                                 | CHF      | 1,781    | 1,604    |\n| ACERINOX ARGENTINA S.A.                                 | ARS      | -7,379   | -6,182   |\n| ACERINOX AUSTRALASIA PTY. LTD.                          | AUD      | 20       | 36       |\n| ACX DO BRASIL REPRESENTAÇOES, LTDA.                     | BRL      | -259     | -279     |\n| ACERINOX CHILE, S.A.                                    | CLP      | -1,277   | -905     |\n| ACERINOX COLOMBIA S.A.S.                                | COP      | -199     | -227     |\n| ACERINOX INDIA PVT LTD.                                 | INR      | -81      | -67      |\n| ACERINOX METAL SANAYII VE TICARET L.S.                  | TRY      | -1,878   | -1,333   |\n| ACERINOX MIDDLE EAST DMCC (DUBAI)                       | AED      | 72       | 104      |\n| ACERINOX PACIFIC LTD.                                   | HKD      | -4,862   | -4,826   |\n| ACERINOX POLSKA, SP. ZO.O.                              | PLN      | -1,690   | -3,830   |\n| ACERINOX RUSSIA LLC.                                    | RUB      | -174     | -85      |\n| ACERINOX SCANDINAVIA AB                                 | SEK      | -7,358   | -7,441   |\n| ACERINOX S.C. MALAYSIA SDN. BHD                         | MYR      | -1,940   | -2,042   |\n| ACERINOX (SEA), PTE LTD.                                | SGD      | 183      | 208      |\n| ACERINOX SHANGAI CO., LTD.                              | CNY      | 916      | 1,140    |\n| ACERINOX U.K., LTD.                                     | GBP      | -6,138   | -6,702   |\n| BAHRU STAINLESS, SDN. BHD                               | USD      | 93,376   | 92,260   |\n| COLUMBUS STAINLESS INC.                                 | ZAR      | -192,677 | -168,040 |\n| CORPORACIÓN ACERINOX PERU S.A.C.                        | PEN      | -20      | -22      |\n| NORTH AMERICAN STAINLESS CANADA, INC                    | USD      | 3,785    | 5,826    |\n| NORTH AMERICAN STAINLESS MEXICO S.A. DE C.V.            | USD      | 5,648    | 7,465    |\n| NORTH AMERICAN STAINLESS FINANCIAL<br>INVESTMENTS, LTD. | USD      | 3        | 4        |\n| NORTH AMERICAN STAINLESS INC.                           | USD      | 108,206  | 181,514  |\n| VDM METALS GROUP                                        | —        | 3,952    | 5,743    |\n| TOTAL                                                   |          | -7,990   | 93,923   |\n\nThe origin of the changes arising in 2023 as in 2022 is detailed below:\n\n| (Amounts in thousands of euros)                             |         |         |\n|-------------------------------------------------------------|---------|---------|\n|                                                             | 2023    | 2022    |\n| Opening balance                                             | 93,923  | -10,154 |\n| Difference in equity translation                            | -89,339 | 115,829 |\n| Difference in translation results                           | -7,471  | -6,380  |\n| Difference on translation of investments in Group companies | -4,919  | -5,961  |\n| Dividend distribution translation difference                |         | 83      |\n| Other changes                                               | -184    | -242    |\n| Balance as of 31 December                                   | -7,990  | 93,923  |\n\nThe translation difference resulting from the measurement of equity was negative, i.e. EUR -89,339, due to the depreciation of 4% of the USD and 12% of the rand with respect to the exchange rate at the end of 2022. The EUR/USD exchange rate applied at the end of 2023 was 1.1050 (2022: 1.0666), while the EUR/ZAR rate was 20.3477 in 2023 (2022: 18.0986).\n\nIn 2022, this difference was also positive in the amount of EUR 115,829, mainly due to the appreciation of the USD. The EUR/USD exchange rate applied at the end of 2022 was 1.10666 (2021: 1.1326), while the EUR/ZAR rate was 18.0986 in 2022 (2021: 18,0625).\n\nThe translation difference by income derives from the difference between the average exchange rate applied in the translation of the income statement and the closing exchange rate applied to the balance sheet items.\n\n#### **14.5 Detail of reserves, profit or loss and non-controlling interests: Contribution by company**\n\nAt 31 December 2023 and 2022, the contribution of each of the consolidated companies to reserves and consolidated profit or loss is detailed as follows:\n\n(Amounts in thousands of euros)\n\n|                                                                                   | 2023                     |                                |                                                            | 2022                                   |                           |                                |                                                            |                                        |\n|-----------------------------------------------------------------------------------|--------------------------|--------------------------------|------------------------------------------------------------|----------------------------------------|---------------------------|--------------------------------|------------------------------------------------------------|----------------------------------------|\n|                                                                                   | Contribution<br>reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests | Contributio<br>n reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests |\n| ACERINOX S.A                                                                      | 2,087,657                | -5,948                         |                                                            |                                        | 2,048,140                 | -16,196                        |                                                            |                                        |\n|                                                                                   | 2023                     |                                |                                                            |                                        | 2022                      |                                |                                                            |                                        |\n|                                                                                   | Contribution<br>reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests | Contributio<br>n reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests |\n| ACERINOX<br>(SCHWEIZ) A.G.                                                        | 883                      | -21                            |                                                            |                                        | 825                       | 58                             |                                                            |                                        |\n| ACERINOX<br>ARGENTINA S.A.                                                        | 8,514                    | -561                           |                                                            |                                        | 7,173                     | 313                            |                                                            |                                        |\n| ACERINOX<br>AUSTRALASIA PTY.<br>LTD.                                              | 32                       | -22                            |                                                            |                                        | 62                        | -30                            |                                                            |                                        |\n| ACERINOX BENELUX S.A.<br>- N.V.                                                   | 1,307                    | 231                            |                                                            |                                        | 667                       | 641                            |                                                            |                                        |\n| ACX DO BRASIL<br>REPRESENTAÇOES,<br>LTDA.                                         | 277                      | -4                             |                                                            |                                        | 289                       | -12                            |                                                            |                                        |\n| ACERINOX CHILE,<br>S.A.                                                           | 1,679                    | -1,314                         |                                                            |                                        | 578                       | 1,100                          |                                                            |                                        |\n| ACERINOX<br>COLOMBIA S.A.S.                                                       | 376                      | -199                           |                                                            |                                        | 514                       | -138                           |                                                            |                                        |\n| ACERINOX<br>DEUTSCHLAND<br>GMBH                                                   | -19,241                  | 1,866                          |                                                            |                                        | -18,299                   | -941                           |                                                            |                                        |\n| ACERINOX EUROPA,<br>S.A.U.                                                        | -117,073                 | -189,947                       |                                                            |                                        | -70,289                   | -46,784                        |                                                            |                                        |\n| ACERINOX FRANCE<br>S.A.S                                                          | -11,369                  | 207                            |                                                            |                                        | -11,892                   | 522                            |                                                            |                                        |\n| ACERINOX ITALIA<br>S.R.L.                                                         | -30,809                  | -3,880                         |                                                            |                                        | -34,164                   | 3,355                          |                                                            |                                        |\n| ACERINOX INDIA<br>PVT LTD.                                                        | 123                      | 193                            |                                                            |                                        | -52                       | 176                            |                                                            |                                        |\n| ACERINOX METAL<br>SANAYII VE TICARET<br>L.S.                                      | 2,198                    | 715                            |                                                            |                                        | 1,750                     | 448                            |                                                            |                                        |\n| ACERINOX MIDDLE<br>EAST DMCC (DUBAI)                                              | 807                      | -4                             |                                                            |                                        | 871                       | -65                            |                                                            |                                        |\n| ACERINOX PACIFIC<br>LTD.                                                          | -21,326                  | 566                            |                                                            |                                        | -21,270                   | -57                            |                                                            |                                        |\n| ACERINOX POLSKA,<br>SP. ZO.O.                                                     | 3,287                    | 2,142                          |                                                            |                                        | 4,418                     | -1,131                         |                                                            |                                        |\n| ACERINOX RUSSIA<br>LLC.                                                           | 200                      | -26                            |                                                            |                                        | 606                       | -214                           |                                                            |                                        |\n| ACERINOX<br>SCANDINAVIA AB                                                        | 1,180                    | -151                           |                                                            |                                        | 1,914                     | -733                           |                                                            |                                        |\n| ACERINOX S.C.<br>MALAYSIA SDN. BHD                                                | -36,670                  | -778                           |                                                            |                                        | -38,362                   | 1,693                          |                                                            |                                        |\n| ACERINOX SHANGAI<br>CO., LTD.                                                     | 789                      | -17                            |                                                            |                                        | 906                       | -118                           |                                                            |                                        |\n| ACERINOX (SEA), PTE<br>LTD.                                                       | 844                      | -79                            |                                                            |                                        | 857                       | -13                            |                                                            |                                        |\n| ACERINOX U.K., LTD.                                                               | 5,105                    | 661                            |                                                            |                                        | 5,409                     | -303                           |                                                            |                                        |\n| ACEROL - COMÉRCIO<br>E INDÚSTRIA DE<br>AÇOS INOXIDÁVEIS,<br>UNIPESSOAL, LDA.      | -2,358                   | 91                             |                                                            |                                        | -2,137                    | -220                           |                                                            |                                        |\n| BAHRU STAINLESS,<br>BDN. BHD                                                      | -766,830                 | -205,208                       | -2,463                                                     | -1,280                                 | -548,880                  | -217,950                       | -2,652                                                     | 1,170                                  |\n| COLUMBUS<br>STAINLESS (PTY)<br>LTD.                                               | 117,674                  | -26,304                        | -8,669                                                     | 55,845                                 | 59,631                    | 58,043                         | 16,961                                                     | 72,266                                 |\n| CORPORACIÓN<br>ACERINOX PERU<br>S.A.C.                                            | -263                     | -156                           |                                                            |                                        | -209                      | -54                            |                                                            |                                        |\n| INOX RE, S.A.                                                                     | 33,972                   | -2,949                         |                                                            |                                        | 34,245                    | -273                           |                                                            |                                        |\n| INOXCENTER<br>CANARIAS, S.A.U.                                                    | 1,071                    | 141                            |                                                            |                                        | 1,071                     | 1                              |                                                            |                                        |\n| INOXCENTER, S.L.U.                                                                | -10,877                  | -3,524                         |                                                            |                                        | -12,137                   | 1,259                          |                                                            |                                        |\n| INOXFIL, S.A.                                                                     | 667                      | -2,670                         | -6                                                         | 10                                     | -2,075                    | 2,742                          | 6                                                          | 16                                     |\n| INOXIDABLES DE<br>EUSKADI S.A.U.                                                  | 5,263                    | 672                            |                                                            |                                        | 5,826                     | -563                           |                                                            |                                        |\n| INOXPLATE -<br>COMÉRCIO DE<br>PRODUCTOS DE AÇO<br>INOXIDÁVEL,<br>UNIPESSOAL, LDA. | 2,190                    | 115                            |                                                            |                                        | 2,077                     | 114                            |                                                            |                                        |\n| METALINOX BILBAO,<br>S.A.U.                                                       | 16,374                   | 938                            |                                                            |                                        | 16,371                    | 2                              |                                                            |                                        |\n|                                                                                   | 2023                     |                                |                                                            |                                        | 2022                      |                                |                                                            |                                        |\n|                                                                                   | Contribution<br>reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests | Contributio<br>n reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests |\n| NORTH AMERICAN<br>STAINLESS CANADA,<br>INC                                        | 45,411                   | 3,816                          |                                                            |                                        | 39,486                    | 5,925                          |                                                            |                                        |\n| NORTH AMERICAN<br>STAINLESS MEXICO<br>S.A. DE C.V.                                | 21,807                   | 6,435                          |                                                            |                                        | 15,655                    | 6,152                          |                                                            |                                        |\n| NORTH AMERICAN<br>STAINLESS<br>FINANCIAL<br>INVESTMENTS LTD.                      | -9,993                   | 9,993                          |                                                            |                                        | -10,207                   | 10,207                         |                                                            |                                        |\n| NORTH AMERICAN<br>STAINLESS INC.                                                  | 737,281                  | 579,366                        |                                                            |                                        | 338,590                   | 697,451                        |                                                            |                                        |\n| ROLDAN, S.A.                                                                      | 45,194                   | -9,342                         | -23                                                        | 121                                    | 36,507                    | 8,687                          | 17                                                         | 144                                    |\n| VDM METALS<br>HOLDING GMBH                                                        | 84,496                   | 73,084                         |                                                            |                                        | 66,288                    | 42,960                         |                                                            |                                        |\n| TOTAL                                                                             | 2,199,849                | 228,128                        | -11,161                                                    | 54,696                                 | 1,920,753                 | 556,054                        | 14,332                                                     | 73,596                                 |\n\n{99}------------------------------------------------\n\nImage /page/99/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif, dark blue letters. The word is enclosed within a partial circle, also in dark blue, that curves around the top and bottom of the word. The background is white.\n\n{100}------------------------------------------------\n\nImage /page/100/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a partial circle. The circle is open on the right side and is colored in blue. The text is also in blue, matching the color of the circle.\n\nIn this financial year, the Group company North American Stainless paid dividends of EUR 296 million to the parent company (2022: EUR 469 million), which explains why the reserves of the American company have barely increased compared to the previous year, as well as the change in the reserves of Acerinox, S.A.\n\n#### **14.6 Hyperinflation adjustments**\n\nSince 1 July 2018, Argentina has been classified as a hyperinflationary economy due to meeting the qualification requirements established in IAS 29. The Acerinox Group has an entity in Argentina which engages exclusively in the marketing of stainless steel in that country and, accordingly, the amount of its assets and liabilities and its contribution to the Group's results are not significant. The Group did not restate the comparative figures for the previous period as the impacts are not significant for the Group.\n\nThe financial statements of Acerinox Argentina for both 2023 and 2022 were expressed in terms of the measuring unit current at the end of the reporting period. The restated cost of each non-monetary item in the financial statements was determined by applying to its historical cost and accumulated depreciation and amortisation charge the change in a general price index from the date of acquisition to the end of the reporting period. The revaluation of non-cash assets amounted to EUR 490 thousand cost and EUR 351 thousand accumulated depreciation (2022: EUR 527 thousand cost and EUR 380 thousand accumulated depreciation).\n\nThe components of owners' equity, except retained earnings and any revaluation surplus, were restated by applying a general price index to the various items from the date on which the components were contributed or otherwise arose. Restated retained earnings are the result of applying these indices to the other amounts in the consolidated statement of financial position. The impact on reserves amounted to EUR 1,028 thousand, as reflected in the consolidated statement of changes in equity (2022: EUR 973 thousand).\n\nAll the items in the consolidated statement of comprehensive income were also restated in the monetary unit current at the end of the reporting period. For this purpose, all the amounts were restated by applying an index calculated on the basis of the change in the general price index from the date on which the income and expenses were recognised in the financial statements. The amount recognised in the consolidated statement of profit or loss for this item was EUR -1,345 thousand (2022: EUR -605 thousand).\n\n#### **14.7 Non-controlling interests**\n\nAt year-end, the companies with non-controlling interests were Columbus Stainless, Ltd. (Columbus), with an interest of 24% held by the South African group IDC (Industrial Development Corporation), and Bahru Stainless Sdn. Bhd, (Bahru), whose non-controlling interests were reduced to 1.19% owned by Hanwa, Co. Ltd.\n\nThere are no rights to protect non-controlling interests that may restrict the entity's ability to access or use assets, or settle the entity's liabilities.\n\nNeither of these companies distributed dividends in 2023 or 2022.\n\n{101}------------------------------------------------\n\nImage /page/101/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not fully closed, leaving a gap at the top.\n\nThe detail of the main items in the financial statements of Columbus, which was the only Group company with significant non-controlling interests at year-end, is as follows:\n\n#### **Columbus**\n\n(Amounts in thousands of euros)\n\n|                             | 2023    | 2022    |\n|-----------------------------|---------|---------|\n| Non-current assets          | 119,822 | 123,328 |\n| Current assets              | 304,520 | 432,168 |\n| Total Assets                | 424,342 | 555,496 |\n|                             |         |         |\n| Non-current liabilities     | 8,912   | 22,712  |\n| Current liabilities         | 182,741 | 231,671 |\n| Total Liabilities           | 191,653 | 254,383 |\n|                             |         |         |\n| Statement of profit or loss | 2023    | 2022    |\n| Revenue                     | 610,191 | 984,008 |\n| Profit/(loss) for the year  | -36,121 | 70,669  |\n|                             |         |         |\n| Cash flows                  | 2023    | 2022    |\n| Operating cash flows        | -19,439 | 44,511  |\n| Investment flows            | -21,924 | -18,803 |\n| Financing flows             | 29,649  | -2,729  |\n| Total cash flows generated  | -11,714 | 22,979  |\n\nWhen Columbus Stainless was incorporated, Acerinox signed a Shareholders Agreement in December 2001 with the three South African partners, Highveld Steel and Vanadium Corporation, Ltd., Samancor, Ltd. and IDC, which held ownership interests therein.\n\nIn Clause 9 of that agreement it was stipulated that, in the event of a change of control at Acerinox, S.A., by virtue of which a shareholder acquired shares of Acerinox, S.A. that afforded it a majority of votes at the General Meeting or on the Board, the shareholders would be able to exercise a put option on their ownership interests vis-à-vis Acerinox, S.A.\n\nIn the years that have passed, two of the three partners who signed the agreement, Highveld and Samancor, have renounced their shareholdings, and the third, IDC, a state entity supporting industrial development in South Africa, has increased its ownership interest from 12% to 24%, given its interest in supporting the creation of wealth, the maintenance of employment and the status of the stainless-steel industry as a strategic industry for the country. IDC recently declared that this was a strategic and long-term interest.\n\nConsequently, the exercise of this option, with respect to the aforementioned assumption, is highly unlikely for the only minority shareholder of Columbus Stainless, since its permanence is not determined by the presence of Acerinox, as it was in the case of the other shareholders, but by support to the national industry.\n\n#### **14.8 Distribution of profit**\n\nThe proposed distribution of profit of the parent, Acerinox, S.A., for 2023 that the Board of Directors will submit for approval by the shareholders at the Annual General Meeting is as follows:\n\n|                                                         | 2023        |\n|---------------------------------------------------------|-------------|\n| Basis for distribution:                                 |             |\n| Profit/(loss) for the year                              | 114,186,613 |\n| Application:                                            |             |\n| Dividends                                               | 149,537,702 |\n| Distribution of dividends against prior years' reserves | -35,351,089 |\n\nThe Board of Directors of Acerinox, S.A. resolved to propose to the next Annual General Meeting of the Company a dividend distribution of EUR 0.62 per share.\n\n{102}------------------------------------------------\n\nImage /page/102/Picture/1 description: The image features the logo of Acerinox, a company specializing in stainless steel manufacturing. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that frames the company name. The overall design is simple and corporate, conveying a sense of stability and professionalism.\n\nOn 23 May 2023, the General Meeting of Shareholders approved the appropriation of the results of the parent company for the financial year 2022, with the following distribution:\n\n|                            | 2022        |\n|----------------------------|-------------|\n| Basis for distribution:    |             |\n| Profit/(loss) for the year | 332,013,162 |\n| Application:               |             |\n| Dividends                  | 149,599,165 |\n| To voluntary reserves      | 182,413,997 |\n\nThe dividend finally distributed does not correspond exactly to the distribution approved last year, as the number of treasury shares had changed at the time of the dividend distribution.\n\n#### **14.9 Earnings per share**\n\nThe basic earnings per share are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding in the year, less treasury shares.\n\n(Amounts in thousands of euros)\n\n|                                                      | 2023        | 2022        |\n|------------------------------------------------------|-------------|-------------|\n| Profit/(loss) for the year attributable to the Group | 228,128     | 556,054     |\n| Weighted average number of common shares outstanding | 249,260,083 | 257,598,114 |\n| Earnings per share (in euros)                        | 0.92        | 2.16        |\n\nAlthough there were other equity instruments that gave access to capital at 31 December 2023, as indicated in **Note 16.1.3**, these do not have a significant effect on the calculation of earnings per share and, therefore, diluted earnings or losses per share are the same as basic earnings or losses per share.\n\n#### <span id=\"page-102-0\"></span>**NOTE 15 – DEFERRED INCOME**\n\n\"Deferred income\" includes non-refundable government aid, including emission allowances received free of charge (see **Note 11.1**) and other grants related to assets. The changes therein were as follows:\n\n|                           | 2023    | 2022    |\n|---------------------------|---------|---------|\n| Balance as of 1 January   | 27,465  | 18,684  |\n| Grants awarded            | 45,979  | 29,156  |\n| Application to results    | -37,097 | -20,375 |\n| Balance as of 31 December | 36,347  | 27,465  |\n\n(Amounts in thousands of euros)\n\nThe amount recognised under \"deferred income\" includes mainly aid received by Acerinox Europa for its research and development and environmental activities, and the balancing entry for emission allowances allocated for no consideration under the National Allocation Plan and not used in the year (**Note 11.1**).\n\n{103}------------------------------------------------\n\nImage /page/103/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is enclosed within a blue circle that is open at the bottom, creating a crescent shape.\n\nThe detail of the grants received in 2023 is as follows:\n\n(Amounts in thousands of euros)\n\n|                          | 2023   | 2022   |\n|--------------------------|--------|--------|\n| R&D                      | 1,889  | 14     |\n| Environment              | 24,612 | 9,879  |\n| Allocation of CO2 rights | 19,113 | 18,692 |\n| Covid-19 grants          | 29     | 198    |\n| Training                 | 273    | 306    |\n| Other                    | 63     | 67     |\n| Total                    | 45,979 | 29,156 |\n\nIn 2023, the Group received an environmental grant of EUR 24,612 thousand mostly related to offsetting the costs of indirect greenhouse gas emissions and energy offsetting. In 2022, EUR 9,879 thousand were received for the same concept.\n\nThe Group considers that it has met or will meet all the conditions for receiving the grants in the period stipulated and, therefore, there are no significant contingencies in connection with the grants obtained.\n\n#### <span id=\"page-103-0\"></span>**NOTE 16 – PROVISIONS AND CONTINGENCIES**\n\nThe detail of the long-term provisions included in the consolidated statements of financial position for the 2023 and 2022 tax years is as follows:\n\n| (Amounts in thousands of euros) |         |         |\n|---------------------------------|---------|---------|\n|                                 | 2023    | 2022    |\n| Employee benefits               | 148,311 | 135,397 |\n| Other provisions                | 31,683  | 23,661  |\n| TOTAL                           | 179,994 | 159,058 |\n\n#### **16.1 Employee benefits**\n\n#### **16.1.1 Defined contribution plans**\n\nIn accordance with their domestic legislation, certain Group companies make contributions to pension plans managed by external entities. An expense of EUR 17,656 thousand was recognised in this connection under \"staff costs\" in the consolidated statement of profit or loss for the year (2022: EUR 20,400 thousand).\n\n#### **16.1.2 Defined benefit plans**\n\nThe detail of the provisions for employee benefits, by type of obligation, is as follows:\n\n| (Amounts in thousands of euros)   | 2023    | 2022    |\n|-----------------------------------|---------|---------|\n| Pension plans                     | 118,137 | 106,326 |\n| Compensation for early retirement | 7,661   | 7,130   |\n| Supplements                       | 12,395  | 11,625  |\n| Post-employment obligations       | 8,675   | 9,004   |\n| Other obligations                 | 402     |         |\n| Restructuring plans               | 1,041   | 1,312   |\n| TOTAL                             | 148,311 | 135,397 |\n\nThe defined benefit liability recognised in the consolidated statement of financial position corresponds to the present value of the defined benefit obligations existing at the reporting date less the fair value of the plan assets at that date.\n\n{104}------------------------------------------------\n\nImage /page/104/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue crescent shape. The crescent shape is open at the top and curves around the text. The text is also in blue, matching the color of the crescent shape.\n\nThe detail of the main liabilities recognised by the Group is as follows:\n\n#### **Pension plans**\n\nThe VDM Group guarantees pension plans to its employees, mainly in Germany. The pension obligations are discharged under voluntary plans established by the company prior to the acquisition. Nowadays, new hires cannot benefit from obligations of this nature. These obligations take into consideration various remuneration schemes representing various risk profiles and are based on individual and collective regulations. All these obligations are pension plans that provide benefits to plan members in the form of a pension for life. The level of this pension is based on the years of service and, depending on the case, may be based on the final salary, average salary or even fixed amounts. Since the obligations undertaken by the company in this connection are not outsourced, the company fulfils the related payment obligation when it falls due.\n\nThe weighted average term of the defined benefit obligations is 14.46 years (2022: 14.3).\n\nThe actuarial valuation of these obligations is conducted annually by an independent expert.\n\nThe detail of the amounts recognised in the consolidated statement of financial position and of the changes in the net defined benefit obligations in the financial year is as follows:\n\n|                                                        | 2023    | 2022    |\n|--------------------------------------------------------|---------|---------|\n| Balance as of 1 January                                | 106,326 | 147,250 |\n| Contributions paid                                     | -4,253  | -3,846  |\n| Expense for services rendered recognised in income     | 3,372   | 5,278   |\n| Interest cost                                          | 3,785   | 1,604   |\n| Actuarial loss recognised against comprehensive income | 8,906   | -43,959 |\n| Balance as of 31 December                              | 118,137 | 106,326 |\n\nThe analyses of the expected maturity of undiscounted pensions in the years 2023 and 2022 are as follows:\n\n|           | 2023   | 2022   |\n|-----------|--------|--------|\n| 2023      |        | 4,824  |\n| 2024      | 5,039  | 4,559  |\n| 2025      | 4,793  | 4,764  |\n| 2026      | 5,134  | 5,128  |\n| 2027      | 5,729  | 5,504  |\n| 2028-2032 | 37,011 | 29,719 |\n| Total     | 57,706 | 54,498 |\n\nThe actuarial assumptions used in this valuation for 2023 and 2022 are as follows:\n\n|                                                         | 2023     | 2022              |\n|---------------------------------------------------------|----------|-------------------|\n| Discount rate                                           | 3.20     | 3.70              |\n| Inflation                                               | 2.20     | 2.20              |\n| Long-term growth rate                                   | 3.00     | 3.00              |\n| Pension dynamic with adjustment according to Sec. 16    | 2.20     | 0.00              |\n| Pension dynamics with adjustment according to inflation | 2.20     | 2.20              |\n| Mortality rate                                          | RT2018 G | Richttafeln 2018G |\n\nThe sensitivity analysis performed by the company gave rise to the following adjustments to the pension obligations, based on changes in certain assumptions:\n\n|                  |                                       | 2023   | 2022  |\n|------------------|---------------------------------------|--------|-------|\n| Discount rate    | 0.50 bp decrease                      | 10,735 | 9,468 |\n| Salary increase  | 0.50 bp increase                      | 100    | 82    |\n| Pension increase | 0.25 bp increase                      | 2,065  | 1,872 |\n| Mortality rate   | Increase in life expectancy by 1 year | 3,108  | 2,751 |\n\n#### **Post-employment obligations**\n\n{105}------------------------------------------------\n\nImage /page/105/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned within a blue crescent shape. The crescent shape is open on the left side, and the text is aligned to the left within the crescent.\n\nPost-employment obligations relate to medical care plans provided by Columbus Stainless to plan members following their retirement. No new members have joined the plan. The company generally performs actuarial valuations of the obligations assumed. The most recent valuation was performed this financial year. The assumptions used in the latest valuation were a discount rate of 12.33% and a medical cost inflation rate of 9.06%. The beginning and closing balances for the year are reconciled as follows:\n\n#### (Amounts in thousands of euros)\n\n|                                                          | 2023  | 2022  |\n|----------------------------------------------------------|-------|-------|\n| Balance as of 1 January                                  | 9,004 | 8,456 |\n| Contributions paid                                       | -394  | -494  |\n| Expense for services rendered recognised in income       | 98    | 134   |\n| Interest cost                                            | 963   | 965   |\n| Actuarial result recognised against comprehensive income |       | -40   |\n| Translation differences                                  | -995  | -18   |\n| Balance as of 31 December                                | 8,675 | 9,004 |\n\nThe discount rates applied are based on the expected growth rates of health insurance policies. Any changes in these rates may have an impact on both the obligations recognised and on comprehensive income. An increase of one percentage point in the discount rate would increase the obligation by EUR 892 thousand (2022: EUR 928 million). By contrast, a decrease of one percentage point in the discount rate would reduce the obligation by EUR 1.1 million in 2023 (2022: EUR 1.1 million).\n\n#### **Acerinox Europa, S.A.U.'s employment regulation plan**\n\nOn 13 November 2019, the representatives of Acerinox Europa, S.A.U. and the workers' representatives signed an agreement at the Servicio de Resolución Extrajudicial de Conflictos Laborales (SERCLA) of the Junta de Andalucía (Andalusian Regional Government) to reduce the workforce at the Campo de Gibraltar Factory (Cádiz) by 215 people.\n\nThese 32 employees left immediately after the execution of the aforementioned agreement and prior to year-end. The remaining departures, i.e. those leaving the company due to age reasons, took place gradually until the end of 2022, as the employees signed up to the plan reached 60 years of age. The last 4 employees involved in the collective redundancy procedure left the company in 2022.\n\nThe obligations arising from the approved early retirement plan are completely externalised, which means that the insurance company will compensate the employees at the time of their retirement. EUR 4,997 thousand were paid in this fiscal year in this connection with a charge to the insurance policy taken out (EUR 5,968 thousands in 2022).\n\nAt 31 December the existing liabilities relating to the future payments to be made by the Group were duly outsourced and covered in full. Accordingly, it was not necessary for the Group to recognise any additional liabilities. Any differences arising between the amount of the provision and the insurance taken out are charged or credited to profit or loss for the year.\n\nThe Company also provisioned EUR 9,254 thousand relating to the contribution to the Treasury established in Additional Provision Sixteen of Law 27/2011, amended by Royal Decree 1484/2012, accrued as a result of the presence of certain workers of over 50 years of age. This contribution will be payable to the pertinent authority in accordance with the aforementioned legislation. This provision is included under \"other provisions\", as disclosed in **Note 16.2**.\n\nIn 2022, the Company claimed exceptional aid on the basis of Royal Decree 908/2013, of 22 November, in favour of workers involved in company restructuring processes. This aid is subject to the workers signing up to a special agreement with the social security authorities and will be used to pay for social security contributions. The Group received subsidies totalling EUR 583 thousand which was recorded as \"other operating income\".\n\nThe company has made a provision of EUR 998 thousand, to cover an amount in anticipation of possible repayments to be made through the insurance company of the aforementioned aid, mainly by employees opting to bring forward their retirement age.\n\n#### **16.1.3 Other obligations**\n\nIn addition, there are obligations arising from certain senior executive retirement benefit arrangements amounting to EUR 18.8 million (2022: EUR 17.9 million). Since these obligations were appropriately insured in both 2023 and 2022, and their\n\n{106}------------------------------------------------\n\nImage /page/106/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not fully closed, leaving a gap at the top.\n\nestimated amount was covered by cash flows arising from the insurance policies taken out for this purpose, no liabilities were recognised in this connection.\n\nThe assumptions used to calculate the fair value are detailed below:\n\n|                           | 2023                  | 2022                   |\n|---------------------------|-----------------------|------------------------|\n| Mortality table           | PER2020_Col_1er.orden | PER 2020_Col_1er.orden |\n| CPI                       | 2.00 %                | 2.00 %                 |\n| Salary growth             | 2.00 %                | 2.00 %                 |\n| Growth in social security | IPC+0.115%            | 2.00 %                 |\n| Retirement age            | 65 years              | 65 years               |\n| Accrual method            | Projected Unit Credit | Projected Unit Credit  |\n\n#### **16.1.4 Sare-based payment transactions**\n\nAt its meeting held on 22 March 2018, the Board of Directors of Acerinox, S.A. approved a multi-year remuneration or longterm incentive (LTI) plan enabling the CEO and senior executives of the Acerinox Group to receive a portion of their variable remuneration in the form of treasury shares of Acerinox, S.A. The target amount is 30-50% of their base salary, subject to a personal limit of 200% of the respective target. This plan was subsequently submitted to, and approved by, the shareholders of Acerinox at the General Meeting held on 10 May 2018.\n\nThe approved LTI plan consists of three three-year cycles. The First Cycle of the plan ran from 1 January 2018 to 31 December 2020. The Second Cycle commenced on 1 January 2019 and ended on 31 December 2021, and the Third Cycle commenced on 1 January 2020 and ended on 31 December 2022.\n\nOn 1 January 2021, a new multi-year remuneration plan was also approved, consisting of three cycles, each with a duration of three years. Other Group executives have also been included in this second plan.\n\nUnder both remuneration plans, employees receive shares of the parent (\"performance shares\") at the end of each cycle. The delivery of the shares and the number to be delivered are contingent upon the fulfilment of certain vesting requirements relating to the employee remaining in service and the achievement of individual corporate objectives, certain of which depend on market circumstances.\n\nThe Group presumes that the services are to be provided over the irrevocability or vesting period as consideration for the future delivery of the shares. Accordingly, the services rendered are recognised on a straight-line basis over the period in which the rights to receive those shares become irrevocable.\n\nThe Group measures the goods or services received, as well as the corresponding increase in equity, at the fair value of the equity instruments granted at the grant date.\n\nTo calculate this theoretical number of shares, the shares of Acerinox, S.A. are measured at their quoted price 30 trading days prior to commencement of the plan, and their subsequent increase or decrease in value is assumed by the employee. The resulting number of Performance Shares is used as the basis for determining the actual number of Acerinox, S.A. shares to be delivered (if any) at the end of each cycle, depending on the extent to which objectives are achieved and subject to compliance with the requirements set out in the regulations governing each plan.\n\nThe Group engaged an independent expert to calculate the percentage of objectives achieved, subject to market conditions. Using accepted valuation techniques (the Monte Carlo method), the expert calculated the reasonable percentage of shares attributable to each employee subject to the remuneration plan. According to this valuation, the number of shares to be delivered in the performance of each of the plan cycles would be 78,853 shares for the first plan and 203,830 shares for the second, which would represent 0.3% of the share capital of Acerinox, S.A. at the end of the three cycles.\n\nThis year, 110,563 treasury shares were delivered to Group executives as a result of the completion of the third cycle of the First Multi-Year Remuneration Plan (2022: 109.378 treasury shares delivered). The difference between the value of the treasury shares delivered (2023: EUR 1,072 thousand and 2022: EUR 1,234 thousand) and the equity instruments provisioned on the basis of the estimates made (2023 and 2022: EUR 940 thousand), after deducting withholdings on account, was moved to reserves in the amount of EUR -769 thousand and EUR -810 thousand, respectively.\n\nThe expense incurred in 2023 amounted to EUR 1,429 thousand (2022: EUR 1,617 thousand), the balancing entry of which was recognised under \"other equity instruments\". The amount recognised at year-end under \"other equity instruments\" in the balance sheet totalled EUR 4,157 thousand (2022: EUR 3,695 thousand).\n\n{107}------------------------------------------------\n\nImage /page/107/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word is in a lighter color, possibly white or light blue, which contrasts with the darker blue of the circle.\n\n#### **16.2 Other provisions**\n\nThe changes in 2023 and 2022 were as follows:\n\n(Amounts in thousands of euros)\n\n|                         | Litigation | CO2     | Other provisions | Total   |\n|-------------------------|------------|---------|------------------|---------|\n| As of 31 December 2021  | 300        | 9,643   | 10,468           | 20,411  |\n| Allocation provision    |            | 12,804  | 396              | 13,200  |\n| Application             |            | -9,835  | -97              | -9,932  |\n| Release of provisions   |            | -2      | -1               | -3      |\n| Translation differences |            |         | -15              | -15     |\n| As of 31 December 2022  | 300        | 12,610  | 10,751           | 23,661  |\n| Allocation provision    |            | 14,264  | 7,212            | 21,476  |\n| Application             | -250       | -12,658 | -478             | -13,386 |\n| Release of provisions   | -50        | -14     | -100             | -164    |\n| Translation differences |            |         | -24              | -24     |\n| As of 31 December 2023  | 0          | 14,202  | 17,481           | 31,683  |\n\n#### **CO<sup>2</sup>**\n\nThis heading includes the provisions relating to CO<sup>2</sup> emissions in the year, for which the emission allowances had yet to be surrendered at year-end (see **Note 11.1**).\n\n\"Amount used\" in the year includes derecognition of emission allowances for 2023, totalling EUR 12,658 thousand (2022: EUR 9,835 thousand) (see **Note 11.1**).\n\n#### **Litigation**\n\nAt the end of 2023, the Group continued to be involved in litigation with the Italian tax authorities concerning transfer pricing adjustments made for the years 2007 to 2015, which are explained in detail in **Note 19.5**. These legal proceedings relate to the adjustments imposed by the Italian authorities as a result of the purchase and sale transactions between the Italian Group company and Columbus Stainless (Pty) Ltd., as the transactions with the Group's Spanish factories have already been settled through an amicable procedure between the tax authorities of both countries.\n\nDuring the year, negotiations between the Italian company and the tax authorities for the years 2007 to 2013 were completed and the Group's estimates were confirmed. The Italian company has made payments arising from these agreements amounting to EUR 3.6 million, which were fully provisioned, so the provision was reduced by that amount.\n\nFor the years 2014 and 2015, the Group is in negotiations with the authorities to try to conclude the agreements on the same terms.\n\nThe amount of the provision at year-end amounted to EUR 7,556 thousand. This amount includes not only the aforementioned open litigation, but also the amounts resulting from the amicable settlements reached between the Spanish and Italian tax authorities from 2007 to 2015, which are pending enforcement in Italy. The company, in view of the opinion obtained from the experts who advise it on the subject, considers that the provision provided is sufficient to cover the amounts resulting from the litigation as well as the pending settlements\n\n#### **Other provisions**\n\n\"Other provisions\" includes mainly the measurement by Acerinox Europa, S.A.U. of the obligations arising from the collective redundancy procedure implemented in 2019 and those relating to the contribution to the Treasury set forth in Additional Provision Sixteen of Law 27/2011. The amount of this obligation, as verified by an independent expert, totals EUR 9,254 thousand. When calculating the provision, the characteristics of the employees included in the collective redundancy procedure were taken into account, together with observance of the legal requirements established by law and the applicable percentages. **Note 16.1.2** sets out the details of this collective redundancy procedure.\n\nIn addition, this year, as explained in Note 8.1, a provision for the possible obligation to dismantle the land of the Group entity in Bahru Stainless has been recorded in the amount of EUR 6,871 thousand. This provision has also been recognised as an increase in the value of assets. This provision was valued at market value and recorded at its current value.\n\n{108}------------------------------------------------\n\nImage /page/108/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a small gap at the top right. The text is also in blue, matching the color of the circle.\n\n#### **16.3 Guarantees provided**\n\nAt 31 December 2023, the Group had provided guarantees to third parties, mainly public authorities, totalling EUR 28.8 million (2022: EUR 28.2 million). This amount includes the guarantees totalling EUR 1.5 million provided to the Italian tax authorities as a result of the tax assessments arising from the tax audits described in **Note 19.5**. It also includes EUR 4.2 million deposited as a guarantee with the Ministry of Industry for credits obtained under the financial support programme for industrial investment in the framework of the public policy for reindustrialisation and strengthening industrial competitiveness (REINDUS). Guarantees totalling EUR 2.5 million were also deposited with the customs authorities.\n\nGroup management does not expect any significant liabilities to arise from these guarantees.\n\n#### **16.4 Contingencies**\n\nThere are no contingent liabilities at the end of this year or last year.\n\n#### <span id=\"page-108-0\"></span>**NOTE 17 – INCOME AND EXPENSES**\n\n#### **17.1 Revenue**\n\nThe detail of \"revenue\" in 2023 and 2022 is as follows:\n\n(Amounts in thousands of euros)\n\n|                                                   | 2023      | 2022      |\n|---------------------------------------------------|-----------|-----------|\n| Sale of goods                                     | 6,594,564 | 8,679,783 |\n| Provision of services                             | 13,414    | 8,711     |\n| Work performed by the company on its fixed assets | 7,825     | 27,371    |\n| Operating lease income                            | 622       | 567       |\n| Income from disposal of fixed assets              | 824       | 1,837     |\n| Income from grants or subsidies                   | 29,066    | 13,070    |\n| Revenues from emission allowance subsidies        | 8,031     | 7,305     |\n| Valuation at fair value of derivatives            | -2,687    | 10,701    |\n| Other income                                      | 56,342    | 7,545     |\n| TOTAL                                             | 6,708,001 | 8,756,890 |\n\nThe decline in sales compared to the previous year is due to lower demand in all markets and lower stainless-steel prices, which were partly influenced by the continuous decline in nickel prices over the course of the year.\n\nThe decrease in \"work performed by the company on its fixed assets\" is mainly due to the fact that major repairs were carried out on the steel and hot-rolling mills at one of the Group's plants last financial year, which were capitalised in accordance with the policy set out in **Note 2.8**.\n\n\"Income from grants or subsidies\" includes the extraordinary subsidies from public bodies listed in **Note 15**.\n\n\"Other income\" mainly includes the compensation received from the insurance company as a result of the incident at the Group's factory in the United States last year.\n\n#### **17.2 Staff costs**\n\nThe detail of \"staff costs\" incurred in 2023 and 2022 is as follows:\n\n| (Amounts in thousands of euros)         |         |         |\n|-----------------------------------------|---------|---------|\n|                                         | 2023    | 2022    |\n| Wages and salaries                      | 487,654 | 503,064 |\n| Social security                         | 113,786 | 109,684 |\n| Contributions to employee benefit plans | 11,183  | 10,897  |\n| Contributions to defined benefit plans  | 6,473   | 9,503   |\n| Termination benefits                    | 3,138   | 2,621   |\n| Variation in employee benefit provision | 1,709   | -947    |\n| Other staff costs                       | 12,603  | 18,941  |\n| TOTAL                                   | 636,546 | 653,763 |\n\n{109}------------------------------------------------\n\nImage /page/109/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue circle. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle partially surrounds the text, creating a sense of enclosure and emphasis.\n\nDue to the unprecedented high prices of electricity and gas, on 16 March 2023, the Labor Authority was informed of the company's decision to extend the Temporary Layoff Plan (ERTE) agreed on 16 March 2022, of the Campo de Gibraltar (Cádiz) factory, whereby a Temporary Layoff Plan was approved due to economic and productive circumstances. This extension has a duration of one year from 17 March 2023, includes the entire workforce and allows for the adaptation of staff to the production needs prevailing at any given time, thus providing considerable flexibility for management purposes. As it is an extension of the existing ERTE, it creates an environment of safety and certainty which is beneficial to all parties, helping to maintain jobs and enabling the workforce to adapt to the portfolio of orders. This ERTE has been applied to all workshops throughout the year, although the necessary activity has been maintained in order to comply with the commitments acquired with our customers.\n\nThe average number of employees for 2023 and 2022, by category, is as follows:\n\n|                       | 2023  |       | 2022  |       |\n|-----------------------|-------|-------|-------|-------|\n|                       | Men   | Women | Men   | Women |\n| Senior Vice President | 9     |       | 11    |       |\n| Director              | 24    | 7     | 19    | 5     |\n| Manager               | 243   | 53    | 220   | 48    |\n| Analyst / Supervisor  | 604   | 210   | 569   | 181   |\n| Specialist            | 339   | 124   | 312   | 130   |\n| Administrative staff  | 595   | 466   | 598   | 462   |\n| Operators             | 5,347 | 215   | 5,444 | 230   |\n| TOTAL                 | 7,161 | 1,075 | 7,173 | 1,056 |\n\nThe detail of the employees, including directors, at 31 December, by gender and category, is as follows:\n\n|                       | 2023  |       | 2022  |       |\n|-----------------------|-------|-------|-------|-------|\n|                       | Men   | Women | Men   | Women |\n| Board Members         | 7     | 4     | 7     | 4     |\n| Senior Vice President | 9     |       | 9     |       |\n| Director              | 25    | 7     | 19    | 5     |\n| Manager               | 243   | 49    | 220   | 49    |\n| Analyst / Supervisor  | 624   | 226   | 570   | 176   |\n| Specialist            | 332   | 118   | 321   | 138   |\n| Administrative staff  | 599   | 476   | 598   | 458   |\n| Operators             | 5,313 | 217   | 5,356 | 214   |\n| TOTAL                 | 7,152 | 1,097 | 7,100 | 1,044 |\n\nThese figures do not include 6 workers on partial retirement plan (60 workers in 2022).\n\nAt 31 December 2023, the number of employees in Spain with a disability equal to or greater than 33% was 43 (39 men and 4 women) (44 in 2022 (43 men and 1 woman)).\n\nAll the companies comply with the provisions of the General Law on the Rights of Persons with Disabilities and their Social Inclusion, with the exception of Acerinox Europa, S.A.U. which, due to the retirements that have taken place in recent years, does not comply with the provisions of the aforementioned Law at 31 December 2023. To remedy this, on 15 December 2023 a request was submitted to the Junta de Andalucía for authorisation to adopt alternative measures. On 1 February 2024 this authorisation was received.\n\nAt Acerinox Europa, the collective redundancy procedure approved in 2019 resulted in the departure in 2022 of the last 4 employees signed up to the plan.\n\n{110}------------------------------------------------\n\n#### **17.3 Other operating expenses**\n\nThe detail of \"other operating expenses\" is as follows:\n\n(Amounts in thousands of euros)\n\n|                                | 2023    | 2022      |\n|--------------------------------|---------|-----------|\n| Rentals                        | 18,097  | 15,735    |\n| Commercial expenses            | 179,260 | 267,503   |\n| Supplies                       | 347,689 | 530,636   |\n| Maintenance                    | 87,134  | 99,032    |\n| Outside services               | 185,022 | 188,011   |\n| Insurance                      | 28,429  | 23,210    |\n| Banking services               | 3,929   | 5,408     |\n| Other operating expenses       | 44,699  | 31,543    |\n| Taxes                          | 18,031  | 30,670    |\n| Changes in current provisions  | 1,955   | 3,295     |\n| Losses on sale of fixed assets | 2,719   | 1,987     |\n| Other extraordinary expenses   | 18,812  | 429       |\n| TOTAL                          | 935,776 | 1,197,459 |\n\nOf note was the generalised decrease in all costs due to the decrease in sales and productions. The decrease in the supplies item stands out as a result of the decrease in prices compared to the maximums reached in Europe last year, as well as the decrease in the tonnage produced. **Note 4.1.3** includes detailed information on the risk posed to the Group by the volatility of energy prices.\n\n#### <span id=\"page-110-0\"></span>**NOTE 18 – NET FINANCE COSTS**\n\nThe detail of \"net finance costs\" is as follows:\n\n(Amounts in thousands of euros)\n\n|                                                                                     | 2023     | 2022    |\n|-------------------------------------------------------------------------------------|----------|---------|\n| Interest income and other financial income                                          | 79,641   | 25,207  |\n| Dividend income                                                                     | 5        | 866     |\n| TOTAL FINANCIAL INCOME                                                              | 79,646   | 26,073  |\n| Interest and other financial expenses                                               | -101,044 | -62,799 |\n| Impairment and loss on disposal of financial investments                            | 0        | -3      |\n| TOTAL FINANCIAL EXPENSES                                                            | -101,044 | -62,802 |\n| Income from exchange differences                                                    | 2,273    | -4,624  |\n| Results from revaluation of financial instruments at fair value (currency forwards) | 317      | -3,141  |\n| FINANCIAL INCOME FROM EXCHANGE DIFFERENCES                                          | 2,590    | -7,765  |\n| NET FINANCIAL COSTS                                                                 | -18,808  | -44,494 |\n\n\"Interest income\" includes mainly the income arising from the cash placements made by the Group. The increase compared to the previous year is mainly due to higher interest rates and the Group's higher cash investments in USD. **Note 4.1.2** includes detailed information on the management of interest rate risk in the Group.\n\nBorrowing costs include mainly the interest accrued on bank borrowings and bonds issued, which are explained in **Note 12.2.3**. The increase over the previous year is due to higher interest rates.\n\nLastly, gains or losses from translation differences arise in the course of the Group's commercial transactions as well as its financial and investment transactions. The Group uses derivative financial instruments to hedge most of the transactions performed in a currency other than the functional currency of each country. The use of these instruments ensures that any exchange rate fluctuations are offset by changes with the opposite sign in respect of the arranged derivative. The differences between the two amounts are mainly due to the interest rate differences between the currencies involved in the exchange rate insurance taken out and the differences between the insurance taken out and the monetary items in foreign currency.\n\n{111}------------------------------------------------\n\nImage /page/111/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circular outline. The wordmark is in a darker shade of blue, contrasting with the lighter blue of the surrounding circle. The overall design is simple and corporate, conveying a sense of stability and professionalism.\n\n#### **NOTE 19 – TAX MATTERS**\n\n#### **19.1 Legislative amendments**\n\nThe most significant regulatory amendments approved during this period are as follows:\n\n• In March 2022, the Organisation for Economic Co-operation and Development (OECD) approved the new international taxation model known as Pillar 2, within the scope of what are known as GloBE standards. These rules aim to ensure that multinational groups pay a minimum level of tax on their profits in each jurisdiction in which they operate. The Pillar 2 standard apply to all multinational groups with a turnover of more than EUR 750 million. The basic principle of this standard, with some exceptions, is to ensure that the minimum payment in each jurisdiction is at least 15%, requiring the establishment of a supplementary tax system.\n\nA Directive was recently adopted at European Union level that defines the content of the GloBE standards in order to ensure their consistent and harmonised application in all EU Member States. This Directive should have been transposed by EU member states by 31 December 2023 at the latest, with effect from 2024. Transposition is pending in Spain, although the prior public consultation document on the transposition of the Pillar 2 Directive into Spanish law was published on 6 March 2023.\n\nThe Group has carried out an analysis of the potential impacts of the application of this standard on the Group. The country-by-country report for 2022 presented this year has been used as a basis for the analyses. The GloBE standards provide for the possibility of applying safe harbours, based on a number of established parameters, which are calculated per jurisdiction on the basis of data published in the country-by-country report. Compliance with these parameters allows companies to limit the number of jurisdictions affected by the calculation of the minimum payment. The implementation of safe harbours is a temporary measure applicable for the first three years of implementation of the law, i.e. from 2025 to 2027.\n\nFrom the analysis carried out by the Group, it follows that all jurisdictions significant to the Group would be eliminated from the application of the minimum tax, so the Group does not expect the application of this standard to have a significant impact.\n\n• In Spain, Law 38/2022 of 27 December introduced, among other things, a temporary measure concerning the calculation of corporate income tax for companies taxed under the tax consolidation regime. Commencing with tax periods beginning in 2023, the taxable income of the tax group will be determined by integrating the taxable income of the entities forming part of the tax group and 50 per cent of the individual tax losses. Any remaining individual tax losses not accounted for in the tax group's taxable income shall be integrated evenly over the initial ten tax periods beginning on or after 1 January 2024.\n\nThe group has applied the rule in the calculation of the tax for this year, although it has had no economic impact as the tax base is negative in any case. The Group has recognised carry-forward tax losses that have not been recognised for tax purposes and which are to be included on a straight-line basis over the next ten years.\n\n• On 24 May, also in Spain, Law 13/2023 was approved, which introduces amendments to Law 27/2014 on corporate income tax. In particular, the amendment concerns the calculation of the operating profit applicable to the limitation of the deductibility of financial expenses. The provision makes it clear that income, expenses or earnings that are not included in the basis of assessment for this tax are never part of the operating profit. This prevents the inclusion of dividends from foreign subsidiaries, which are exempt from the calculation of the tax, in the calculation of operating profit. The rule is applicable from 1 January 2024.\n\nThe Spanish tax group has accumulated excess operating profits that have not been utilised in previous years and that can be utilised over a period of 5 years, meaning that the application of this standard should have no impact in the medium term. From the fifth year onwards, Acerinox could be affected by this standard due to its financial structure if the operating profit of the consolidated tax Group is insufficient to cover the net financing costs, but the forward-looking estimates of the consolidated tax group made at the end of the year do not appear to show any material impact.\n\n• Corporate income tax on 18 January 2024, the Constitutional Court has declared certain corporate tax measures introduced by Royal Decree Law 3/2016, of 2 December, unconstitutional. The Court considers that the approval of these measures by Royal Decree-Law has violated Article 86.1 of the Spanish Constitution, as this regulatory instrument cannot \"affect the rights, duties and freedoms of citizens regulated in Title I\". In particular, it considers that the duty to contribute to the support of public expenditure is affected.\n\n{112}------------------------------------------------\n\nImage /page/112/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned within a white circle, which is partially enclosed by a thicker, blue arc that curves around the bottom and sides of the circle, giving the impression of a stylized globe or emblem.\n\nThe changes to corporate income tax that have been annulled include, in particular: the setting of the 25% limitation for offsetting tax losses, the introduction of a limit on the application of deductions for double taxation and the obligation to automatically include in the tax base the impairment of holdings deducted in previous years.\n\nWith the annulment of this Royal Decree 3/2016, the original Corporate Income Tax Act is once again applicable according to its original wording, which allows the recoverability of tax losses with a limit of 70% (instead of 25%) of the taxable income generated in the year. This measure has a significant impact on the recognition of unused tax credits, which the Group has taken into account this year, allowing it to capitalise the tax credits generated this year as explained in **Note 19.3.3**.\n\nThe Group, in anticipation of a possible declaration of invalidity, challenged its corporate income tax returns for the years 2016 to 2020 in 2021. These claims are currently before the National High Court. In 2022, it also challenged the 2021 corporate income tax return.\n\nThe Group, in view of the final judgement of the Constitutional Court, considers that its claims should be resolved in 2024, which will mean an income for the Group of EUR 11.5 million plus interest. These refunds mainly correspond to the higher application of carry-forward tax losses from previous years. The Group has not recognised any asset for this item during the year as it was not applicable at year-end and it has not received any notification from either the National High Court or the Tax Agency regarding the possible enforcement of the judgement.\n\n• In South Africa, the tax rate applicable for the calculation of income tax has been changed from 28% to 27%. The Group has included the effect of the change in rates on deferred tax assets and liabilities, which has had a positive effect on the income statement of EUR 437 thousand as the Group company in South Africa has mainly deferred liabilities as a result of the different accounting and tax treatment of depreciation and amortisation.\n\nIn 2022, no significant legislative amendments were passed relating to corporate income tax that could have an impact on the Group.\n\n#### **19.2 Income tax expense**\n\nThe income tax expense recognised was as follows:\n\n| (Amounts in thousands of euros) |         |         |\n|---------------------------------|---------|---------|\n|                                 | 2023    | 2022    |\n| Current tax                     | 204,632 | 262,590 |\n| Deferred taxes                  | -66,527 | -2,178  |\n| Income tax                      | 138,105 | 260,412 |\n\nThe increase in deferred tax in the year is mainly due to the recognition of tax credits relating to losses incurred by certain Group companies. **Note 19.3.3** explains the recoverability analyses conducted by the Group this year with respect to tax loss carryforwards. No additional impairment losses had to be recognised this year; on the contrary, tax credits were recognised for tax loss carryforwards generated this year, amounting to EUR 80,465 thousand, mainly corresponding to the Spanish tax group and the Columbus Stainless entity (2022: EUR 15,550 thousand recognised in the Spanish tax consolidation).\n\nThe amount recognised under \"other taxes\" in the consolidated statement of profit or loss includes the taxes paid abroad as a result of the withholdings made on the payment of interest and dividends.\n\nThe parent received dividends from its subsidiaries in the amount of EUR 306 million, most of which were exempt from tax withholdings abroad (2022: EUR 488 million, and practically all of them were exempt from taxation).\n\nWithholdings on interest payments are deductible from corporate income tax under the double taxation conventions, and they reduce the income tax expense.\n\n{113}------------------------------------------------\n\nImage /page/113/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle, which appears to be a thick line. The background is white.\n\nA reconciliation of the income tax expense recognised in the consolidated statement of profit or loss to the accounting profit is presented below:\n\n| (Amounts in thousands of euros)                               |      | 2023    | 2022         |\n|---------------------------------------------------------------|------|---------|--------------|\n| Net profit (loss) for the year                                |      | 228,128 | 556,054      |\n| Non-controlling interests                                     |      | -11,161 | 14,332       |\n| Income tax                                                    |      | 138,105 | 260,412      |\n| Other taxes                                                   |      | 273     | 477          |\n| Profit (loss) before tax                                      |      | 355,345 | 831,275      |\n| Tax on profits using local tax rate                           | 25 % | 88,836  | 25 % 207,819 |\n| Effects on tax charge:                                        |      |         |              |\n| Effect of tax rates for foreign companies                     |      | 1,264   | -2,129       |\n| Non-deductible expenses                                       |      | 39,877  | 52,750       |\n| Tax incentives not recognised in the income statement         |      | -2,301  | -2,885       |\n| Non-taxable income                                            |      | -555    | 2,721        |\n| Adjustment for prior years                                    |      | 1,167   | -914         |\n| Adjustment to tax rates related to deferred taxes             |      | -820    | -1,197       |\n| Provision for tax litigation, tax assessments and settlements |      | -104    | -110         |\n| Unrecognised tax credits                                      |      | 12,696  | 5,509        |\n| Unused tax credits used in the year                           |      | -12     | -709         |\n| Other                                                         |      | -1,943  | -443         |\n| Income tax                                                    |      | 138,105 | 260,412      |\n\nThe amount of non-deductible expenses, mainly due to the non-deductibility of the impairment of assets recognised in the Malaysian company Bahru Stainless is noteworthy, both this year and in the past. In addition, the amount of unrecognised tax credits has increased due to tax losses in some subsidiaries where the recognition criteria are not met.\n\nThe tax incentives and other tax credits not recognised in the consolidated statement of profit or loss relate mainly to tax credits for R&D&I activities.\n\n#### **19.3 Deferred taxes**\n\nThe changes in deferred tax assets and liabilities were as follows:\n\n(Amounts in thousands of euros)\n\n|                                              | 2023          |                | 2022          |                |\n|----------------------------------------------|---------------|----------------|---------------|----------------|\n|                                              | Prepaid taxes | Deferred taxes | Prepaid taxes | Deferred taxes |\n| Balance as of 1 January                      | 101,225       | 227,784        | 105,848       | 200,051        |\n| Expenses / (Income) for the period           | 48,106        | -18,421        | 63,319        | 61,251         |\n| Taxes taken directly to shareholders' equity | 2,926         | -13,162        | -30,381       | -1,205         |\n| Exchange rate variations                     | -233          | -3,783         | 72            | 5,380          |\n| Transfers                                    | 17,242        | 17,242         | -37,739       | -37,739        |\n| Other variations                             | 0             | -3,759         | 106           | 46             |\n| Balance as of 31 December                    | 169,266       | 205,901        | 101,225       | 227,784        |\n\n{114}------------------------------------------------\n\nImage /page/114/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The text is positioned within a partial blue circle, which curves around the top and sides of the word, creating a sense of enclosure and unity. The overall design is simple, clean, and corporate, conveying a sense of professionalism and reliability.\n\nThe origin of the deferred tax assets and liabilities is as follows:\n\n|                                                | Assets  |         | Liabilities |          | Net      |          |\n|------------------------------------------------|---------|---------|-------------|----------|----------|----------|\n|                                                | 2023    | 2022    | 2023        | 2022     | 2023     | 2022     |\n| Goodwill and other intangible assets           | 2,526   | 6,783   | -12,911     | -16,764  | -10,385  | -9,981   |\n| Property, plant and equipment                  | 1,120   | 683     | -135,630    | -147,684 | -134,510 | -147,001 |\n| Financial assets                               | 24      | 1,811   | -184        | -687     | -160     | 1,124    |\n| Inventories                                    | 3,442   | 4,337   | -79,807     | -75,354  | -76,365  | -71,017  |\n| Other assets                                   | 2,350   | 31      | -6,172      | -14,213  | -3,822   | -14,182  |\n| Provisions                                     | 9,531   | 12,895  | -1,464      | 2,637    | 8,067    | 15,532   |\n| Employee benefit plan                          | 30,945  | 25,729  | -11         | 38       | 30,934   | 25,767   |\n| Financial liabilities                          | 2,330   | 3,606   | -5,921      | -8,986   | -3,591   | -5,380   |\n| Other liabilities                              | 1,562   |         | -10,068     | -11,047  | -8,506   | -11,047  |\n| Other tax deductions                           | 22,663  | 19,845  |             |          | 22,663   | 19,845   |\n| Unused tax losses                              | 146,596 | 80,609  |             |          | 146,596  | 80,609   |\n| Provision for tax litigation                   |         |         | -7,556      | -10,828  | -7,556   | -10,828  |\n| Deferred tax assets/liabilities                | 223,089 | 156,329 | -259,724    | -282,888 | -36,635  | -126,559 |\n| Offsetting deferred tax assets and liabilities | -53,823 | -55,104 | 53,823      | 55,104   |          |          |\n| Deferred tax assets/liabilities                | 169,266 | 101,225 | -205,901    | -227,784 | -36,635  | -126,559 |\n\nMost of the deferred taxes have a reversal period of more than one year.\n\nAs laid down in the corporate income tax accounting policy (**Note 2.19**), the Group only offsets deferred tax assets and liabilities when there is a legally enforceable right to do so, the assets and liabilities correspond to the same tax authority and the Group plans to realise current tax assets or settle current tax liabilities on a net basis.\n\n#### **19.3.1 Deferred tax liabilities**\n\nThe deferred tax liabilities recognised include those arising from property, plant and equipment and relate mainly to the different tax and accounting treatment of depreciation as permitted by the laws of certain countries. These liabilities arose mainly from North American Stainless, Inc., Columbus Stainless, Ltd. and the VDM Metals Group. Deferred tax liabilities from inventories are also significant due to the different accounting and tax treatment of inventory valuation; they arise mainly from Germany.\n\nWith respect to the deferred tax liabilities arising from investments in subsidiaries, as explained in **Note 3**, certain companies forming part of the Consolidated Group have reserves which could be taxable if distributed, since certain legislation envisages withholdings at source that affect the payment of dividends, as well as limitations on the deductibility of gains from other countries distributed in the form of dividends. The Group recognises the tax effect in this connection provided that it considers that such reserves will have to be distributed in the foreseeable future. On the other hand, the Spanish General State Budget Law for 2021 (Law 11/2020, of 30 December) includes, among other measures, a corporate income tax amendment affecting the exemption from taxation of dividends received from Group companies in certain circumstances. As a result of the entry into force of this amendment to income tax, the parent of the Acerinox Group has had its tax exemption for dividends received reduced to 95%, whereby it is now taxed on 5% of the dividends received from subsidiaries, which are treated as non-deductible expenses relating to management of the ownership interest. As with the distributable reserves mentioned in the previous paragraph, the Group also takes into account the tax effect if it believes that the distribution of reserves from subsidiaries will be required in the foreseeable future.\n\nThis limitation could give rise to the recognition of a deferred tax liability for the undistributed retained earnings of Group companies, provided that these are expected to be repatriated in the form of dividends in the foreseeable future.\n\nAlthough the Group does not have a general policy of distributing dividends from subsidiaries to the parent, each year the Group analyses the equity position of all its subsidiaries, while also taking into account existing taxes, in order to determine whether reserves should be repatriated through the distribution of dividends. In view of the significant amount of dividends distributed by North American Stainless in the last three years and at their level of income generation year-on-year, the Group considers that it will not distribute dividends from the reserves of the Group companies in the foreseeable future and, accordingly, it did not recognise a deferred tax liability in this connection. Also, there are very few companies in the Consolidated Group that have significant distributable reserves that will be distributed in the foreseeable future.\n\n{115}------------------------------------------------\n\nImage /page/115/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is positioned inside a blue circle that is not fully closed at the top.\n\n#### **19.3.2 Deferred tax assets**\n\nAt 31 December 2023 and 2022, the Group had tax assets arising from carry-forward tax losses, to be used within the following periods:\n\n| (Amounts in thousands of euros) |  |\n|---------------------------------|--|\n|---------------------------------|--|\n\n|                     | 2023    | 2022    |\n|---------------------|---------|---------|\n| From 1 to 5 years   | 68,079  | 3,008   |\n| From 6 to 10 years  | 18,401  | 76,206  |\n| From 11 to 20 years | 940     | 115     |\n| From 21 to 30 years |         | 2,332   |\n| No expiration date  | 243,206 | 179,769 |\n| TOTAL               | 330,626 | 261,430 |\n\nNot all the tax assets included in the table have been recognised by the Group. The recognised tax assets amounted to EUR 146,596 thousand in 2023 (2022: EUR 80,609 thousand).\n\nThe distribution by country of the recognised tax assets is as follows:\n\n| (Amounts in thousands of euros) | 2023    | 2022   |\n|---------------------------------|---------|--------|\n| Spain                           | 125,744 | 61,179 |\n| South Africa                    | 13,465  |        |\n| USA                             | 42      | 13,903 |\n| France                          | 2,125   | 2,215  |\n| Poland                          | 11      |        |\n| Italy                           | 1,391   |        |\n| Sweden                          | 2,589   | 2,738  |\n| Chile                           | 237     | 250    |\n| Colombia                        | 137     | 115    |\n| UK                              | 58      | 209    |\n| Mexico                          | 699     |        |\n| Argentina                       | 98      |        |\n| TOTAL                           | 146,596 | 80,609 |\n\nDuring the year, tax credits recognised have increased mainly due to the capitalisation of new credits generated in the year as a result of tax losses obtained by both the Spanish consolidated tax group and Columbus.\n\nAs explained in **Note 19.3.1**, the Group considers that after the annulment of Royal Decree 3/2016 and the possibility of offsetting tax bases with 70% of the tax bases generated in the future, this will allow their recovery in a reasonable period of less than ten years.\n\nA comparison of the two tables above reveals that the Group has unrecognised tax assets amounting to EUR 184,030 thousand, equal to tax losses of EUR 759 million, which were not recognised for accounting purposes as they did not meet the recognition criteria (2022: EUR 180,821 thousand of unrecognised tax assets, equal to losses of EUR 748 million).\n\nThe Group also has assets for unrecognised temporary differences of EUR 360.9 million (EUR 266.3 million in the previous year) arising from the accounting impairment of Acerinox, S.A.'s investments in some of its investees, which have not been recognised as the timing of their reversal is not known, and from the impairment of assets recognised in other entities. These assets are not deductible until the assets giving rise to the related temporary difference are realised.\n\nOn 22 June 2015, the Group Company Bahru Stainless received confirmation from the Malaysian Ministry of Economy that tax relief had been approved in respect of the investments made in the country from 2009 to 2014. This relief consists of corporate income tax credits for an amount equal to the investments made in certain items of property, plant and equipment, totalling MYR 1,806 million (EUR 356 million to the tax base). As in the case of the tax loss carryforwards, the Group did not recognise a deferred tax asset in this connection as it was still unable to estimate the timing of the recoverability thereof at the reporting date. At the same time, the Company also has unused temporary differences as a result of the different depreciation and amortisation methods for accounting and tax purposes (\"capital allowances\"), amounting to EUR 340 million (2022: EUR 361 million). These temporary differences have an unlimited utilisation period in Malaysia.\n\n{116}------------------------------------------------\n\nImage /page/116/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is enclosed within a blue circle, with the top portion of the circle being thicker than the bottom portion. The background is white.\n\nThe Group Company North American Stainless is also entitled to tax relief for investments in assets that contribute to recycling. This relief is deducted from the calculation of the Kentucky State tax and amounted to EUR 528 million at 2023 year-end (year-end 2022: EUR 549 million). Of the total tax relief, EUR 16.1 million expire in 2028 and EUR 4.5 million expire in 2031. The rest are unlimited. Application of this relief is limited to 50% of the tax payable in the State of Kentucky, or USD 2.5 million/year. The Group only recognises a deferred tax asset for assets arising from investments which expire and relate to a specific tax relief programme approved in 2005 by the State of Kentucky (Major Credits Program). At 2023 yearend, EUR 7.2 million (2022: EUR 6.8 million) were recognised as deferred tax assets. The Group has recognised an additional EUR 629 thousand this year.\n\nDeferred tax assets arising from deductions pending utilisation, amounting to EUR 22,663 thousand (2022: EUR 19,845 thousand), relate mainly to the Spanish tax group, except for the EUR 7.2 million mentioned in the preceding paragraph in relation to North American Stainless and EUR 671 thousand in relation to Columbus Stainless. The Group also took these tax benefits into consideration when conducting the recoverability analyses.\n\n#### **19.3.3 Analysis of the recoverability of deferred tax assets**\n\nAs stated in the accounting policies, the Group recognises deferred tax assets in the consolidated statement of financial position provided that those assets are recoverable within a reasonable period, also taking into consideration the legally established limitations on their use. The Group considers a period of approximately ten years to be reasonable if permitted by tax legislation.\n\nTo assess the recoverability of the unused tax assets, the Group prepares a five- to ten-year budget for each of the companies with recognised tax assets, based on which it performs the tax adjustments necessary to determine the tax bases. The Group also takes into account the limitations on the offset of tax bases established in the respective jurisdictions, as well as the minimum payment regulations. In addition, the Group assesses the existence of deferred tax liabilities against which tax losses may be offset in the future.\n\nIn preparing budgets, the Group considers the financial and macroeconomic circumstances and those of the stainless-steel market itself, adapted to the entity's operating environment. Parameters such as expected growth, use of installed production capacity, prices, etc. are projected on the basis of the forecasts and reports of independent experts, as well as historical figures and the targets set by management. Relevant key assumptions such as exchange rates, raw material prices or energy prices are extrapolated using highly conservative criteria, always tied to the most recent values recorded in the pertinent markets at the date of the analysis.\n\nAt the end of the year, the Group entities that record activated tax credits in their financial statements are mainly Spanish. Columbus Stainless, the Group's company in South Africa, has also recorded the tax credits generated during the year, which are the only ones pending offset.\n\n• In the case of the Spanish entities, the tax assets arise mainly from the consolidated tax group in Spain, which comprises all the Spanish Group companies with the exception of those established in the regions of Álava, Vizcaya and Guipúzcoa. Tax assets arising from tax loss carryforwards from the consolidated tax group in Spain amounted to EUR 220 million at year-end, of which EUR 96 million were not recognised as deferred tax assets. In this financial year, the fall in demand, due to high inventories in the supply chain, as well as the decrease in stainless-steel prices in Europe, which reached record lows, caused some of the Group's Spanish companies to report losses. Following an appropriate impairment analysis, the Group has deemed it appropriate to capitalise the tax credits incurred this year.\n\nIn Spain there are limitations on the use of carry-forward tax losses. Royal Decree 3/2016 introduced an amendment to the Corporate Income Tax Act, limiting the possibility of offsetting carry-forward tax losses to 25% of the taxable income generated in a given year. As explained in Note 19.1 on regulatory modifications, the Constitutional Court has declared this Royal Decree null and void, so that the limitations established in the original Corporate Income Tax Act, which raise the compensation percentage to 70%, are back in force. In the case of entities subject to the tax regimes in force in Álava, Vizcaya and Guipúzcoa, the limitation is 50%.\n\nAs explained in Note 8.1, in this financial year, the Group has updated the five-year results forecasts based on the new circumstances and taking into account the future strategic plans approved by the management, which have been designed with the aim of trying to improve the results of Acerinox Europa, the main component of the Spanish fiscal Group, redirecting a greater part of its sales towards end customers and towards products with higher added value. The Group has also engaged an independent expert to perform an impairment analysis.\n\nTo analyse the recoverability of the tax credits capitalised in the Spanish tax group, the Group has taken into account the budgets of Acerinox Europa prepared by the independent expert, in addition to the five-year budgets of the other companies in the consolidated tax group.\n\n{117}------------------------------------------------\n\nImage /page/117/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The word is positioned inside a blue circle that is open on the left side.\n\nThe key assumptions considered in the preparation of the budgets are based on demand estimates, raw material and selling prices, exchange rates, consumer price increases, energy costs estimates and the Company's strategy itself.\n\nIn view of all these aspects and taking into account the new limitations on the application of carry-forward tax losses, the five-year budgets extrapolated to ten years taking into account historical average yields and margins, justify the recovery of all the credits capitalised in a period of less than ten years and all the deductions pending application, also allowing the Group to recover the carry-forward tax losses generated in this year, amounting to EUR 259 million, so it has capitalised them.\n\nSensitivity analyses were performed on these estimates to determine the risk that a change in the assumptions may require an additional impairment loss to be recognised on these deferred tax assets. The Group has adopted a prudent approach this year, preferring only to capitalise the tax credits generated this year and not to exceed the ten-year limit established in its policy. Capitalised tax credits have a recovery period of eight years. A 10% fluctuation of the considered results would allow for a further recovery of the capitalised tax bases in a period of less than ten years. Among the possible ten-year projection scenarios, the Group selected that which it deems the most reasonable on the basis of historical factors and in the five-year budget made by the independent expert.\n\n- The aforementioned circumstances in the European market have also affected Columbus, the Group's South African factory, as Europe is its main export market. The successful strategy followed by the company, which consists of balancing stainless-steel production with carbon steel for the local market, allows Columbus to be less exposed to the situation of the international markets. **Note 8.1** includes a detailed analysis of the assumptions considered in the fiveyear budgets prepared by management. These same budgets are the basis for the analysis of the recoverability of the tax credits capitalised this year. The company had no outstanding tax credits from previous years. With the approved budgets, the Group expects to recover the carry-forward tax losses within three years and has therefore capitalised the corresponding tax credits.\n- With respect to the other European entities, the recognised tax assets arose from the crisis years, and the amount thereof has been reduced since 2013 through the generation of profits, enabling their partial recovery. The transfer pricing policies adopted by the Group to remunerate and define transactions with distributors render it unlikely that those entities will suffer significant losses. The existence of a transfer pricing bilateral advance pricing agreement with similar entities and the various mutual agreements reached in various countries make it unlikely that the results of those entities will differ significantly from the projected results. Therefore, the conclusions reached are not expected to change. The Group analysed the recoverability of the tax assets and concluded that, based on the estimated results, they are expected to be recoverable within a reasonable period of less than ten years.\n\n#### **19.4 Current tax**\n\nAt 31 December 2023, there is a current income tax asset balance of EUR 13,506 thousand (2022: EUR 22,770 thousand) and a current income tax liability of EUR 12,601 thousand (2022: EUR 58,295 thousand).\n\n#### **19.5 Tax audits and years open for review**\n\n#### **19.5.1 Tax audits**\n\nThe detail of the status of each of the tax audits under way at 2023 year-end, or that were concluded but signed on a contested basis and are currently under appeal, is as follows:\n\n#### **Italy**\n\nIn 2011, the subsidiary Acerinox Italia, S.r.l. underwent a tax audit for 2007, 2008 and 2009.\n\nBetween 2012 and 2014, the tax assessments for the three years were received, primarily indicating transfer pricing adjustments in relation to sale and purchase transactions between the Company and the Group's factories in Spain and, to a lesser extent, in South Africa. The resulting tax payable amounted to EUR 16 million, plus interest of EUR 3.5 million. No penalties were imposed.\n\nSubsequently, in 2016, 2017, 2018, 2019 and 2021, without receiving prior notice of the commencement of tax audits, the Company received transfer pricing tax assessments relating to 2011, 2012, 2013, 2014 and 2015, which automatically applied criteria similar to those followed in the previous tax audits. These tax assessments resulted in adjustments to the tax base of\n\n{118}------------------------------------------------\n\nImage /page/118/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, bold, sans-serif font. The word is positioned inside a blue circle that is not fully closed at the top.\n\nEUR 4.3 million in 2011, EUR 4.9 million in 2012, EUR 3 million in 2013, EUR 2.3 million in 2014 and EUR 3.8 million in 2015, and amounts payable of EUR 1.5 million, EUR 1.6 million, EUR 1 million, EUR 954 thousand and EUR 1.4 million, respectively. No penalties were imposed in this case either. The Group lodged appeals against all these tax assessments at the Milan Provincial Tax Commission within the respective time limits, and at the same time requested the suspension of payment of the debts until the end of the procedures. In addition, a request was filed at the Spanish and Italian authorities to eliminate double taxation on the basis of Convention 90/436/EEC, of 23 July 1990. The Group has provided guarantees of EUR 1.5 million to cover the suspension of the debts in Italy.\n\nIn addition, in December 2018 the request for the elimination of double taxation with South Africa was submitted in Italy in respect of the tax audits under way in relation to 2011 to 2013. On 9 March 2021, the Company had to waive this procedure so that regularisations derived from friendly agreements could be initiated and negotiations carried out to apply the same criteria reached in such agreements to transactions with third countries.\n\nOn 3 October 2019, both the Group entity in Italy and the Spanish entities affected by the adjustments were notified of the agreement reached by the Spanish and Italian authorities for 2007 to 2013, which reduced the transfer pricing adjustments initially proposed by the Italian tax inspectors for the Spanish entities from EUR 84 million to EUR 41 million and completely eliminated double taxation. Following the aforementioned agreements, Spain recognised a tax refund of EUR 5.8 million and an increase in the tax losses equal to EUR 5.9 million in tax assets. In Italy, the agreements resulted in the elimination of all the tax losses and, accordingly, the Group derecognised tax assets recognised amounting to EUR 8.3 million. The amounts recoverable in Spain were received on 17 February 2020. The Group nevertheless submitted pleadings in Spain against the execution of the agreements, due to failure to recognise late-payment interest for the refundable amount of EUR 5.9 million.\n\nOn 18 November 2021, the notifications of the amicable settlements reached between the Spanish and Italian authorities for the 2014 and 2015 tax years were received. With regards to 2014, the Italian authorities cancelled all transfer pricing adjustments made on transactions with Spanish companies. As for 2015, Italy waived EUR 2.2 million of the adjustments initially imposed, leaving adjustments of EUR 404 thousand to be recognised in Spain as less taxable income in 2015. On 12 April 2022, a refund was received in Spain of EUR 47 thousand corresponding to the corporate income tax liability plus EUR 3 thousand in late payment interest. In addition, tax loss carryforwards in Spain have increased by EUR 101 thousand.\n\nAll agreements reached between the Spanish and Italian authorities are pending execution in Italy. Although the amicable agreements only extend to the transactions performed between the Italian entity and the respective factories in Spain, the same agreement should technically apply to sale and purchase transactions with third countries. In this respect, and following discussions held with the Italian tax authorities, the Group has closed the negotiations relating to the transactions between Italy and the Columbus Stainless Group company from 2007 to 2013. As a result of the aforementioned agreements, on 16 June, the Group company Acerinox Italia has paid EUR 3,633 thousand (EUR 2,544 thousand of corporate income tax and EUR 1,096 thousand of interest), which the company had already provisioned, and has therefore proceeded to reduce the provision by the aforementioned amounts.\n\nIn relation to the appeals filed for the years 2014, 2015 and 2016, the Milan Provincial Tax Commission has already been informed of the agreements reached and the hearing has been postponed in order to try to reach an agreement on the same terms and for the same reasons as in previous years.\n\nThis year, following the submission of the transfer pricing documentation for 2017, the Company has received transfer pricing adjustment assessments, applicable to the tax base in the amount of EUR 1.1 million. Prior to the issuance of the assessments, the tax authorities informed the Group that they are willing to close all outstanding adjustments, to accept the transfer pricing policy adopted by the Group and to finalise the recurring transfer pricing adjustments.\n\nHowever, while negotiations continue, the Group intends to follow the same procedure for 2017 as in previous years, i.e. it will file an appeal in Italy and request the elimination of double taxation in Spain through the Amicable Agreement procedure.\n\nFollowing the review at year-end of the provision recorded for open litigation in Italy and the opinion received from the experts advising it on the matter, the Group has decided to maintain the provision in the amount of EUR 7,556 thousand, which is equivalent to the amount it calculates will be payable in Italy for the amicable agreements pending execution and open litigation relating to transfer pricing adjustments for transactions carried out with third countries in 2014, 2015, 2016 and 2017.\n\n{119}------------------------------------------------\n\nImage /page/119/Picture/1 description: The image shows the Acerinox logo. The logo consists of a white circle with a thick blue border. Inside the circle, the word \"ACERINOX\" is written in blue, bold, sans-serif font. The text is positioned in the upper-left quadrant of the circle.\n\n#### **Germany**\n\nOn 14 December 2020, the Group Company in Germany, Acerinox Deutschland, GmbH, was notified of the commencement of a tax audit relating to 2015 to 2018. For those years, the Group had a bilateral advance pricing agreement applicable to transactions between the Group's Spanish plants and Acerinox's subsidiary in Germany. On 12 January 2023, the inspector's report was received with a proposal to complete the audit without adjustments, pending the issuance of the final report.\n\nWith regard to the VDM companies in Germany, an audit procedure was initiated in June 2021 for the financial years 2016 to 2018. The procedures have not yet been completed and no report has been prepared to date from which the existence of corrections could be deduced.\n\nThe renewal of the previous bilateral valuation agreement between the Group's factories in Spain and the Group's distributor in Germany (Acerinox Deutschland GmbH) is still in progress. The application was submitted on 29 June 2021, on the same terms as the ones in force until 31 December 2021.\n\n#### **Spain**\n\nOn 21 December 2023, the companies Acerinox, S.A., Acerinox Europa S.A.U. and Roldan received notification of the commencement of partial verification and investigation proceedings limited to the verification of the request for rectification of corporate income tax for the year 2021 submitted by the Group, as well as the deductions for technological innovation (TI) expenses pending application, generated in the years 2017 to 2021.\n\nThe first meeting took place in February 2024.\n\n#### **Chile**\n\nIn December 2023, an inspection was initiated at the Group's subsidiary in Chile, in order to review the tax losses pending recovery accumulated since 2012. To date, the inspection is still ongoing and all the requested information has been provided.\n\n#### **Malaysia**\n\nIn February 2022, the Group's two entities in Malaysia were notified of the opening of a transfer pricing inspection procedure relating to the financial years 2015 to 2020.\n\nOn 2 December 2022, the inspection report was received, bringing the inspection proceedings to an end. In the case of Bahru Stainless, Sdn. Bhd, the inspection report includes an adjustment given that the interest accrued from 2019 on the loan granted by Acerinox, S.A. until its full capitalisation in 2021 is considered non-deductible, as it is considered to be a capital contribution from that date. This adjustment has no effect because there was a restriction on the deductibility of interest that prevented it from being deducted. In addition, the company has no recognised deferred tax assets.\n\nAs regards the entity Acerinox SC Malaysia Sdn. Bhd, the inspection has been completed in conformity and without any adjustment.\n\n#### **Other inspection activities**\n\nDuring the year, inspections were carried out at VDM Metals Japan K.K. and, for the years 2020 to 2022, at VDM Metals Korea Co. Ltd, relating to the year 2021. Both inspections have been completed without significant adjustments.\n\n#### **19.5.2. Years open for review**\n\nUnder current legislation, taxes cannot be deemed to have been definitively settled until the tax returns filed have been reviewed by the tax authorities or until the deadline for registration has expired.\n\n{120}------------------------------------------------\n\nImage /page/120/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif, bold letters. The word is positioned inside a blue circle that is open on the right side.\n\n#### **Spain**\n\nPursuant to the Spanish Corporate Income Tax Law, carry-forward tax losses declared in the tax returns for years open for review become statute-barred ten years from the day following the final day of the period established for filing the tax return or self-assessment for the tax period in which the right to offset arose. Once this period has elapsed, taxpayers must demonstrate that the carry-forward tax losses that they wish to offset, and the amount thereof, are appropriate by submitting the assessment or self-assessment and the accounting records, together with evidence that they were filed at the Companies Registry within the aforementioned period.\n\nAt 31 December 2023 and 2022, Acerinox, S.A. and the companies in the consolidated tax group had all the taxes applicable to them open for review in relation to the following years: Type of tax\n\n|                      | 2023      | 2022      |\n|----------------------|-----------|-----------|\n| Corporate income tax | 2017-2022 | 2017-2021 |\n| Value added tax      | 2020-2023 | 2019-2022 |\n| Customs duties       | 2020-2023 | 2019-2022 |\n| Personal income tax  | 2020-2023 | 2019-2022 |\n\n#### **Other countries**\n\nThe other Group entities have the taxes for the years established by their respective local jurisdictions open for review. The Directors of the parent and of its subsidiaries do not expect that any significant additional liabilities will arise in the event of a tax audit.\n\n#### <span id=\"page-120-0\"></span>**NOTE 20 – RELATED PARTY BALANCES AND TRANSACTIONS**\n\n#### **20.1 Related parties**\n\nThe consolidated financial statements include transactions performed with the following related parties:\n\n- Key executives of the Group and members of the Boards of Directors of the various Group companies; and\n- Significant shareholders of the parent.\n\nTransactions performed between the Company and its subsidiaries, which are related parties, are carried out, from the standpoint of their subject-matter or terms and conditions, in the ordinary course of the Company's business activities and have been eliminated on consolidation. Therefore, they are not disclosed in this Note.\n\n#### **20.2 Related party transactions and balances**\n\nThe only transactions carried out with related parties relate to the Directors and key management personnel in payment for the functions performed, all of which are carried out on an arm's length basis.\n\n#### **a) Directors and key management personnel**\n\nThe remuneration received during the year by the twenty-four members of the Management Committee and who do not hold a position on the Board of Directors of Acerinox, S.A. amounts to EUR 12,044 thousand. Of this amount, EUR 5,308 thousand are salaries, EUR 5,081 thousand are variable remuneration corresponding to the previous year's results and EUR 1,655 thousand are benefits in kind, partly derived from the shares they received for completing the third cycle of the multiyear remuneration plan, as explained below. They did not receive any per diems during this financial year.\n\nIn December 2023, at the proposal of the Appointments and Remuneration Committee, a Management Committee was created that included not only those who report directly to the Chief Executive Officer but also those who, without this direct reporting line, perform a corporate function in the company's Central Services and whose remuneration includes a specific retention system.\n\nIn 2022, the nine senior executives received EUR 8,124 thousand, of which EUR 3,061 thousand related to salaries, EUR 4,082 thousand to variable remuneration based on the previous year's results and EUR 981 thousand to remuneration in kind. No per diems were received.\n\n{121}------------------------------------------------\n\nImage /page/121/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle. The text is in a sans-serif font and is positioned in the upper-left quadrant of the circle.\n\nIn 2023, the members of the Board of Directors of Acerinox, S.A., including those who also hold senior executive positions and sit on the Boards of Directors of other Group companies, earned EUR 4,129 thousand in fixed allowances, attendance fees, and fixed and variable salaries (based on the previous year's results), of which EUR 1,490 thousand related to salaries and fixed allowances for Directors, EUR 679 thousand to attendance fees, EUR 1,500 thousand to variable remuneration based on the previous year's results and EUR 460 thousand to remuneration in kind. In 2022, the remuneration received amounted to EUR 4,250 thousand, of which EUR 1,443 thousand related to salaries and fixed allowances of Directors, EUR 726 thousand to attendance fees, EUR 1,500 thousand to variable remuneration based on the previous year's results and EUR 581 thousand to remuneration in kind.\n\nWith regard to the breakdown of the Chief Executive Officer's variable remuneration, the annual bonus for 2022 has been settled in this year. The metrics used for their calculation combined financial, environmental and other business aspects specified in the Annual Report on Directors' Remuneration (IARC) for the year.\n\nThe Appointments, Remuneration and Corporate Governance Committee considered the different levels of compliance and submitted its proposal to the Company's Board of Directors, which generated a combined achievement coefficient that resulted in a preliminary bonus of EUR 740 thousand and a bonus pool (a percentage to be distributed of 0.616% of EBITDA, shared with the rest of the senior executives) of an additional EUR 962 thousand. As the maximum remuneration for this item is capped, the total bonus received amounted to EUR 1,500 thousand. This amount was paid during the month of March.\n\nAs regards the long-term incentive, due to the application of the metrics of comparable companies in the terms described in the Annual Report on Directors' Remuneration, the Chief Executive Officer was awarded 23,498 Acerinox, S.A. shares, after deducting the amount corresponding to personal income tax.\n\nIn relation to the multi-year remuneration or long-term incentive (LTI) plan, the terms and conditions of which are detailed in **Note 16.1.2**, the expense incurred in the year in relation to the Chief Executive Officer and senior executives, the balancing entry of which is recognised under \"other equity instruments\", amounts to EUR 1,429 thousand, of which EUR 233 thousand relate to the Chief Executive Officer (2022: EUR 1,146 thousand, accrued by senior executives, of which EUR 286 thousand relate to the Chief Executive Officer). During the year, the shares corresponding to the third cycle of the first approved sharebased remuneration plan were delivered. A total of 110,563 shares were delivered (109,378 shares corresponding to the second cycle were delivered in 2022), after deducting applicable withholdings, of which 23,498 corresponded to the Chief Executive Officer (2022: 34,537). The difference between the amount recorded as other equity instruments corresponding to that cycle and the amount of shares finally delivered, amounting to EUR -769 thousand, has been recorded against equity under the \"reserves\" caption (2022: EUR -810 thousand).\n\nThere are obligations arising from certain senior executive retirement benefit arrangements amounting to EUR 18.8 million (2022: EUR 17.9 million), of which EUR 5.5 million correspond to the Chief Executive Officer (2022: EUR 5.3 million). Since these obligations were duly insured in both 2023 and 2022, and their estimated amount was covered by cash flows arising from the insurance policies taken out for this purpose, no liabilities were recognised in this connection. In 2023, the amount of EUR 458 thousand has been contributed to the insurance company (2022: EUR 1,512 thousand). There are no obligations contracted with proprietary or independent directors of Acerinox, S.A. At 31 December 2023 there are no advances or loans granted to or balances with members of the Board of Directors or senior executives.\n\nThe Company's Directors and their related parties were not involved in any conflict of interest that had to be reported pursuant to Article 229 of the Consolidated Spanish Limited Liability Companies Law.\n\nThe Group has taken out a third-party liability insurance policy which covers the directors and senior executives, as well as Group employees. The premium paid in 2023 amounted to EUR 754 thousand (2022: EUR 718 thousand).\n\nIn 2023 and 2022, the members of the Board of Directors did not perform any transactions with the Company or with Group companies that were outside the normal course of business or were not on an arm's length basis.\n\n#### **b) Significant shareholders**\n\nThe Acerinox Group has not entered into any related party transactions with any significant shareholders in 2023 or 2022.\n\n#### <span id=\"page-121-0\"></span>**NOTE 21 – AUDIT FEES**\n\nThe shareholders at the Annual General Meeting held on 23 May 2023 resolved to reappoint the auditors \"PricewaterhouseCoopers Auditores, S.L.\" to perform the review and statutory audit of the financial statements of ACERINOX, S.A. and its Consolidated Group for 2023.\n\nThe detail of the fees and expenses incurred for services rendered by the audit firms that audited the Acerinox Group's financial statements in 2023 and 2022, respectively, and their associate firms, is as follows:\n\n{122}------------------------------------------------\n\nImage /page/122/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a gap at the bottom right. The word \"ACERINOX\" is in black.\n\n#### (Amounts in thousands of euros)\n\n|                                 | 2023                      |                      |       | 2022                      |                      |       |\n|---------------------------------|---------------------------|----------------------|-------|---------------------------|----------------------|-------|\n|                                 | PWC<br>Auditores,<br>S.L. | PWC<br>International | TOTAL | PWC<br>Auditores,<br>S.L. | PWC<br>International | TOTAL |\n| For audit services              | 408                       | 1,150                | 1,558 | 371                       | 1,049                | 1,420 |\n| For tax advisory services       |                           | 9                    | 9     |                           | 7                    | 7     |\n| For other verification services | 128                       | 18                   | 146   | 70                        | 21                   | 91    |\n| For other services              |                           |                      |       |                           |                      | 0     |\n| TOTAL                           | 536                       | 1,177                | 1,713 | 441                       | 1,077                | 1,518 |\n\n\"Other audit-related services\" includes the limited review of the interim condensed consolidated financial statements as at 30 June 2023 and 2022, the report on agreed-upon procedures regarding the system of Internal Control over Financial Reporting (ICFR) and the report on agreed-upon procedures relating to the achievement of the financial ratios required by the Borrowing Base Facility of Columbus Stainless and the ICO in Spain, and other agreed-upon procedures performed in accordance with ISRS 4400 in Malaysia. For the first time, this year the independent review of the non-financial information contained in the Consolidated Statement of Non-Financial Information in the Consolidated Group's 2023 Directors' Report is included in other audit-related services.\n\nThe amounts detailed in the foregoing table include the total fees for services rendered in 2023 and 2022, irrespective of when they were billed.\n\nOther audit firms billed the Group in 2023 for fees and expenses for audit services amounting to EUR 222 thousand (2022: EUR 151 thousand).\n\n#### <span id=\"page-122-0\"></span>**NOTE 22 – EVENTS AFTER THE REPORTING PERIOD**\n\n**Acerinox, S.A. closes an agreement for the acquisition of the US company Haynes International**\n\nThe Boards of Directors of Acerinox, S.A. and Haynes International have agreed to the acquisition by the Acerinox Group of 100% of Haynes International (Haynes), a US-listed company based in Indiana (United States) specialising in the specialty alloys sector.\n\nThe Haynes Board of Directors will submit to its shareholders the sale of 100% of its shares. If the sale agreement is accepted by a majority of Haynes shareholders, it will be binding on all of them and they will receive the agreed amount (USD 61 per share) in cash, for a total consideration of USD 798 million, corresponding to an enterprise value of USD 970 million.\n\nHaynes will become wholly owned by North American Stainless (NAS), which in turn is wholly owned by Acerinox, S.A.\n\nThe agreement will be subject to prior clearance by the US competition authorities and the US Foreign Investment Committee.\n\nThe closing of the transaction, and thus the takeover of the Haynes Group, is subject to the approval of Haynes' own Annual General Meeting and the aforementioned competition authorities. Depending on the date of obtaining approval, it is estimated that the transaction could go through by mid-2024.\n\nWith this deal, Acerinox will strengthen its position in the North American market, where it is currently the leader in the stainless-steel segment, and further solidify its dominant position in the global high-performance alloy markets.\n\n#### **Interim dividend**\n\nThe Board of Directors of Acerinox, S.A. held on 20 December 2023 has decided to propose to the Ordinary Annual General Meeting of Shareholders of the Company a dividend of EUR 0.62 per share charged to 2023 results, of which EUR 0.31 were paid as an interim dividend on 27 January 2024. This dividend will be submitted for approval at the Annual General Meeting to be held in 2024.\n\n{123}------------------------------------------------\n\nImage /page/123/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a semi-circular fashion. The text is a dark blue color. The text is enclosed within a circular border, also in dark blue. The background is white.\n\n#### **Acerinox Europa, S.A.U. agreement**\n\nAcerinox Europa began the process of renewing the IV Collective Bargaining Agreement in January 2023. The company is dedicated to implementing a new model at this plant to address its financial losses and effectively compete in the market. This transformation involves regaining productivity through greater flexibility and versatility of its workforce.\n\nIn this context, after months of negotiations, a strike began at the Campo de Gibraltar plant on 5 February. At the time of publication of these results, the strike persists despite the Company's stated willingness to negotiate.\n\n{124}------------------------------------------------\n\nImage /page/124/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, centered within a white circle. A blue crescent shape partially surrounds the top and right side of the circle, creating a frame-like effect.\n\nFree translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.\n\n{125}------------------------------------------------\n\n2023 Integrated Annual Report\n\nNon-financial information statement (NFIS)\n\n| Letter from the Chief<br>Executive Officer         | 2  |\n|----------------------------------------------------|----|\n| 1. Business model                                  | 4  |\n| 1.1 Value creation                                 | 9  |\n| 1.2 About the Group                                | 10 |\n| 1.3 Parent                                         | 14 |\n| 1.4 Production<br>companies                        | 14 |\n| 1.5 Sales subsidiaries                             | 16 |\n| 1.6 Relevant events                                | 17 |\n| 2. Strategy                                        | 19 |\n| 2.1 Global context                                 | 19 |\n| 2.2 Strategic plan                                 | 24 |\n| 2.3 Risk management                                | 28 |\n| 3. Governance                                      | 32 |\n| 3.1 Board of directors                             | 32 |\n| 3.2 Annual shareholders'<br>meeting                | 37 |\n| 4. Economic<br>performance                         | 38 |\n| 4.1 Production                                     | 38 |\n| 4.2 Financial results                              | 40 |\n| 4.3 Excellence 360° plan                           | 50 |\n| 4.4 Acerinox shares                                | 51 |\n| 4.5 Shareholder<br>remuneration                    | 55 |\n| 4.6 European taxonomy<br>on sustainable<br>finance | 56 |\n\n| 5.1 Ethical, responsible,<br>and transparent<br>corporate governance | 70 |\n|----------------------------------------------------------------------|----|\n|----------------------------------------------------------------------|----|\n\n- \n- \n- \n- \n\n- \n- \n- -\n\t-\n\t-\n\t-\n\nImage /page/125/Picture/19 description: The image is an abstract composition in shades of gray, featuring a series of curved and straight lines that create a sense of depth and movement. The lines vary in thickness and intensity, with some appearing sharp and defined, while others are blurred and diffused. The overall effect is one of fluidity and dynamism, with the lines seeming to flow and intersect in a complex and intricate pattern.\n\n{126}------------------------------------------------\n\nImage /page/126/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, blue letters. The text is positioned inside of a blue circle that is open on the left side.\n\n## **Letter from the Chief Executive Officer**\n\n**GRI 2-22**\n\nImage /page/126/Picture/4 description: A man in a suit and tie is shown in a portrait. He has short, dark hair and a light complexion. He is wearing a blue suit with a light blue tie. The background is a blurred green.\n\n**Mr. Bernardo Velázquez**\n\nChief Executive Officer Acerinox\n\nIt is an honor to speak to you all today to lay out the strategic importance of sustainable development - one of the essential pillars that serves as a backbone for our work and our strategy's principles. We efficiently manufacture high-performance stainless steels and alloys in a respectful, committed way. We are committed to a responsible management model that helps protect the planet, reduce inequality, and promote a more prosperous, sustainable world.\n\nWe're well aware that the worldwide nature of our business exposes us to new risks and geopolitical tensions. Russia's invasion of Ukraine, conflict in the Middle East, and the growing tension between China and Taiwan threaten to block the way of economic development and further strain supply chains. By the end of 2023, events in the Red Sea - with constant attacks on cargo ships - disrupted maritime trade and diverted Suez Canal cargo flows to longer, more costly alternative routes. Our Group undoubtedly faces numerous challenges and complex risks in an increasingly changing, unstable world.\n\nIn this complex, adverse context, we have been able to maintain our commitment to operational excellence and sustainable efficiency, standing out as a leader and driver in circular economy, once again demonstrating our ability to adapt to changing circumstances.\n\nAs a global supplier of stainless steel and high-performance alloys, we are committed to best practices in governance and sustainability in order to contribute to economic and social development. We are firmly committed to helping achieve the Sustainable Development Goals (SDGs) approved by the United Nations, with recycled materials, manufacturing products that are wholly and indefinitely recyclable while also promoting innovation, education, equality policies, and climate change mitigation. To this end, we have a responsible management model that structures, coordinates, and strengthens our goals while ensuring the sustainability of the business.\n\nOur sustainability plan, 360º Positive Impact, is based on a materiality and ESG risk analysis; it identifies levers for value generation and establishes long-term targets alongside the Group's main environmental, social, and corporate governance initiatives. This multi-year program is structured around five strategic pillars: ethical, responsible, and transparent governance; eco-efficiency and climate change mitigation; circular economy and sustainable products; a committed team, culture, diversity, and safety; and lastly supply chain and societal impact.\n\nThe Group has also established a set of targets for 2030 which include ambitious goals such as a 20% reduction in direct and indirect carbon emissions intensity (Scope 1 and 2) using the 2015 baseline. We have managed to reduce them by 11% already. Responsible energy consumption is another essential characteristic of our company's work. In this regard, the stainless steel division has committed to reducing its energy intensity by 7.5% compared to 2015. However, we weren't able to improve in this area this year; it was affected by the drop in production, which had a significant impact on factory efficiency.\n\nThe 20% reduction target for water intake intensity is also progressing steadily (18% versus 2015). Another of our Group's essential goals is to recycle 90% of our waste. Stainless steel is a sustainable material by definition; thanks to our ongoing investments and efforts, our waste reuse figure has now reached 80%. All these carbon intensity, energy intensity, water withdrawal, and percentage of waste recycled targets were set for the stainless steel division only. However, in 2024, this will be extended to the entire Group.\n\nI would also like to lay out the progress we have made on our other priorities and best practices, such as our commitment to avoid any kind of accidents, far exceeding the 2023 target, as detailed in the report and thanks to everyone's hard work. The Group has a presence in all five continents, where most races and religions are represented. As part of our growing commitment to diversity, we also set ourselves the target of increasing the percentage of women in the workforce to 15% (currently 13.3%, well above the 9.1% of the Spanish steel industry).\n\n{127}------------------------------------------------\n\nImage /page/127/Picture/1 description: The image shows the logo for Acerinox. The logo consists of a blue circle with the word \"ACERINOX\" written in blue inside the circle. The circle is not complete, with the right side of the circle being open.\n\n## **A leader in circular economy**\n\nTo achieve all these targets and manufacture increasingly sustainable products and solutions, we believe that the R&D&I strategy must go hand-in-hand with environmental challenges. For this reason, we're committed to managing our production processes in an eco-efficient way, from the source to the end of the product's life cycle. In addition to legal obligations, Acerinox factories also have procedures in place to control environmental risks, as well as their corresponding likelihood and severity evaluations. All Group facilities also have an environmental management system in accordance with the ISO 14001 standard.\n\nIn short, our ESG model is a future international benchmark. This year, our commitment to sustainability has once again earned us top-level international recognition that validates and supports our aim: to create the most efficient materials for the future, generating a positive environmental impact. For the second consecutive year, Acerinox was awarded the Platinum Medal by EcoVadis in 2023, the highest rating in corporate sustainability. This rating evaluates corporate social responsibility in global supply chains.\n\nThis year, Acerinox obtained an overall score of 82 points; placing us in the 99th percentile, at the top of the sector, as well as exceeding the score received last year (79 points). The assessment includes 21 sustainability criteria divided into four key areas: environment, labor and human rights, ethics and sustainable procurement.\n\nIn 2023, we also joined the Together for SDGs initiative, flying the colors of the United Nations Sustainable Development Goals (SDGs). Looking ahead to 2024, we've identified projects in key business areas to improve quality and performance in the production of high-value-added steels, optimize internal scrap and raw material management, and introduce further sustainability improvements to make consumable use more efficient and further reduce CO2 emissions.\n\nWe are proud that this strong commitment, which underpins our circular-economy-based business model, is supported by the ongoing efforts of the thousands of people who make up our Group. Sustainability is our driving force, which in turn brings together and unites the other pillars. We are looking for a model based on value generation for our stakeholders, carrying forward the legacy for future generations. You can find a full accounting of all our progress and contributions to sustainability in the various chapters of this report, which I now invite you to read.\n\nImage /page/127/Picture/8 description: The image shows a close-up of a metal turbine rotor. The rotor is silver and has many curved blades. The background is blurred and blue.\n\n{128}------------------------------------------------\n\n## **1. Business model**\n\n**Business model and value creation**\n\n**13 Factories** \n\n**20**\n\n**Service centers**\n\n**26 Warehouses**\n\n**57**\n\n**Sales offices** \n\n## **22**\n\n**Commercial agents**\n\n## **61**\n\n**Countries in which the sales network operates**\n\n## **Global presence**\n\n**5** Continents Sales in **79** countries\n\n**8,229** employees\n\n## **Customers**\n\n**11,864**\n\nAcerinox's factories have **more than 120** quality certifications\n\nImage /page/128/Picture/19 description: The image shows a close-up of a building's facade with a unique architectural design. The facade is covered in a pattern of triangular, cone-shaped structures that are arranged in rows and columns. These structures appear to be made of a light-colored material, possibly metal or concrete, and they create a textured, geometric surface. The background reveals a blue sky, suggesting that the building is located outdoors. The overall impression is one of modern, innovative architecture with a focus on geometric patterns and visual texture.\n\n**4**\n\n{129}------------------------------------------------\n\nImage /page/129/Picture/1 description: The image shows a logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The text is positioned to the left of a blue circle. The circle partially obscures the left side of the text, creating a sense of depth. The overall design is simple and corporate.\n\n## **Board of directors**\n\nImage /page/129/Figure/3 description: The image contains two donut charts. The first donut chart shows the distribution of categories: Independent (63.6%), Proprietary (27.3%), and Executive (9.1%). The second donut chart shows the percentage of women (36.4%).\n\n**63.6%**\n\nIndependent directors\n\n**34**\n\nboard committee meetings\n\n**14** \n\nmeetings held by the board of directors\n\nEconomic performance\n\n**6,608 EUR million** revenue\n\n**228 EUR million** net income\n\n**703 EUR million** EBITDA\n\n**341 EUR million**  net financial debt\n\n**481 EUR million**  operating cash flow Our shares\n\n**249,335,371 shares**\n\n**150 EUR million**  dividend\n\n**2,657**\n\n**EUR million**  Market capitalization\n\n## **EUR 10.66/share**\n\nshare price at year-end\n\n**EUR 62,333,842.75**\n\nshare capital\n\n{130}------------------------------------------------\n\n## **Production volume**\n\n**1,869,417**  metric tons of stainless steel\n\n**76,288**  metric tons of high-performance alloys\n\n## **More than 18,000 combinations**\n\nThe widest range of products and solutions\n\n## **Products for all areas**\n\n- Transport\n- Industrial and engineering equipment\n- ABC and infrastructure\n- Food sector\n- Electrical appliances and hardware\n- Energy and environmental technology\n- Aeroespace\n\n## **Purchases from suppliers**\n\n**4,967 EUR million**\n\n## **79% of suppliers are local**\n\n(from the same country as the production center) We promote the development of local communities in which the Group operates\n\n## **Digitalization and innovation**\n\n## **EUR 17.6 million**\n\n**digitalization and innovation investments and expenses**\n\n### **Main R&D&i lines**\n\n- Research to improve quality\n- Technological development\n- Development of new types of steel and finishes\n- Investments to optimize the circular economy\n- Production line improvements\n- Digitalization, automation and control of the production process\n- Investment in climate change mitigation\n\n### **'Excellence 360º' strategic plan Comprehensive view of the business**\n\n- **Raw material purchases:** optimize the mix. Predictability of consumption, raw materials and consumables.\n- **Production:** increase reliability and competitiveness.\n- **Supply chain:** optimize inventories and delivery processes.\n- **Sales:** focused on providing added value and improving margins. Demand planning.\n\n{131}------------------------------------------------\n\nImage /page/131/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in white text inside a blue circle. The circle is not fully closed, with a gap at the top right.\n\n## **Commitment to sustainability**\n\n#### **Contribution of sustainability to the business strategy**\n\nThe Sustainability Plan, Positive Impact 360º, responds to one of the main areas of Acerinox's strategy, which identifies sustainability as one of its fundamental lines of action and includes five pillars.\n\nImage /page/131/Figure/5 description: The image shows five categories with titles and icons. The first category is \"Ethical, accountable, and transparent governance\" and has an icon of an open book. The second category is \"Eco-efficiency and climate change mitigation\" and has an icon of a tree and a winding road. The third category is \"Circular economy and sustainable products\" and has an icon of a globe. The fourth category is \"Committed team, culture, diversity, and safety\" and has an icon of a group of people. The fifth category is \"Supply chain and community impact\" and has an icon of a factory.\n\n**Positive Impact 360º** responds to the ESG risk and materiality analysis carried out based on the Group's strategy. It identifies the levers of value generation and establishes long-term objectives to make these levers a reality. Acerinox has established **six sustainability objectives** with a view to 2030 associated with the pillars of the Positive Impact 360º Plan.\n\n| Pillar        | 2030 targets**                                                                 | Degree of progress | 2023 vs 2022 |\n|---------------|--------------------------------------------------------------------------------|--------------------|--------------|\n| Image: Tree   | 20% reduction in CO2 emissions intensity<br>(Scopes 1 and 2) compared to 2015. | -11% vs 2015       | -3%          |\n| Image: Tree   | 7.5% reduction in energy intensity<br>compared to 2015                         | 8% vs 2015         | 6%           |\n| Image: Tree   | 20% reduction in water withdrawal<br>intensity compared to 2015                | -18% vs 2015       | -3%          |\n| Image: Globe  | 90% waste recycled                                                             | 80%                | 1%           |\n| Image: People | 10% annual reduction in LTIFR                                                  | –                  | -24%         |\n| Image: People | 15% women at the organization                                                  | 13.28%             | 0.37%*       |\n\n\\*Increase in the percentage of women on staff compared to the previous year.\n\n\\*\\*Carbon intensity, energy intensity, water withdrawal intensity and % waste recycled targets were set for the stainless steel division only. In 2024, they will be extended to the Group level.\n\nThe Group seeks to reduce, reuse, and recycle as many of the resources used as possible to establish a more sustainable production model.\n\n{132}------------------------------------------------\n\nImage /page/132/Picture/1 description: The image shows a logo with the word \"ACERINOX\" in a bold, sans-serif font. The text is positioned to the left of a blue, circular graphic. The graphic appears to be a stylized representation of a globe or a similar spherical shape, with curved lines suggesting depth and dimension. The overall design is clean and corporate, likely representing a company or organization named Acerinox.\n\n### **Committed to the United Nations 2030 Agenda**\n\nThe Group identified the Sustainable Development Goals to which it can make the biggest contribution.\n\nImage /page/132/Picture/4 description: The image shows a collection of logos representing the United Nations Sustainable Development Goals (SDGs). From left to right, top row: SDG 3 (Good Health and Well-being) with a heart rate graphic, SDG 5 (Gender Equality) with a gender symbol, SDG 6 (Clean Water and Sanitation) with a water droplet graphic, and SDG 8 (Decent Work and Economic Growth) with an upward trending graph. Bottom row: SDG 9 (Industry, Innovation and Infrastructure) with a cube structure, SDG 12 (Responsible Consumption and Production) with an infinity symbol, and SDG 13 (Climate Action) with an eye graphic containing a world map.\n\n### **Recognitions**\n\nAcerinox received, for the second consecutive year, the EcoVadis Platinum Medal for its performance in sustainability and two gold awards, one in sustainability and one in safety, at the Annual Stainless Steel Industry Awards.\n\nImage /page/132/Picture/7 description: The image shows the EcoVadis Platinum 2023 sustainability rating logo next to the word \"worldstainless\". The EcoVadis logo is a circular badge with the words \"PLATINUM\" and \"Top 1%\" on a banner at the top. The words \"2023\" and \"ecovadis\" are in the center of the badge, and the words \"Sustainability Rating\" are at the bottom. The word \"worldstainless\" is in blue and is reflected below.\n\nImage /page/132/Picture/8 description: The image shows a low-angle view of a bridge tower and its support cables against a clear blue sky. The tower is a tall, rectangular structure with a dark gray or black color, and it appears to be made of concrete or stone. The cables are arranged in a fan-like pattern, extending from the top of the tower down to the bridge deck. The cables are thin and metallic, and they appear to be made of steel or iron. The sky is a clear blue color, with no clouds or other obstructions. The image is well-lit and the colors are vibrant.\n\n{133}------------------------------------------------\n\n## **1.1 Value creation**\n\nImage /page/133/Figure/3 description: The image is an infographic that illustrates the financial impact and operations of a company within a community. It features various statistics and figures related to the company's activities. The infographic includes the following data points: 1.9 million tons of stainless steel, 76 thousand tons of high-performance alloys steel, EUR 637 million in salaries for 8,229 employees, EUR 540 thousand in social action, EUR 17.6 million in R+D+i, 11,864 customers to whom the company sells, EUR 175 million in investment in fixed assets, EUR 150 million in dividends, EUR 233 million in taxes, EUR 6,608 million in customer sales, and EUR 4,967 million of spending in suppliers, with 79% being local suppliers. The infographic uses a stylized map layout with illustrations of buildings, roads, and natural elements to represent the company's presence and impact on the community.\n\n{134}------------------------------------------------\n\nImage /page/134/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, with the letters stacked vertically. The word is surrounded by a blue circle that is open on the right side.\n\n## **1.2 About the Group**\n\n#### **GRI 2-1 / 2-2**\n\nThe Acerinox Group is the world's most global manufacturer and distributor of stainless steel and high-performance alloys; present on all five continents, it is a market leader in the US and Africa, as well as one of the industry's bestpositioned companies in Europe. The Group has an international sales network made up of 20 service centers, 26 warehouses, 57 offices and 22 sales representatives, thanks to which Acerinox distributes in 79 countries.\n\nAcerinox's stainless steel factories are located in Campo de Gibraltar, Ponferrada and Igualada (Spain), Ghent (Kentucky, US), Middelburg (Mpumalanga, South Africa) and Johor Bahru (Malaysia). The Group also has high-performance alloys plants, which are located in Unna, Duisburg, Siegen, Werdohl and Altena (Germany), and in New Jersey and Nevada (US).\n\nAcerinox's mission, vision and values guide the entire company towards its purpose: creating the most efficient materials for the future, maximizing societal benefit and creating value for its stakeholders. In its wide range of solutions, Acerinox Group, a leader in circular economy, offers more than 18,000 possible combinations. These are used in industries such as transportation, construction, energy and environmental technology, and food service, thanks to their corrosion resistance, durability, versatility, mechanical properties, aesthetic beauty, and low maintenance requirements.\n\n## At December 31, 2023, **the majority shareholder of Acerinox was Corporación Financiera Alba (19%)**\n\n| 20 | 26 | 57 | 22 | 61 |\n|----|----|----|----|----|\n|----|----|----|----|----|\n\n**Service centers**\n\n**Warehouses Sales offices Commercial** \n\n**agents**\n\n**Countries in which the sales network operates**\n\nImage /page/134/Picture/13 description: The image shows a close-up of a modern building's facade, featuring a pattern of angled glass panels and white vertical supports. The glass reflects the sky, creating a blue tint throughout the image. The composition is dynamic, with the angled lines converging towards the top of the frame. The lighting is bright and even, highlighting the clean lines and geometric shapes of the architecture.\n\n{135}------------------------------------------------\n\n## **Key indicators**\n\n### **Performance in figures**\n\nImage /page/135/Figure/3 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 2,619. The value for 2022 is 2,190. The value for 2023 is 1,946.\n\nImage /page/135/Figure/5 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 6,706. The value for 2022 is 8,688. The value for 2023 is 6,608.\n\nImage /page/135/Figure/6 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 989, the value for 2022 is 1,276, and the value for 2023 is 703.\n\nImage /page/135/Figure/7 description: The image is a bar chart showing the EBIT (TTC) for the years 2021, 2022, and 2023. The EBIT for 2021 is 810, for 2022 is 876, and for 2023 is 374.\n\nImage /page/135/Picture/8 description: The image shows a low-angle view of three modern skyscrapers against a clear, light blue sky. The buildings are primarily constructed of glass and steel, reflecting the sky and surrounding environment. The skyscraper on the left has a blue tint, while the other two have a more neutral, reflective appearance. The architecture is characterized by clean lines and a grid-like pattern of windows. The composition emphasizes the height and scale of the buildings, creating a sense of urban grandeur.\n\nEBITDA (M€)\n\n{136}------------------------------------------------\n\nImage /page/136/Figure/1 description: The image is a bar chart showing the profit before tax (FTE) for the years 2021, 2022, and 2023. The profit for 2021 is 766, for 2022 is 831, and for 2023 is 355.\n\nImage /page/136/Figure/3 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 572, for 2022 is 556, and for 2023 is 228.\n\nImage /page/136/Figure/5 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 179, the value for 2022 is 193, and the value for 2023 is 171.\n\nImage /page/136/Figure/7 description: The image is a bar graph showing data for the years 2021, 2022, and 2023. The bar for 2021 has a value of 101, the bar for 2022 has a value of 154, and the bar for 2023 has a value of 175.\n\nImage /page/136/Figure/8 description: The image shows the text \"ROE (%)\" in a purple sans-serif font. \"ROE\" is in a larger font size than \"(%) which is directly to the right of \"ROE\".\n\nImage /page/136/Figure/9 description: The image is a bar graph showing the percentages for the years 2021, 2022, and 2023. The percentage for 2021 is 25.8%, for 2022 is 21.8%, and for 2023 is 9.3%.\n\nImage /page/136/Figure/10 description: The image shows the text \"ROCE (%)\" in a purple sans-serif font. \n\nImage /page/136/Figure/11 description: The image is a bar graph showing data for the years 2021, 2022, and 2023. The value for 2021 is 29.0%, for 2022 is 29.3%, and for 2023 is 13.3%.\n\nImage /page/136/Figure/13 description: The image is a bar graph comparing values for the years 2021, 2022, and 2023. The value for 2021 is 8.19, the value for 2022 is 9.81, and the value for 2023 is 9.88.\n\nImage /page/136/Figure/14 description: The image shows the text \"Shareholder remuneration per share (€)\".\n\nImage /page/136/Figure/15 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 0.50, the value for 2022 is 1.28, and the value for 2023 is 0.60. There is an asterisk next to the 2022 value.\n\n\\*Includes the ordinary dividend of EUR 0.50/share and the indirect remuneration derived from the share buyback program\n\n{137}------------------------------------------------\n\nImage /page/137/Picture/0 description: The image shows a modern architectural design with a curved structure against a clear blue sky. The structure appears to be part of a building, possibly a skyscraper, with a unique design featuring layers of curved glass and metal. The glass reflects the sky, creating a sense of openness and light. The overall impression is one of contemporary design and innovative construction.\n\nImage /page/137/Figure/3 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 2.11, the value for 2022 is 2.14, and the value for 2023 is 0.91.\n\n\\*Calculated based on the number of outstanding shares at yearend\n\nNet financial debt (M€)\n\nImage /page/137/Figure/6 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 578, the value for 2022 is 440, and the value for 2023 is 341.\n\nImage /page/137/Figure/8 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 11.385, the value for 2022 is 9.240, and the value for 2023 is 10.665.\n\nImage /page/137/Figure/10 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 0.58, the value for 2022 is 0.35, and the value for 2023 is 0.49.\n\n{138}------------------------------------------------\n\n## **1.3 Parent**\n\n## Acerinox S.A.\n\nAcerinox S.A. is the Group's holding company, which establishes and monitors the strategic lines of business. It also provides corporate services such as legal, accounting and consulting, and is responsible for the management and administration of Group financing.\n\nThe head office, with 114 employees, is located in Madrid, and is where the main decision-making and management bodies convene.\n\nAcerinox's shares are listed on the continuous market and the company is part of the selective Spanish IBEX 35. Approximately 45,000 shareholders, including individuals and legal entities, own stock in the company.\n\nAt December 31, 2023, Acerinox's share capital consisted of 249,335,371 ordinary shares with a nominal value of EUR 0.25 each.\n\n**STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\n## **1.4 Production companies**\n\n## **\\_1970**\n\n## Acerinox Europa\n\nCampo de Gibraltar (Spain)\n\n1,746 employees.\n\nFully integrated flat product factory. Its melting shop production totaled **550,162**  metric tons.\n\nMore information at: https://www.acerinox.com/es/grupo-acerinox/fabricas/acerinoxeuropa/inicio-acerinox-europa/\n\n## **\\_1990**\n\n## North American Stainless\n\nKentucky (US).\n\n1,606 employees.\n\nFully integrated flat- and long-product factory. Its melting shop production totaled **841,821** metric tons.\n\nMore information at: https://www.northamericanstainless.com/\n\n## **\\_2002**\n\n## Columbus Stainless\n\nMiddelburg (South Africa).\n\n1,248 employees.\n\nFully integrated flat product factory.\n\nIts melting shop production totaled **477,434** metric tons.\n\nMore information at: https://www.columbus.co.za/\n\nImage /page/138/Picture/27 description: The image shows a worm's eye view of several skyscrapers against a blue sky with white clouds. The buildings are made of glass and steel, and they reflect the sky and clouds. The buildings are of different heights and shapes, and they are arranged in a way that creates a sense of depth and perspective.\n\nACERINOX\n\n{139}------------------------------------------------\n\n## **\\_2009**\n\n## Bahru Stainless\n\nJohor Bahru (Malaysia).\n\n427 employees.\n\nBahru has cold rolling lines, which processed **77,181** metric tons. More information at: https://bahrustainless.com/en/\n\n## 1957\n\n## Roldán S.A\n\n#### **STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\nPonferrada (Spain).\n\n361 employees\n\n**44,479** metric tons of hot-rolled products.\n\nIts product portfolio includes bars, wire rods, angles, hexagonal bars and reinforcement bars, all of them flat products.\n\nMore information at: https://www.acerinox.com/es/grupoacerinox/fabricas/roldan/inicio-roldan/\n\n## \\_1989\n\n## Inoxfil S.A\n\nIgualada (Spain).\n\n96 employees.\n\n**5,502** metric tons produced.\n\nManufactures stainless steel wire.\n\nMore information at: https://www.acerinox.com/es/grupoacerinox/fabricas/inoxfil/inicio-inoxfil/index.html\n\n## **\\_2020**\n\n#### **HIGH-PERFORMANCE ALLOYS**\n\nVDM Metals\n\nUnna, Duisburg, Siegen, Altena & Werdohl (Germany).\n\nNew Jersey & Nevada (US).\n\n2,047 employees.\n\n**76,288** metric tons produced.\n\nGlobal leader in the production of nickel alloys and high-performance alloys, with five factories located in Germany and two in the US.\n\nMore information on VDM Metals at: https://www.vdm-metals.com/\n\n## **Eco-efficient products**\n\nOur products contribute to:\n\n- Circular economy. Circular economy.\n- Offering durable materials.reduce emissions. Offering durable materials.\n\t- 100% recyclable alternatives.\n\t- Systems to reduce emissions.\n\t- Improving quality of life with a lower environmental impact.\n\nImage /page/139/Picture/37 description: The image shows a steel frame structure under a blue sky with some clouds. The steel beams are arranged in a grid pattern, with vertical supports holding them up. The structure appears to be in the process of being built.\n\n{140}------------------------------------------------\n\nImage /page/140/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters. The letters are partially obscured by a blue circle that surrounds the text. The circle is thicker at the top and thinner at the bottom.\n\n## **1.5 Sales subsidiaries**\n\n• Improving quality of life with a lower environmental impact.\n\nImage /page/140/Figure/3 description: The image shows a bar chart and a world map. The bar chart shows the number of factories, service centers, warehouses, sales offices, and agents for the stainless steel division and high-performance alloys division. The stainless steel division has 6 factories, 17 service centers, 26 warehouses, 43 sales offices, and 9 agents. The high-performance alloys division has 7 factories, 3 service centers, 0 warehouses, 14 sales offices, and 13 agents. The world map shows the countries in which the Acerinox Group is present. The countries are colored in purple.\n\n{141}------------------------------------------------\n\n## **1.6 Relevant events**\n\n## **A. Acerinox, a future of excellence with a renewed focus on added value**\n\nAcerinox's mission is to become a global supplier that addresses present and future needs by offering the widest selection of solutions.\n\nTo achieve this, the Group has designed a strategic plan based on four pillars. At its core, we have the production of higher-value-added solutions, orienting the sales mix towards special stainless steels and high-performance alloys. Alongside this pillar, excellence stands out; the Group offers the highest quality standards and maintains a spirit of perpetual improvement in both products and processes.\n\nBoth pillars are based on financial strength, guaranteeing stability and profitability for the various stakeholders. Finally, the three pillars described above are supported and built on the Company's firm commitment to be a leader in sustainability and circular economy.\n\nAs part of this strategy, which is aimed at developing and expanding higher-value-added solutions, Acerinox strengthened its commitment to VDM Metals in 2023 with a new EUR 67 million investment in the Group's world-leading high-performance alloys division, acquired in 2020.\n\nThis renewed focus on higher-value-added and faster-return products will increase production by 15% and boost efficiency with additional sales of more than 6,000 metric tons per year from 2026.\n\nVDM Metals is a lever for the Group's transformation as a supplier of a wide variety of materials, modifying the sales mix with new high-value-added products. Thus, Acerinox will further leverage the competitive advantage conferred by the 'stainless steel-highperformance alloys platform' to expand its portfolio and offer differential end-to-end solutions, from commodities to special alloys.\n\nIn parallel to these new investments, the Group continues to drive forward operational excellence through Beyond Excellence, an ambitious new program that will kick off between 2024 and 2026. Its main goal is to enhance comprehensive competitiveness through continuous improvement ideas that will be implemented across all Acerinox factories through digital transformation, cross-functional collaboration and a commitment to innovation.\n\nBoth projects are part of Acerinox's Strategic Plan 2021-2025 and will strengthen two pillars: added value, thanks to new investments in VDM Metals, and excellence, through the Beyond Excellence program. Their impact on the Group's other two main pillars sustainability and financial strength - will also be direct.\n\n## **B. Beyond Excellence:** a new plan to drive forward comprehensive competitiveness\n\nThe Beyond Excellence Plan is based on six pillars (decarbonization, efficiency, sales excellence, productivity and automation, quality and customer service, and purchasing), with specific objectives for each one.\n\nThe program is being launched to improve Acerinox's operational excellence and competitiveness. It will save EUR 100 million from 2024 to 2026 by combining costs/savings and revenue improvements while fostering a culture of continuous improvement and innovation across the organization.\n\nImage /page/141/Picture/14 description: The image shows a close-up of a building's exterior with a repeating pattern of rectangular shapes. The shapes are arranged in a staggered fashion, creating a three-dimensional effect. The shapes are made of a light-colored material, possibly metal or concrete, and have a smooth surface. The lighting is soft and diffused, creating subtle shadows that accentuate the shapes. The overall effect is modern and architectural.\n\n{142}------------------------------------------------\n\nImage /page/142/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside a dark blue circle that is open at the top, creating a crescent shape around the text. The background is white.\n\n## **C. New investment in NAS bolsters its leadership:** wider range, higher output\n\nNorth American Stainless (NAS), the Acerinox Group's main integrated stainless steel factory in the US, is strengthening its leading position in the American market with a new investment (its thirteenth since 1990) totaling US\\$244 million. This will increase its production capacity by 20% to 200,000 metric tons.\n\nThe new equipment will increase the volume of flat products, with a special focus on higher-value-added products such as Bright Annealing (BA) and steels with special compositions to keep up with expected growth in this area.\n\nNAS, one of the most efficient and advanced factories in the world, leads the industry in the US. It produces nearly 50% of the nation's stainless steel, supporting American supply security while creating quality jobs. The plant will have, among other equipment, a new cold rolling mill and modernized annealing and pickling lines.\n\nThese investments will create 70 new jobs in addition to the factory's 1,600 employees and 500 local service providers.\n\n## **D. Consolidated leadership in sustainability:** second EcoVadis Platinum Medal\n\n#### This highest-level rating places the Group among the top 1% of companies in the sector worldwide\n\nFor the second consecutive year, Acerinox has been awarded the Platinum Medal by EcoVadis, the highest global rating in corporate sustainability. This rating evaluates corporate social responsibility in global supply chains.\n\nThe Company has passed the qualification process, demonstrating its solid management system. The assessment includes 21 sustainability criteria divided into four main areas: environment, labor and human rights, ethics and sustainable procurement.\n\nThis year, Acerinox obtained an overall score of 82 points; this placed it in the 99th percentile, at the top of the sector, as well as exceeding the score it received last year (79 points).\n\nThis distinction validates and demonstrates the Group's commitment to sustainability, supporting Acerinox's goal of creating the most efficient materials for the future, minimizing environmental impacts and maximizing benefits to society.\n\nImage /page/142/Picture/13 description: The image shows a low-angle view of several tall buildings in a city. The buildings are made of glass and steel, and they reflect the sky and clouds. The sky is cloudy and overcast. The buildings are of varying heights and designs, with some being taller and more modern than others. The overall impression is one of urban density and architectural diversity.\n\n{143}------------------------------------------------\n\n## **2. Strategy**\n\n## **2.1 Global context**\n\nThe year 2023 was again marked by geopolitical tensions and supply chain problems. The Russia-Ukraine conflict was joined by the Gaza-Israel conflict and, at the end of the fiscal year, incidents in the Red Sea disrupted trade routes, diverting Suez Canal cargo flows to longer, more costly alternative routes.\n\n#### **The stainless steel sector**\n\nThe stainless steel division had a year of low activity following the inventory adjustment phase launched in the second half of 2022.\n\nIn this regard, there were significant adjustments in all producing countries except China and Indonesia, where generated surpluses resulted in greater market price pressure.\n\nThe latest available data point to a normalization of inventories in all markets, so a recovery in apparent consumption can be expected during 2024. However, the year will continue to be marked by geopolitical uncertainty and the constant threat of overcapacity in Asia.\n\n#### **Europe**\n\nAs a result of the inventory readjustment, apparent consumption in Europe fell by around 20%.\n\nThe main correction, with decreases of more than 50%, occurred in imports, most of which were destined for the distribution market. Demand from end users remained more stable.\n\nLow prices, together with the safeguards and trade protection measures in place, as well as the positive impact of the launch of new anti-circumvention investigations regarding material of Indonesian origin re-rolled in Taiwan, Vietnam and Turkey, caused a notable reduction in imports from these origins.\n\nImage /page/143/Figure/13 description: This image shows a line graph comparing \"Alloy EUR/t\" and \"Base EUR/t\" from January 2022 to October 2023. The y-axis ranges from -2000 to 6000. In January 2022, \"Alloy EUR/t\" is around 4500, and \"Base EUR/t\" is around 2000. \"Alloy EUR/t\" peaks around April 2022 at approximately 5500-6000, then generally declines to around 2500-3000 by October 2023. \"Base EUR/t\" decreases from January 2022 to July 2023, reaching a low of around -100, then increases to around 500-750 by October 2023.\n\n### **United States**\n\nAs in Europe, apparent consumption in the US declined by around 20% compared with the previous year due to the aforementioned inventory adjustment, affecting imports more sharply. The market, on the other hand, maintained a more stable activity level in terms of end users.\n\nImage /page/143/Figure/16 description: This image shows a line graph comparing the prices of Alloy EUR/t and Base EUR/t in the United States (dollars/ton) from January 2022 to October 2023. The y-axis ranges from 0 to 7500. The x-axis shows the months from January 2022 to October 2023. The price of Base EUR/t is relatively stable at around 2000-2500 dollars/ton. The price of Alloy EUR/t starts at around 4500 dollars/ton in January 2022, peaks at around 6500 dollars/ton in April 2022, and then gradually decreases to around 4000 dollars/ton in October 2023.\n\nImage /page/143/Picture/17 description: The image shows a low-angle view of several modern buildings against a blue sky with some clouds. The buildings are primarily constructed with glass and metal, reflecting the sky and clouds. The composition emphasizes the height and angularity of the structures, creating a dynamic perspective.\n\n{144}------------------------------------------------\n\nImage /page/144/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue crescent shape surrounding the word. The crescent shape is open at the bottom.\n\n#### **Asia**\n\nThe Asian market continued to suffer from aggressive pricing and production policies by major Chinese and Indonesian competitors; given the drop in demand from China, this diverted a significant portion of exports to Russia and the Middle East.\n\nImage /page/144/Figure/4 description: The image is a line graph titled \"Price evolution by region (dollars/ton)\". The x-axis represents time, with labels for January, April, July, and October of 2022 and 2023. The y-axis represents price, with a value of 5000. There are three lines on the graph, representing Europe, United States, and Asia. The Europe line starts at approximately 5100 in January 2022, peaks at approximately 5400 in April 2022, and then decreases to approximately 4300 in October 2023. The United States line starts at approximately 5000 in January 2022, peaks at approximately 5300 in April 2022, and then decreases to approximately 4600 in October 2023. The Asia line starts at approximately 4300 in January 2022, peaks at approximately 4500 in April 2022, and then decreases to approximately 3800 in October 2023.\n\nImage /page/144/Picture/5 description: A wooden boardwalk with a metal chain railing runs alongside a body of water. The boardwalk is made of planks of wood that run horizontally across the frame. The metal chain railing is made of metal posts with metal chains strung between them. The body of water is blue and has small waves. The sky is not visible in the image.\n\n#### **The high-performance-alloys sector**\n\nThe high-performance alloys market behaved positively in 2023, though with significant differences from sector to sector. The oil and gas (O&G) and chemical process industry (CPI) markets in particular remained up.\n\nIn the O&G market, bar demand exceeded expectations. During the second half of 2023, the confirmation of many pipeline projects generated a strong increase in demand, especially during the last four months of the year.\n\nChemical process industry, for its part, also saw strong demand throughout the year and was propelled by high demand for electrolyzer applications.\n\nAs expected, the automotive market experienced a slight decline while the aerospace market continued to improve, especially in long product.\n\nThe electronics sector was much weaker than in previous years, with recovery expected in the second half of 2024.\n\nAcerinox's powder production business for additive manufacturing experienced its best year yet in 2023, and the forecast points to further growth in this product niche.\n\n### **GDP growth (IMF - World Economic Outlook)**\n\n|              | 2022 | 2023 | 2024 |\n|--------------|------|------|------|\n| China        | 3.0  | 5    | 4.6  |\n| Germany      | 1.8  | -0.3 | 0.5  |\n| India        | 7.2  | 6.7  | 6.5  |\n| South Africa | 1.9  | 0.6  | 1.0  |\n| Spain        | 5.8  | 2.4  | 1.5  |\n| USA          | 1.9  | 3    | 2.1  |\n| ASEAN-5      | 5.5  | 4.2  | 4.7  |\n| Eurozone     | 3.4  | 0.5  | 0.9  |\n| World        | 4    | 3.1  | 3.1  |\n\n{145}------------------------------------------------\n\nImage /page/145/Picture/1 description: The image shows a logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The letters are dark blue. The logo is partially obscured by a large, dark blue circle that surrounds the text. The circle is thick and appears to be a solid color.\n\n## 2.1.1 Global production\n\n#### **\\_Global stainless steel production 1950 - 2023**\n\nImage /page/145/Figure/4 description: The image is a line graph that shows production in Tn on the y-axis and year on the x-axis. The graph shows a steady increase in production from 1950 to 2020. The production was around 2 Tn in 1950 and increased to around 55 Tn in 2020.\n\nImage /page/145/Picture/5 description: The image shows a steel frame structure under construction against a light blue sky. The structure consists of vertical steel beams supporting horizontal beams and trusses. The trusses are made of a network of diagonal steel members. The steel is dark in color, and the sky is visible through the open framework of the structure.\n\n#### **\\_Global stainless steel production (millions of metric tons)**\n\nImage /page/145/Figure/7 description: The image shows two donut charts, one for 2022 and one for 2023. The 2022 donut chart shows the following percentages: Europe 6.3%, United States 4%, China 32%, India 2.7%, Japan 8.3%, and Other 2.0%. The 2023 donut chart shows the following percentages: Europe 6.0%, United States 3.7%, China 36%, India 2.2%, Japan 7.6%, and Other 2.0%.\n\n#### **\\_Global melting shop production (thousands of metric tons)**\n\n|      | Q1     | Q2     | Q3     | Q4     | Total  |\n|------|--------|--------|--------|--------|--------|\n| 2022 | 14,536 | 14,695 | 12,768 | 13,856 | 55,855 |\n| 2023 | 13,467 | 14,410 | 14,727 | 14,281 | 56,885 |\n\n#### **\\_Global melting shop production by region / country (thousands of metric tons)**\n\n|        | 2022   | 2023   | Variation |\n|--------|--------|--------|-----------|\n| Europe | 6,294  | 6,034  | -4.1%     |\n| US     | 2,017  | 1,807  | -10.4%    |\n| China  | 32,575 | 35,603 | 9.3%      |\n| India  | 3,943  | 3,704  | -6.1%     |\n| Japan  | 2,686  | 2,158  | -19.7%    |\n| Other  | 8,340  | 7,580  | -9.1%     |\n| Total  | 55,855 | 56,886 | 1.8%      |\n\n{146}------------------------------------------------\n\nImage /page/146/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in black, set against a blue circle. The text is positioned on the left side of the circle, with the letters partially obscured by the circle's edge. The circle is a solid blue color.\n\n## 2.1.2 Raw materials\n\n#### **Nickel**\n\n#### **\\_Official price on the LME 2022 – 2023**\n\nAverage spot price / three months in US\\$/t.\n\nImage /page/146/Figure/6 description: This line graph shows values between \"4-Jan-22\" and \"5-Sept-23\". The y axis ranges from 10,000.00 to 50,000.00. The line starts at approximately 23,000.00 at \"4-Jan-22\", rises sharply to approximately 44,000.00, then drops to approximately 31,000.00, then fluctuates between approximately 20,000.00 and 32,000.00 until \"4-Jan-23\", then fluctuates between approximately 22,000.00 and 32,000.00 until \"5-May-23\", then decreases to approximately 18,000.00 at \"5-Sept-23\".\n\nThe downward trend in nickel prices continued throughout the period, starting 2023 above US\\$31,000 and closing at around US\\$16,500.\n\nOne of the main reasons for this sharp drop was the increased availability of all nickel sources. The surplus also extended to pure nickel due to weak demand, higher supply and new production capacities in China and Indonesia.\n\nThe gradual increase in stocks on the London and Shanghai metal exchanges also contributed to maintaining this downward trend in price.\n\n#### **Ferrochrome**\n\nRobust chrome ore prices, announced ferrochrome production cuts and the price of energy in South Africa led to a price increase during the second quarter.\n\nThe second part of the year was marked by a price correction in the face of reduced global demand.\n\n#### **\\_Average quarterly ferrochrome price**\n\nImage /page/146/Figure/14 description: The image shows the text \"US¢ / Lb. Cr\".\n\nImage /page/146/Figure/15 description: The image is a line graph showing data points for eight different quarters, from Q1-2022 to Q4-2023. The y-axis ranges from 0 to 200. The data points are approximately as follows: Q1-2022 is around 185, Q2-2022 is around 215, Q3-2022 is around 185, Q4-2022 is around 155, Q1-2023 is around 155, Q2-2023 is around 180, Q3-2023 is around 160, and Q4-2023 is around 165.\n\n{147}------------------------------------------------\n\nImage /page/147/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is positioned in the lower-left quadrant of the circle.\n\n#### **Molybdenum**\n\nThe announcement of a larger-than-expected shortfall in molybdenum concentrate production maintained the upward price trend at the beginning of the year, with prices peaking above US\\$38/lb Mo in February.\n\nReadjusted demand caused a price correction, with the price reaching its lowest levels during the month of April. Slight movements in the flow of imports and exports from the Asian market set its course during the second half of the year.\n\nImage /page/147/Figure/5 description: This line graph shows a fluctuating trend over time. Starting from January 4th, the value hovers around 20 until around May 27th, where it begins to decrease, reaching a low around August 9th. From August 9th to January 3rd, there is a significant increase, peaking around 40. After January 3rd, the value sharply declines until around May 30th. From May 30th to August 8th, the value gradually increases, then decreases again until around October 18th. Finally, from October 18th to December 29th, the value shows a slight increase.\n\n#### **Ferrous scrap**\n\nAfter a first quarter characterized by the replenishment of stocks and an improved economic outlook, the rest of the year presented a very even supply/demand balance, keeping scrap prices at a high but stable level.\n\n#### **\\_Price of ferrous scrap HMS 1&2 FOB Rotterdam (monthly averages)**\n\nImage /page/147/Figure/9 description: This line graph shows the price of a commodity in US dollars per ton from January 2022 to October 2023. The y-axis ranges from 0.00 to 500.00 US\\$/t. The price starts at around 450 US\\$/t in January 2022, rises to a peak of around 580 US\\$/t in April 2022, and then falls sharply to around 320 US\\$/t in July 2022. The price then fluctuates between 300 and 350 US\\$/t until January 2023, when it begins to rise again. The price peaks at around 420 US\\$/t in April 2023, and then falls slightly to around 320 US\\$/t in July 2023. The price then rises slightly to around 350 US\\$/t in October 2023.\n\nImage /page/147/Picture/10 description: The image shows a cityscape with several tall buildings. The buildings are made of glass and steel, and they have a modern design. The sky is cloudy, and the overall tone of the image is gray. In the foreground, there is a set of stairs with metal railings. The stairs lead up to a platform that overlooks the city. The image is well-composed and visually appealing.\n\n{148}------------------------------------------------\n\nImage /page/148/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in black. A blue circle partially surrounds the word, starting from the top left and extending around to the top right. The circle is thicker at the top and tapers as it goes around the word.\n\n## **2.2 Strategic plan**\n\nImage /page/148/Figure/3 description: The image shows a stylized icon representing business strategy. It features a chess knight's head in outline, overlaid with a line graph and bar chart. The knight's head is positioned on the left, facing right. The line graph and bar chart are on the right, with the line graph showing an upward trend. The bar chart consists of several vertical bars of varying heights. The entire icon is rendered in a light purple color.\n\n#### **Acerinox continues to successfully advance in the implementation of its strategic plan 2021-2025.**\n\nThe deployment is based on the Group's vision: to become a global supplier that responds to present and future needs by offering the widest selection of materials, solutions and services. As a leader and driver in circular economy, Acerinox efficiently manufactures stainless steels and high-performance alloys with a focus on respect and committed to the environment.\n\nImage /page/148/Picture/6 description: The image shows a modern building with a curved glass facade against a blue sky with clouds. The building's design features multiple layers of curved glass panels, creating a sleek and contemporary look. The glass reflects the sky, adding depth and dimension to the image. The sky is light blue with scattered white clouds, providing a soft and airy backdrop to the building. The overall composition is clean and minimalist, emphasizing the building's architectural design and the natural beauty of the sky.\n\nThe strategic plan is based on four pillars that support short-, medium- and long-term initiatives.\n\nImage /page/148/Figure/8 description: The image shows the strategic plan for 2021-25, centered around 4 key pillars. The pillars are: Added value, Excellence, Sustainability, and Financial strength. Under \"Added value\" is the word \"PREMIUM\" and the text \"Shifting revenue mix to HPAs and value-added products\". Under \"Excellence\" is the word \"LEADER\" and the text \"Driver for the Group's competitiveness\". Under \"Sustainability\" is the word \"CORE\" and the text \"Core to our business model and a driver for value-add\". Under \"Financial strength\" is the word \"EFFICIENT\" and the text \"Accountable, transparent through-cycle capital allocation\". Below the pillars is the text \"Deliver through-cycle value creation\". There are logos for \"Sustainability\" and \"ACERINOX\" in the upper right corner.\n\n{149}------------------------------------------------\n\nImage /page/149/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle that is open at the bottom.\n\n#### **\\_Strategic pillars**\n\n#### **• Added value**\n\nIn 2023, Acerinox strengthened its market presence by standing out from the competition through the evolution of its portfolio. The development and expansion of products and solutions towards high-performance alloys in the US, Europe and South Africa was particularly significant.\n\n#### **• Excellence**\n\nThis is one of the values that directs the rest of the pillars and acts as a lever for competitiveness. The Group always offers the highest standards of excellence, balanced with cost management and with an overall positive impact on operations.\n\n#### **• Sustainability**\n\nThis is the fundamental axis underpinning the Group's business model, based on circular economy. Sustainability enables the integration and cohesion of the other pillars.\n\n#### **• Financial soundness**\n\nFinancial soundness guarantees shareholder remuneration and ensures our commitment to generate sustainable cash flow while maintaining a low level of indebtedness that allows us to face any cycle.\n\nImage /page/149/Figure/11 description: The image shows a pyramid diagram illustrating a sales mix strategy. The pyramid is divided into three levels. The top level, colored in orange, is labeled \"HPAs\" and includes the text \"End user\" and \"Distribution\". The middle level, in light purple, is labeled \"High-value-added stainless steel\" and also includes the text \"End user\" and \"Distribution\". The bottom level, in dark purple, is labeled with \"Tailor-made stainless steel\" and \"Commodity stainless steel\", and includes the text \"End user\" and \"Distribution\". The image also contains the text \"We are changing our sales mix to include more HPAs and value-added products\".\n\nImage /page/149/Picture/12 description: The image contains two horizontal rectangles. The top rectangle is a darker shade of purple, while the bottom rectangle is a lighter shade of purple. The bottom rectangle is slightly offset to the right compared to the top rectangle.\n\nImage /page/149/Picture/13 description: The image shows a close-up of a modern architectural structure with a series of parallel, vertical elements against a clear blue sky. The elements appear to be made of a dark, reflective material, possibly metal, and are arranged in a slightly curved or wave-like pattern. The lighting creates highlights and shadows on the surfaces, emphasizing the three-dimensional form of the structure. The overall composition is abstract and emphasizes the geometric shapes and patterns.\n\n{150}------------------------------------------------\n\nImage /page/150/Picture/1 description: The image shows the text \"Key milestones 2023\" in a large, bold, purple font.\n\nImage /page/150/Picture/2 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. To the right of the wordmark is a partial circle, also in dark blue, that appears to be behind the text, creating a sense of depth.\n\n#### **\\_NAS expansion project**\n\nIn line with Acerinox's commitment to high-value-added products and performance, the Group gave a boost to its US factory, North American Stainless (NAS), one of the most efficient in the world.\n\nDuring 2023, the contracting process for equipment and construction work began; this will generate 70 new jobs as part of a US\\$244 million investment.\n\nThe expansion project includes the modernization of the annealing and pickling lines, the addition of a new cold rolling mill and the expansion of the melting shop, which will include a 400 metric ton crane, as well as the development of digital solutions that will increase production capacity by 20% to 200,000 metric tons.\n\n#### **\\_VDM expansion project**\n\nVDM Metals' leadership in the high-performance alloys industry has been strengthened by a EUR 67 million investment in its German plants in Unna, Altena and Werdohl, which will gradually increase its production capacity of precision strip, bars, and wires, as well as increasing sales by 15%.\n\nProjects include the expansion of three remelting furnaces, the upgrade of an annealing and pickling line, and another defect detection line for bars.\n\nImage /page/150/Picture/10 description: The image shows an architectural structure with a complex grid-like pattern. The structure appears to be a roof or ceiling, with a curved shape and a repeating pattern of interconnected beams or panels. The grid is made up of a series of squares or rectangles, with smaller elements connecting them at the corners. The overall effect is one of intricate design and structural complexity. The image is shot from a low angle, looking up at the structure, which emphasizes its size and scale. The lighting is soft and diffused, which creates a sense of depth and dimension. The colors are muted, with a predominance of grays and whites, which gives the image a modern and minimalist feel.\n\n#### **\\_Second powder sprayer**\n\nAnother focus of the project is the addition of a second powder sprayer plant, used for additive manufacturing (3D printing, used in many areas of high-demand industrial production). VDM Metals enjoys great recognition in this sophisticated format, where it will double its production capacity.\n\nThis investment is significant not only because it reflects the Group's strengthened R&D activity, but also because it underscores its innovative vision, given that the market in metal powders for additive manufacturing has double-digit growth potential.\n\n#### **\\_Exploiting synergies with the highperformance alloys division**\n\nThe investment made in the VDM facilities at Werdohl and Acerinox Europa (Campo de Gibraltar) will enhance synergies in the production of highperformance alloys and increase the range of products available.\n\n#### **\\_Looking to the future: Beyond Excellence 24- 26**\n\nThe Acerinox Group continues to promote excellence through its Beyond Excellence program. The new Excellence Plan will be implemented at all Group factories, carrying out projects between 2024 and 2026 with the aim of reaching EUR 100 million in EBITDA by 2026.\n\n{151}------------------------------------------------\n\nImage /page/151/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, enclosed within a blue circle that is open on the bottom right.\n\nThe purpose of this plan is to improve all areas of the supply chain and to boost the Group's global competitiveness by implementing projects aimed at continuous improvement and adaptability centered on digital transformation, interdisciplinary collaboration, and a commitment to innovation using a holistic approach.\n\nBeyond Excellence is based on six pillars: decarbonization, productivity, quality, efficiency, purchasing optimization, and new product development.\n\nWith specific targets for each, during 2024, we will work along the following lines:\n\n- Increasing quality and in the production of high-value-added steels.\n- Optimize the use of scrap as the main raw material.\n- Increasing equipment productivity through digitalization.\n- Using predictive techniques to improve the quality and maintenance of equipment and processes.\n- Refining energy efficiency resources and consumables, which will result in reduced CO2 emissions.\n\nAs an added value, Beyond Excellence aims - in line with the management by objectives philosophy - to deepen the culture of continuous improvement and innovation at all levels of the organization.\n\nImage /page/151/Picture/11 description: The image shows a low-angle view of several skyscrapers against a clear blue sky. The buildings vary in design, with some featuring glass facades, others with more traditional concrete or stone exteriors, and one appearing to be under construction with a crane visible. Evergreen trees are visible at the bottom of the frame, adding a touch of nature to the urban scene.\n\n{156}------------------------------------------------\n\n## **3. Governance**\n\n#### **GRI 3-3 / 2-19 / 2-20**\n\n**In 2023, Acerinox's new dividend policy came into effect, establishing a stable dividend in its total amount and to the extent that the securities acquired through the share buyback programs are written off, increasing per share. The dividend is distributed in two annual payments, one in January and one in July.**\n\nThe Group's Annual Shareholders' Meeting - held on May 23, 2023, as proposed by the board of directors at their April 12, 2023 meeting and following a report from the Appointments, Remuneration and Corporate Governance Committee - approved an amendment to the Directors' Remuneration Policy. This change implies the inclusion of a clawback clause relating to the total short-term variable remuneration referring therefore to the annual bonus and the Long-Term Incentive whereby the executive directors and senior management personnel of the Company may be required to repay in full the amounts unduly received\n\nThis amendment of the Board of Directors' Regulations was reported on at the 2023 general meeting of shareholders. Said amendment was agreed upon at the meeting of the board of directors held on February 27, 2023, in order to incorporate the regulation of the position of lead independent director. The aforementioned amendment to the regulations was registered with the Madrid Company Register.\n\n## **3.1 Board of directors**\n\n#### **GRI 3-3 / 2-9 / 2-11 / 2-12 / 2-13 / 2-14 / 2-17 / 2-18**\n\nIn 2023, Acerinox's board of directors met fourteen (14) times and consisted of eleven (11) directors. At the Annual Shareholders' Meeting held on May 23, 2023, Mr. Ignacio Martín San Vicente stepped down as independent director, having completed the statutory term for which he had been appointed. In turn, Mr. Pedro Sainz de Baranda Riva was appointed independent director for a term of four (4) years. Mr. George Donald Johnston was also re-elected as independent director at the aforementioned general meeting of shareholders.\n\nImage /page/156/Picture/9 description: The image shows a low-angle shot of a modern building with a unique facade design. The building's exterior is composed of a repeating pattern of diamond-shaped openings, creating a visually striking and textured surface. The color palette is primarily white and gray, with the building's structure appearing in a light gray tone. The sky is visible through the diamond-shaped openings, featuring a mix of blue sky and white clouds. The overall composition of the image emphasizes the building's architectural design and its integration with the natural environment.\n\nIn 2023, the Acerinox board of directors carried out an annual evaluation of its performance and that of its committees through an independent external consultant.\n\nIn terms of training, the members of the Sustainability Committee were trained in various subjects, such as the new corporate sustainability reporting directive (CSRD), and climate risks\n\nThe 2023 Acerinox Annual Corporate Governance Report, the Directors' Remuneration Report, the Financial Statements and the Management Report are available on the Spanish National Securities Market Commission and Acerinox websites.\n\nThe board of directors, in collaboration with its committees, approves the Group's policies. The board of directors and its committees, monitor the company's targets, including those related to sustainability.\n\n#### **Skills matrix**\n\nAt the behest of the Appointments, Remuneration and Corporate Governance Committee, the board of directors drew up and approved its own skills matrix. This document is made to serve as a mandatory guide for all board member selection processes and assignments to specific committees.\n\nThe board of directors brings together a huge range of skills, encompassing industry, sales, investment banking, and finance, as well as specialization in areas such as audit, sustainability, energy and new technologies. It is common for directors to have previous experience on the boards of other major international companies. Similar criteria, extensive experience and a wide variety of knowledge guide the decisions to assign professional profiles to each committee.\n\n{157}------------------------------------------------\n\n**Report**\n\n## **Board of directors**\n\nImage /page/157/Picture/3 description: This image shows a man with short brown hair, wearing a dark blue suit and a red tie with white polka dots. He has fair skin and a serious expression. The background is plain white.\n\n## **CARLOS ORTEGA ARIAS-PAZ**\n\nChairman\n\nProprietary Director representing Corporación Financiera Alba, S.A. Member of the board of directors since May 2022.\n\nElected with the favorable vote of 91.99% of the subscribed voting capital attending the 2022 Annual Shareholders' Meeting.\n\nHolder of 11,111 shares at December 31, 2023.\n\nImage /page/157/Picture/9 description: A man with short dark hair is wearing a dark suit jacket and a light blue tie. He is looking directly at the camera with a serious expression. The background is plain white.\n\n## **BERNARDO VELÁZQUE Z**\n\n## **HERREROS**\n\nChief Executive Officer Executive\n\nMember of the board of directors since 2010, re-elected in 2014, 2018 and 2022.\n\nChief Executive Officer since July 2010. He is a member of the Executive Committee.\n\nRe-elected with the favorable vote of 92.55% of the subscribed voting capital attending the 2022 Annual Shareholders' Meeting.\n\nHolder of 82,690 shares at December 31, 2023.\n\nImage /page/157/Picture/17 description: A woman with long brown hair is shown in a head and shoulders shot. She is wearing a light beige turtleneck sweater and a delicate necklace. The background is plain white.\n\n## **ROSA MARÍA GARCÍA PIÑEIRO**\n\nExternal independent Member of the board of directors\n\nsince 2017, re-elected in 2021.\n\nShe chairs the Sustainability Committee and is a member of the Executive Committee.\n\nRe-elected with the favorable vote of 97.32% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/157/Picture/23 description: This is a portrait of a woman with red hair. She is wearing a dark blazer with a white ruffled shirt underneath. The blazer has a decorative emblem on the lower left side. The woman is smiling and looking directly at the camera. The background is white.\n\n## **LAURA G. MOLERO**\n\nExternal independent Member of the board of directors since 2017, re-elected in 2021.\n\nShe chairs the Appointments, Remuneration and Corporate Governance Committee and is a member of the Audit Committee.\n\nRe-elected with the favorable vote of 97.24% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/157/Picture/28 description: This image shows a man with short gray hair, wearing a dark blue suit and a pink patterned tie. He is smiling slightly and looking directly at the camera. The background is plain white.\n\n### **GEORGE DONALD JOHNSTON**\n\nLead independent director Member of the board of directors since 2014,\n\nre-elected in 2019 and 2023.\n\nHe is a member of the Audit Committee and the Executive Committee.\n\nHolder of 6 shares at December 31, 2023.\n\nRe-elected with the favorable vote of 87.76% of the subscribed voting capital attending the 2019 Annual Shareholders' Meeting.\n\nImage /page/157/Picture/35 description: A professionally lit headshot of a middle-aged man with short, graying hair and glasses. He is wearing a dark suit, a white shirt, and a gray tie. He is smiling slightly and looking directly at the camera. The background is plain white.\n\n### **FRANCISCO JAVIER GARCÍA SANZ**\n\nExternal independent Member of the board of directors since 2020.\n\nHe is a member of the Executive Committee and the Appointments, Remuneration and Corporate Governance Committee.\n\nElected with the favorable vote of 92.78% of the subscribed voting capital attending the 2020 Annual Shareholders' Meeting.\n\n{158}------------------------------------------------\n\nImage /page/158/Picture/1 description: This image shows a man with short brown hair and a beard. He is wearing a dark blue suit jacket, a white shirt, and a green tie. He is smiling and looking directly at the camera. The background is white.\n\n**Report**\n\n### **TOMÁS HEVIA ARMENGOL**\n\nExternal proprietary, representing Corporación Financiera Alba, S.A. Member of the board of directors since 2016, re-elected in 2021.\n\nHe is a member of the Audit and Sustainability Committees.\n\nRe-elected with the favorable vote of 99.13% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/6 description: This is a portrait of a blonde woman with fair skin, wearing a dark blue blazer. She has shoulder-length wavy hair and is smiling at the camera. Her arms are crossed in front of her.\n\n## **MARTA MARTÍNEZ ALONSO**\n\nExternal independent Member of the board of directors since 2017,\n\nre-elected in 2021. She is a member of the Sustainability\n\nCommittee.\n\nRe-elected with the favorable vote of 98.05% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/11 description: This is a headshot of a woman with fair skin and shoulder-length blonde hair. She is wearing a dark blue blazer over a white top. The background is white.\n\n### **LETICIA IGLESIAS HERRAIZ**\n\nExternal independent Member of the board of directors since 2020.\n\nShe chairs the Audit Committee. and sits on the Sustainability Committee.\n\nElected with the favorable vote of 92.59% of the subscribed voting capital attending the 2020 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/16 description: A man with light brown hair is wearing a dark suit and a blue tie. He is facing forward and smiling slightly. The background is white.\n\n## **SANTOS MARTÍNEZ-CONDE GUTIÉRREZ-BARQUÍN**\n\nExternal proprietary, representing Corporación Financiera Alba, S.A.\n\nMember of the board of directors since 2002, re-elected in 2006, 2010, 2014, 2018 and 2022.\n\nHe is a member of the Executive Committee and of the Appointments, Remuneration and Corporate Governance Committee\n\nRe-elected with the favorable vote of 91.57% of the subscribed voting capital attending the 2022 Annual Shareholders' Meeting.\n\nHolder of 9,997 shares at December 31, 2023.\n\nImage /page/158/Picture/23 description: This is a headshot of a middle-aged man with short brown hair and blue eyes. He is wearing a black suit jacket over a light blue button-down shirt. The background is white.\n\n## **PEDRO SAINZ DE BARANDA RIVA**\n\nExternal independent Member of the board of directors since 2023.\n\nHe is a member of the Appointments, Remuneration and Corporate Governance Committee, as well as the Sustainability Committee.\n\nElected with the favorable vote of 92.05% of the subscribed voting capital attending the 2023 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/28 description: A man with graying hair is wearing a dark suit and a blue tie with white polka dots. He is smiling slightly and looking at the camera. The background is white.\n\n## **LUIS GIMENO VALLEDOR**\n\nSecretary of the Board and General Secretary of the Acerinox Group. Holder of 23,579 shares at December 31, 2023.\n\n{159}------------------------------------------------\n\nImage /page/159/Picture/0 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in bold, sans-serif, dark blue letters. The word is positioned within a partial circle, also in dark blue, that curves around the top and right side of the text. The background is white.\n\n#### **2023 Integrated Annual**\n\n**Report**\n\nThe articles of association establish that the board may have between five (5) and fifteen (15) directors. Although the maximum number has been reached in the past, there are currently eleven (11) members after the former chairman stepped down in 2022. This number is considered adequate to understand the current needs of the company, although it is subject to change in the future if the circumstances so require.\n\n|                                   |                                 |        | Director  |             |             | Committee |       |                                     |                | Other                |\n|-----------------------------------|---------------------------------|--------|-----------|-------------|-------------|-----------|-------|-------------------------------------|----------------|----------------------|\n| Name                              | Charge                          | Gender | Executive | Proprietary | Independent | Executive | Audit | Appointments<br>and<br>Remuneration | Sustainability | First<br>appointment |\n| Carlos<br>Ortega<br>Arias-Paz     | Chairman                        |        |           | ☑           |             | ☑C        |       |                                     |                | 2022                 |\n| Bernardo<br>Velázquez<br>Herreros | Chief<br>Executive<br>Officer   |        | ☑         |             |             | ☑         |       |                                     |                | 2010                 |\n| Laura G.<br>Molero                | Director                        |        |           |             | ☑           |           | ☑     | ☑C                                  |                | 2017                 |\n| Rosa María<br>Garcia<br>Piñeiro   | Director                        |        |           |             | ☑           | ☑         |       |                                     | ☑C             | 2017                 |\n| George<br>Donald<br>Johnston      | Lead<br>independent<br>director |        |           |             | ☑           | ☑         | ☑     |                                     |                | 2014                 |\n| Francisco<br>Javier<br>García     | Director                        |        |           |             | ☑           | ☑         |       | ☑                                   |                | 2020                 |\n| Tomás<br>Hevia<br>Armengol        | Director                        |        |           | ☑           |             |           | ☑     |                                     | ☑              | 2016                 |\n| Leticia<br>Iglesias<br>Herraiz    | Director                        |        |           |             | ☑           |           | ☑C    |                                     | ☑              | 2020                 |\n| Pedro<br>Sainz de<br>Baranda      | Director                        |        |           |             | ☑           |           |       | ☑                                   | ☑              | 2023                 |\n| Marta<br>Martínez<br>Alonso       | Director                        |        |           |             | ☑           |           |       |                                     | ☑              | 2017                 |\n| Santos<br>Martínez-<br>Conde      | Director                        |        |           | ☑           |             | ☑         |       | ☑                                   |                | 2002                 |\n| Luis<br>Gimeno<br>Valledor        | Secretary                       |        |           |             |             | SEC       | SEC   | SEC                                 | SEC            | -                    |\n\n**\\*C: Chairman**\n\n**Man Woma**\n\n**n**\n\n**At the end of 2023, 36% of board members were women, with a target of reaching 40%**\n\n| Board:                    | 7 |\n|---------------------------|---|\n|                           | 4 |\n| Executive Committee:      | 5 |\n|                           | 1 |\n| Audit Committee:          | 2 |\n|                           | 2 |\n| Appointments Committee:   | 3 |\n|                           | 1 |\n| Sustainability Committee: | 2 |\n|                           | 3 |\n\n{160}------------------------------------------------\n\nImage /page/160/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue crescent shape. The crescent partially encircles the text, creating a sense of enclosure or emphasis.\n\n#### **Changes in the board of directors**\n\n#### **GRI 2-10 / 2-11**\n\n**Report**\n\nAt the Annual Shareholders' Meeting, Mr. Ignacio Martín San Vicente stepped down from his position as director, having completed the statutory term for which he had been appointed, and Mr. Pedro Sainz de Baranda Riva was appointed independent director for a term of four (4) years.\n\n#### **Board committees**\n\n#### **\\_Executive Committee**\n\nComposed of six (6) members, it held two (2) meetings.\n\n#### **\\_Audit Committee**\n\nComposed of four (4) members, it held fourteen (14) meetings.\n\n#### **\\_Appointments, Remuneration and Corporate Governance Committee**\n\nComposed of four (4) members, it held twelve (12) meetings.\n\n#### **\\_Sustainability Committee**\n\nConstituted in December 2020, it is composed of five (5) members and held six (6) meetings.\n\nImage /page/160/Picture/14 description: The image is a square QR code with a white background and dark blue modules. The QR code is dense with a pattern of small squares and larger square finder patterns in three of the corners.\n\n#### **See the powers of the committees at:**\n\nURL: https://www.acerinox.com/export/sit es/acerinox/.content/galerias/galeriadescargas/Reglamento-Consejo-Administracin.pdf\n\nImage /page/160/Picture/18 description: The image shows a geometric glass ceiling with a metal frame. The frame is made up of triangular and hexagonal shapes, and the glass panels are clear. The ceiling is lit from above, and the light is diffused by the glass. The overall effect is one of lightness and airiness.\n\n#### **\\_Management Committee**\n\nAt December 31, 2023, the following members sat on the Acerinox Management Committee:\n\n| Ms. Lucía Alonso de<br>Noriega   | Internal Audit                                  |\n|----------------------------------|-------------------------------------------------|\n| Mr. Daniel Azpitarte             | Chief Integration Officer                       |\n| Ms. Esther Camós                 | Consolidation,<br>Budgeting and Taxation        |\n| Mr. José Campuzano               | Health, safety and<br>environment               |\n| Mr. Carlos Castillo              | Legal Advice                                    |\n| Ms. Marisa Dafauce               | Human Resources                                 |\n| Mr. Mark Davis                   | CEO of Bahru Stainless                          |\n| Mr. Antonio Fernández de<br>Mesa | Treasury                                        |\n| Mr. Miguel Ferrandis             | Chief Financial Officer                         |\n| Mr. Cristóbal Fuentes            | CEO of North American<br>Stainless              |\n| Mr. Juan García                  | Risks                                           |\n| Mr. Rodrigo García-Vega          | Compliance                                      |\n| Mr. Antonio Gayo                 | Strategy                                        |\n| Mr. Luis Gimeno                  | Secretary General and<br>Secretary of the Board |\n| Mr. Fernando Gutiérrez           | CEO of Acerinox Europa                          |\n| Mr. Hans Helmrich                | Chief Operating Officer                         |\n| Mr. Carlos Lora-Tamayo           | Investor Relations and<br>Communication         |\n| Mr. Carlos Marqués               | Raw material purchases                          |\n| Mr. Niclas Müller                | CEO of VDM Metals                               |\n| Ms. Deniza Puce                  | Indirect Purchases                              |\n| Mr. Alberto Ruiz                 | Cybersecurity                                   |\n| Mr. Carlos Ruiz                  | Sustainability                                  |\n| Mr. Johan Strydom                | CEO of Columbus<br>Stainless                    |\n| Ms. Isabel Vaca                  | Information Systems                             |\n\n{161}------------------------------------------------\n\n#### **2023 Integrated Annual**\n\n**Report**\n\nThe variable remuneration of senior management, and therefore of executive directors (only the CEO at present), was determined on the basis of a series of metrics:\n\n- The first set is related to the financial performance of the Acerinox Group, such as EBITDA, profit after tax and non-controlling interests, and net debt.\n- The second set are specific indicators of the companies for which the pertinent member of management is directly and particularly responsible.\n- The last set of metrics reflect sustainability performance.\n\nFurther details regarding the process of accrediting the CEO's bonus can be found in the Directors' Annual Remuneration Report, which is published at the same time as this report and is available on the website of the Company and the Spanish National Securities Market Commission. The total remuneration of Senior Management can also be consulted in the Annual Corporate Governance Report in the places mentioned above.\n\nA portion of Senior Management remuneration, like the chief executive officer and other ensembles within Group Management, is linked to the profit obtained by shareholders over a three-year period. This is measured based on the TSR and ROE during these cycles. This component of remuneration is paid in Company shares.\n\n## **For 2023, the effects of the clawback clause for the CEO and Senior Management contracts have been extended to all variable compensation.**\n\nSpecifically, to the annual variable remuneration and the long-term incentive, following the recommendations of the Good Governance Code.\n\n## **3.2 Annual shareholders' meeting**\n\nThe annual general meeting of Acerinox was held on May 23, 2023 in Madrid with the physical presence of the Company's shareholders. A total of 1,754 shareholders, either in person or by proxy, were in attendance, representing 54.54% of the subscribed voting capital. All items on the agenda were approved with the sufficient majorities required by the Corporate Enterprises Act and the Company's articles of association.\n\nImage /page/161/Picture/11 description: The image shows a symmetrical view of two modern buildings with glass facades reflecting the sky and clouds. The buildings are angled towards each other, creating a V-shape with a bright, white sky visible in the center. The glass panels are framed by dark, thin lines that form a grid pattern, adding depth and structure to the reflective surfaces. The overall composition is clean and architectural, emphasizing the geometric design and the interplay of light and reflection.\n\n{162}------------------------------------------------\n\nImage /page/162/Picture/1 description: The image shows the text \"4. Economic performance\" in a large, bold, dark blue font. The number 4 is followed by a period, and the words \"Economic\" and \"performance\" are written in sentence case.\n\n## **4.1 Production**\n\nThe Acerinox Group produced 1.9 million metric tons in 2023, of which 96 % corresponded to the stainless steels division and 4 % to the high-performance alloys division.\n\nImage /page/162/Figure/5 description: This image is a line graph comparing the production of a melting shop and cold-rolling from 2011 to 2023. The y-axis is labeled with values 0, 2,000,000, and 4,000,000. The melting shop production starts at approximately 2,100,000 in 2011, gradually increases to around 2,400,000 in 2017, then fluctuates, reaching a peak at approximately 2,500,000 in 2021, and finally decreases to about 2,000,000 in 2023. The cold-rolling production starts at approximately 1,600,000 in 2011, increases to around 1,900,000 in 2017, fluctuates, reaching a low of approximately 1,600,000 in 2021, and ends at approximately 1,500,000 in 2023.\n\n### **\\_Quarterly performance of stainless steel division production (thousands of metric tons)**\n\n|                             | 2023 |     |     |     |             | 2022    | Variation   |\n|-----------------------------|------|-----|-----|-----|-------------|---------|-------------|\n|                             | Q1   | Q2  | Q3  | Q4  | Accumulated | Jan-Dec | 2023 - 2022 |\n| Melting shop                | 515  | 465 | 423 | 468 | 1,869       | 2,108   | -11.3%      |\n| Cold rolling                | 311  | 304 | 283 | 328 | 1,225       | 1,441   | -15.0%      |\n| Long products (hot rolling) | 42   | 36  | 32  | 28  | 139         | 233     | -40.6%      |\n\n### **\\_Quarterly performance of high-performance alloys division production (thousands of metric tons)**\n\n|                | 2023 |    |    |    | 2022        |         | Variation   |\n|----------------|------|----|----|----|-------------|---------|-------------|\n|                | Q1   | Q2 | Q3 | Q4 | Accumulated | Jan-Dec | 2023 - 2022 |\n| Melting shop   | 19   | 21 | 17 | 18 | 76          | 82      | -7.0%       |\n| Finishing shop | 8    | 12 | 11 | 10 | 40          | 44      | -9.2%       |\n\nImage /page/162/Picture/10 description: The image shows a complex network of pipes and industrial equipment. The pipes are made of metal and are of varying sizes. Some of the pipes are insulated. The equipment is located in a large, open space. The lighting is dim, and the overall impression is one of a busy, industrial environment.\n\nImage /page/162/Picture/11 description: The image contains the word \"ACERINOX\" in bold, white letters inside a blue circle. The circle is slightly cropped on the right side.\n\n{163}------------------------------------------------\n\nImage /page/163/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with a slight 3D effect. The text is positioned within a partial blue circle that curves around the top and right side of the word. The blue circle appears to be a thick line, and it does not fully enclose the text.\n\n### **\\_Group production**\n\nImage /page/163/Figure/3 description: This bar chart shows the melting shop production (MT) for Acerinox Europa, NAS, Columbus, and VDM Metals. Acerinox Europa has a production of 550,162. NAS has a production of 841,821. Columbus has a production of 477,434. VDM Metals has a production of 76,288.\n\nImage /page/163/Picture/4 description: The image shows a close-up of a gear mechanism, possibly part of a machine or engine. The gears are made of metal and have a shiny, reflective surface. The image is in black and white, which gives it a timeless and industrial feel. The gears are intricately designed, with many teeth and grooves that interlock to create a complex system. The image is well-lit, with the light reflecting off the metal surfaces and creating highlights and shadows. The overall effect is one of precision and engineering.\n\nImage /page/163/Figure/6 description: This bar chart shows the values for Acerinox Europa, NAS, Columbus, Bahru, and VDM Metals. Acerinox Europa has a value of 407,045. NAS has a value of 542,005. Columbus has a value of 199,127. Bahru has a value of 77,181. VDM Metals has a value of 39,973.\n\nIn 2023, production in the stainless steel division maintained the downward trend that appeared during the fourth quarter of 2022.\n\nThe low level of demand throughout the year, along with the inventory reduction process, meant that all the factories in the stainless steel division had to adjust their production to market conditions.\n\nIn the case of the high-performance alloys division, demand remained stable throughout the year, while production activity was slightly lower than in the record year of 2022 (-7% melting shop production).\n\n{164}------------------------------------------------\n\n## **4.2 Financial results**\n\n#### **\\_Key indicators - EUR million**\n\n| 703    | 6.608   | 228        | 341                | 13.34% |\n|--------|---------|------------|--------------------|--------|\n| EBITDA | REVENUE | NET INCOME | NET FINANCIAL DEBT | ROCE   |\n\nImage /page/164/Picture/5 description: The image shows the number 13.34% in a bold, dark blue font. There is a short, horizontal, light orange line underneath the number.\n\n#### **Group's consolidated results**\n\nIn a complex environment, Acerinox's results reflect the Group's resilience even at the lowest points in the cycle. 2023 was marked by macroeconomic and geopolitical tensions, supply chain challenges and incidents affecting trade routes. In these circumstances, the Group's flexibility in adapting to market conditions, cost controls, working capital reduction and debt reduction was evident.\n\nThe remarkable results given this market context demonstrate the foresight of the strategic decisions made in recent years, as well as the increased efficiency achieved in the last decade. Acerinox is managing to flatten and mitigate industry's cyclical nature while consolidating a new profitability threshold and consistently generating value across different economic cycles.\n\nThe stainless steel industry was affected by the inventory reduction process launched during the second half of 2022. Uncertainties in different markets pushed back new purchases, causing a sharp drop in apparent demand, which affected the Group's operations during 2023.\n\nOn the other hand, the high-performance alloys market - the focus of part of Acerinox's strategy, renewing its commitment to higher-value-added products - performed satisfactorily, maintaining its strength, solid demand and good prospects.\n\n### **Diversification and added value**\n\nIn recent years, Acerinox has focused its strategy on a process of geographic and product diversification, with a special focus on higher-value-added solutions.\n\nIn 2023, the Group's main markets faced similar challenges: downward trends in demand and consumption, high inventory levels and the uncertainties generated by the geopolitical situation. While Europe suffered from falling prices and rising costs, prices remained stable in the North American market.\n\nIn addition, the high-performance alloys industry boosted Acerinox's presence in strategic industries with high profitability and long-term growth. It also strengthened the Group's position as a supplier of a wide variety of materials and modified the sales mix with new high-value-added solutions. Thanks to its production and distribution network, the Company was close to suppliers and customers, supporting the regionalization process and improving supply chains.\n\nDespite the unfavorable environment, Acerinox's strong cash generation and ability to make efficient use of capital allowed it to reduce its net financial debt and continue to generate value for shareholders. In 2023, the Group's shareholders benefited from a total dividend of EUR 150 million, consolidating the ongoing commitment to increasing the dividend per share that characterized previous years.\n\nImage /page/164/Picture/16 description: The image shows a close-up view of a concrete overpass. The overpass is supported by large, triangular concrete pillars. The pillars are connected to the overpass by black metal beams. The overpass is curved and has a metal railing along the edge. The sky is visible in the background.\n\n{165}------------------------------------------------\n\nImage /page/165/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, black letters. The word is enclosed within a blue circle that is open on the right side.\n\nThe most important figures for the year and the change with respect to the previous one are summarized in the following table:\n\n| EUR million                                                | 12M 2023   | 12M 2022     | % 12M 23 / 12M 22 |\n|------------------------------------------------------------|------------|--------------|-------------------|\n| Melting shop production<br>(thousands of metric tons)      | 1,946      | 2,190        | -11%              |\n| Net sales                                                  | 6,608      | 8,688        | -24%              |\n| <b>EBITDA</b>                                              | <b>703</b> | <b>1,276</b> | <b>-45%</b>       |\n| EBITDA margin                                              | 11%        | 15%          |                   |\n| Adjusted EBIT (1)                                          | 530        | 1,080        | -51%              |\n| Adjusted EBIT margin                                       | 8%         | 12%          |                   |\n| EBIT                                                       | 374        | 876          | -57%              |\n| EBIT margin                                                | 6%         | 10%          |                   |\n| Pre-tax income                                             | 355        | 831          | -57%              |\n| <b>Profit after tax and non-<br/>controlling interests</b> | <b>228</b> | <b>556</b>   | <b>-59%</b>       |\n| Operating cash flow                                        | 481        | 544          | -12%              |\n| Net financial debt                                         | 341        | 440          | -23%              |\n\n(1) Adjusted EBIT: excluding an impairment of the assets of Bahru Stainless amounting to EUR 204 million in 2022 and EUR 156 million in 2023.\n\nRevenue for the year totaled EUR 6,608 million, 24% lower than the previous year, marked by sharp declines in apparent demand and prices in the main markets in which the Group operates.\n\n### **\\_Geographic distribution of sales**\n\nImage /page/165/Figure/7 description: This image is a pie chart showing the distribution of something across different continents. Europe accounts for 39.4%, Asia accounts for 8.0%, America accounts for 47.2%, Africa accounts for 5.1%, and Oceania accounts for 0.3%.\n\n**The Group made a substantial effort to adapt to market conditions and ended the year with the lowest inventory levels in its history, allowing for a significant reduction in working capital**\n\nImage /page/165/Picture/9 description: The image shows a view looking up through a glass-walled structure, possibly a building or atrium. The glass panels are framed by a network of metal supports, creating a grid-like pattern against the bright blue sky visible through the glass. On the left side of the frame, there is a large, dark, cylindrical column, which adds depth and scale to the composition. In the background, a tall building with a grid of windows can be seen through the glass, suggesting an urban setting. The overall perspective is upward, emphasizing the height and architectural design of the structure.\n\n{166}------------------------------------------------\n\nImage /page/166/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, partially enclosed within a blue circle. The circle is incomplete, appearing behind the text.\n\n#### **\\_Quarterly EBITDA 2021, 2022 and 2023 - EUR million**\n\nImage /page/166/Figure/3 description: The image is a bar chart showing data for the years 2021, 2022, and 2023. The x-axis represents the quarters of each year (Q1, Q2, Q3, Q4), and the y-axis represents the values. The values for each quarter are as follows: Q1 2021: 161, Q2 2021: 217, Q3 2021: 293, Q4 2021: 318, Q1 2022: 422, Q2 2022: 523, Q3 2022: 241, Q4 2022: 90, Q1 2023: 226, Q2 2023: 236, Q3 2023: 146, Q4 2023: 96.\n\nDespite the drop in demand, the Group managed to obtain a commendable EBITDA of EUR 703 million, 45% lower than 2022, an all-time record for the Company in its more than 50-year history.\n\nThe EBITDA margin rose to 10.6%. This figure includes an inventory adjustment to net realizable value of EUR 65 million.\n\nDepreciation and amortization, at EUR 171 million, decreased by 11% compared to the previous year.\n\nOperating profit (EBIT) amounted to EUR 374 million. Excluding the impairment of Bahru Stainless (EUR 156 million), adjusted EBIT would be EUR 530 million. Profit after tax and non-controlling interests for 2023 amounted to EUR 228 million, 59% down on 2022.\n\n#### **\\_Profit after tax and non-controlling interests - EUR million**\n\nImage /page/166/Figure/9 description: The image is a bar graph showing values for the years 2019, 2020, 2021, 2022, and 2023. The value for 2019 is -60, for 2020 is 19, for 2021 is 572, for 2022 is 556, and for 2023 is 228.\n\n#### **Impairment of Bahru Stainless**\n\n Existing overcapacity in Asia, as well as the difficulty of turning a profit at the Group's factory in Malaysia, have led management to reflect strategically on the future of this plant, not ruling out the possibility of ceasing operations.\n\nAs a result, the maximum possible impairment of assets in Bahru Stainless was conducted, amounting to EUR 156 million. This did not result in a cash outflow.\n\n#### **Cash generation**\n\nOne of the Acerinox's strategic pillars is to maintain its financial strength, defined as sustainable cash generation over time to make efficient use of capital and generate value for the shareholder.\n\nCash generation continues to be one of the Group's priority objectives. In 2023, despite the lower result obtained, management to reduce Acerinox's working capital, mainly inventories, resulted in an operating cash flow of EUR 481 million (EUR 544 million in 2022).\n\nImage /page/166/Picture/16 description: The image shows a stack of metal pipes. The pipes are arranged in rows and columns, and they are all the same size and shape. The pipes are made of a shiny metal, and they have a smooth surface. The pipes are stacked close together, and they take up most of the frame. The background is blurred, which helps to focus attention on the pipes.\n\n{167}------------------------------------------------\n\nImage /page/167/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle that is open on the left side.\n\n### **\\_Cash flow - EUR million**\n\n|                               | 12M 2023 | 12M 2022 |\n|-------------------------------|----------|----------|\n| EBITDA                        | 703      | 1,276    |\n| Changes in working capital    | 79       | -479     |\n| Corporate income tax          | -233     | -238     |\n| Finance costs                 | -4       | -25      |\n| Other adjustments             | -65      | 10       |\n| OPERATING CASH FLOW           | 481      | 544      |\n| Payments due to investment    | -175     | -126     |\n| FREE CASH FLOW                | 307      | 419      |\n| Dividends and treasury shares | -152     | -336     |\n| CASH FLOW AFTER DIVIDENDS     | 155      | 83       |\n| Translation differences       | -56      | 55       |\n| Changes in net financial debt | 99       | 138      |\n\nIn a year of falling apparent consumption, with the price of nickel falling throughout the year and industry prices in Europe at historic lows, working capital was reduced by EUR 79 million.\n\nIncome tax payments amounted to EUR 233 million, due to the good result obtained by the Company in the previous year.\n\nAfter investment payments of EUR 175 million, the free cash flow generated amounted to EUR 307 million.\n\nShareholder remuneration for the year amounted to EUR 150 million in ordinary dividends, as a cash payment of EUR 0.60 per share was made, representing a payout of 66%.\n\nOn the other hand, the depreciation of the US dollar (-4% in the year) generated negative translation differences of EUR 56 million.\n\nImage /page/167/Picture/9 description: The image shows an architectural structure with a complex grid pattern. The grid is made up of many small, rectangular shapes that are arranged in a repeating pattern. The structure is made of metal and glass, and the grid pattern is visible through the glass. The overall effect is one of complexity and order.\n\n{168}------------------------------------------------\n\n## **\\_Statement of financial position and financing**\n\n### **ASSETS**\n\n| EUR million                    | 2023  | 2022  | Variation |\n|--------------------------------|-------|-------|-----------|\n| Non-current assets             | 1,777 | 1,902 | -7%       |\n| Current assets                 | 4,322 | 4,416 | -2%       |\n| Inventories                    | 1,861 | 2,156 | -14%      |\n| Receivables                    | 618   | 646   | -4%       |\n| Customers                      | 560   | 575   | -3%       |\n| Other receivables              | 58    | 71    | -18%      |\n| Cash                           | 1,794 | 1,548 | 16%       |\n| Other current financial assets | 50    | 67    | -25%      |\n| Total assets                   | 6,099 | 6,318 | -3%       |\n\n### **LIABILITIES**\n\n| EUR million                   | 2023  | 2022  | Variation |\n|-------------------------------|-------|-------|-----------|\n| Equity                        | 2,463 | 2,548 | -3%       |\n| Non-current liabilities       | 1,733 | 1,823 | -5%       |\n| Bank borrowings               | 1,291 | 1,394 | -7%       |\n| Other non-current liabilities | 442   | 429   | 3%        |\n| Current liabilities           | 1,902 | 1,947 | -2%       |\n| Bank borrowings               | 844   | 594   | 42%       |\n| Trade payables                | 787   | 1,017 | -23%      |\n| Other current liabilities     | 272   | 335   | -19%      |\n| Total Liabilities             | 6,099 | 6,318 | -3%       |\n\n### **\\_Net financial debt - EUR million**\n\nImage /page/168/Figure/7 description: The image is a bar graph comparing data from 2022 and 2023. The bar for 2022 is colored in light purple and has a value of 440. The bar for 2023 is colored in light gray and has a value of 341.\n\nImage /page/168/Picture/8 description: The image shows a stack of metal pipes. The pipes are arranged in a neat pile, and they appear to be made of a shiny metal. The background is blurred, but it looks like the pipes are in a warehouse or factory setting.\n\n{169}------------------------------------------------\n\nImage /page/169/Picture/1 description: The image contains the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned to the left of a blue circle. The circle is not fully visible, as it is partially cut off on the left side of the image.\n\nImage /page/169/Figure/3 description: This image shows a bar graph titled \"Liquidity\". The graph contains two categories: \"Available lines\" and \"Cash\". The value for \"Available lines\" is 1,794, and the value for \"Cash\" is 672.\n\n#### **\\_Liquidity - EUR million \\_Maturities of term debt - EUR million**\n\n## **EUR 2,135** million\n\nImage /page/169/Figure/6 description: This bar chart shows the term debt maturity from 2024 to 2030. The y-axis is labeled from 0 to 1,000. In 2024, the term debt maturity is 844. In 2025, the term debt maturity is 521. In 2026, the term debt maturity is 401. In 2027, the term debt maturity is 261. In 2028-2030, the term debt maturity is 108.\n\nNet financial debt at December 31, 2023 of EUR 341 million had fallen by EUR 99 million (EUR 440 million at December 31, 2022).\n\nAs in 2022, during 2023, the Group continued to actively manage its long-term loans and renew its credit lines to maintain the Group's liquidity. In this regard, the most relevant financial operations in 2023 were as follows:\n\n- Renewal of the syndicated factoring agreement in Spain until 2026, increasing the maximum amount to EUR 380 million and including a new assignor (VDM Metals International)\n- Renewal of the Columbus Borrowing Base Facility in South Africa until 2027 for a total maximum amount of ZAR 3.5 billion\n- Renewal and extension of credit facilities up to a total amount of EUR 301 million and US\\$135 million.\n- Signing of five new long-term loans in Spain with various financial institutions for a total amount of EUR 155 million.\n- 1.5 year extension of the loan signed by VDM for EUR 30 million.\n- Extension for an additional year (until 2025) of the bilateral financing lines signed with VDM with five financial institutions for a total amount of EUR 210 million.\n- Increase in Bahru Stainless' short-term financing facilities (credit lines and revolving credit facilities) to a maximum of US\\$145 million.\n\nAt year-end, the Group had sustainable outstanding debt totaling EUR 647.4 million, linking the cost of the credit to the evolution of the established indicators to be reviewed annually. At December 31, 2023, the majority of the Group's financing corresponded to term loans, of which almost 80% were due to mature in over a year. Overall, 70% of the loans and private placements were at fixed interest rates (these figures include loans closed at floating interest rates but hedged with an interest rate derivative).\n\nAs of December 31, 2023, the Acerinox Group had liquidity amounting to EUR 2,465 million. Of this amount, EUR 1,794 million corresponded to cash and short-term deposits and EUR 672 million to available financing at various Group subsidiaries.\n\n{170}------------------------------------------------\n\nImage /page/170/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open on the left side, and the text is aligned to the left within the circle's bounds. The color of the text is also blue, matching the color of the circle.\n\n#### **Financial ratios**\n\nThe net financial debt/EBITDA ratio was 0.49x (0.35x in 2022), demonstrating our good financial situation.\n\nThe gearing ratio stood at 14%, a 25-year low.\n\nReturn on capital employed (ROCE) was 13.34% in 2023 (29.31% in 2022). Adjusted ROCE (excluding the impairment of Bahru Stainless) was 17.9%, exceeding the Group's target of 15%.\n\n#### **\\_Net financial debt to EBITDA - No. of times**\n\nImage /page/170/Figure/7 description: The image is a bar chart comparing values from 2019 to 2023. In 2019 the value is 1.36, in 2020 the value is 2.01, in 2021 the value is 0.58, in 2022 the value is 0.35, and in 2023 the value is 0.49.\n\nImage /page/170/Picture/8 description: A low-angle shot captures a section of a modern bridge against a clear, vibrant blue sky. The bridge's design features a tall, white, rectangular pillar that serves as a central support. From this pillar, a series of white cables extend outwards, creating a fan-like pattern. These cables are evenly spaced and run diagonally across the frame, adding a sense of depth and dimension to the image. The pillar itself has a textured surface, with visible seams and indentations that suggest a modular construction. The bright sunlight illuminates the structure, casting subtle shadows that accentuate its form. The overall composition is clean and minimalist, emphasizing the bridge's architectural design and the contrast between the white structure and the blue sky.\n\n#### **ROE in 2023 stood at 9.3% while ROCE was 13.3%**\n\nImage /page/170/Figure/10 description: This image contains two bar charts, one labeled \"\\_ROE - %\" and the other labeled \"\\_ROCE - %\". The \"\\_ROE - %\" chart shows the following data: in 2019, the value is -3.1%; in 2020, the value is 3.0%; in 2021, the value is 25.8%; in 2022, the value is 21.8%; and in 2023, the value is 9.3%. The \"\\_ROCE - %\" chart shows a value of 0.x in 2020.\n\nROCE - %\n\nImage /page/170/Figure/12 description: The image is a bar graph comparing percentages across the years 2019, 2020, 2021, 2022, and 2023. In 2019, the percentage is 0.9%. In 2020, the percentage is 6.8%. In 2021, the percentage is 29.0%. In 2022, the percentage is 29.3%. In 2023, the percentage is 13.3%.\n\n{171}------------------------------------------------\n\n#### **Average period of payment to suppliers**\n\nWith regard to the average payment period, Law 18/2022 of September 29 on the establishment and growth of companies amended the related law, in particular the additional provision 3, which establishes an information requirement and obliges all listed companies to explicitly indicate in their Annual Accounts the average payment period to suppliers, the volume of money and the number of invoices paid in a period lower than the maximum established in the regulations on late payments, as well as the percentage of these invoices in the total number of invoices and in the total amount of money paid to their suppliers. The Group has taken this amendment into account.\n\nThe average period of payment to suppliers of the Spanish companies that form part of the Acerinox Group, after deducting payments made to Group companies, is as follows:\n\n|                                        | 2023      | 2022      |\n|----------------------------------------|-----------|-----------|\n|                                        | Days      | Days      |\n| Average period of payment to suppliers | 64 days   | 63 days   |\n| Ratio of operations settled            | 62 days   | 62 days   |\n| Ratio of transactions pending payment  | 81 days   | 80 days   |\n|                                        | Amount    | Amount    |\n| Total payments made                    | 2,363,976 | 2,384,319 |\n| Total outstanding payments             | 189,493   | 189,759   |\n\nThe table includes payments made to any supplier, whether domestic or foreign, and excludes Group companies.\n\nAs regards the new mandatory disclosures for Spanish companies belonging to the group, the situation is as follows:\n\n|                                                                                                                                            | 2023      | 2022      |\n|--------------------------------------------------------------------------------------------------------------------------------------------|-----------|-----------|\n| a) Monetary volume of invoices paid within a period equal<br>to or less than the maximum established in the regulations<br>on late payment | 1,114,046 | 1,129,490 |\n| Percentage share of total number of invoices of payments<br>to its suppliers                                                               | 47%       | 47%       |\n| b) Number of invoices paid within a period equal to or less<br>than the maximum period established in the late payment<br>regulations      | 23,427    | 22,172    |\n| Percentage share of total monetary payments to its<br>suppliers                                                                            | 41%       | 40%       |\n\nImage /page/171/Picture/8 description: The image shows a low-angle view of two modern buildings connected by a skybridge. The buildings are primarily made of glass and steel, with a grid-like pattern of windows. The skybridge is also made of glass and steel, and it appears to be suspended between the two buildings. The sky is visible in the background, and it is a light blue color.\n\n{172}------------------------------------------------\n\nImage /page/172/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The word is in a darker color, possibly black or a dark shade of blue, which contrasts with the white background. The blue circle is incomplete, forming an arc around the word. The overall design is simple and corporate.\n\n#### **\\_Stainless steel division results**\n\n| EUR million                                           | 12M 2023 | 12M 2022 | % 12M 23 / 12M 22 |\n|-------------------------------------------------------|----------|----------|-------------------|\n| Melting shop production<br>(thousands of metric tons) | 1,869    | 2,108    | -11%              |\n| Net sales                                             | 5,195    | 7,426    | -30%              |\n| EBITDA                                                | 533      | 1,151    | -54%              |\n| EBITDA margin                                         | 10%      | 16%      |                   |\n| Depreciation and<br>amortization                      | -138     | -161     | -14%              |\n| Adjusted EBIT*                                        | 393      | 987      | -60%              |\n| Adjusted EBIT margin                                  | 8%       | 13%      |                   |\n| EBIT                                                  | 237      | 783      | -70%              |\n| EBIT margin                                           | 5%       | 11%      |                   |\n| Operating cash flow<br>(before investments)           | 475      | 648      | -27%              |\n\n\\*Includes the impairment of assets at Bahru Stainless amounting to EUR 204 million in 2022 and EUR 160 million in 2023\n\nRevenue was down 30% compared to 2022 due to lower sales and price drops in all markets.\n\nEBITDA amounted to EUR 533 million, 54% down on 2022. This figure includes an adjustment of inventories to net realizable value of EUR 49 million.\n\nOperating cash flow totaling EUR 475 million was generated owing to the EUR 206 million decrease in working capital.\n\n#### **\\_Cash flow - EUR million**\n\n| EUR million                | 12M 2023 | 12M 2022 |\n|----------------------------|----------|----------|\n| EBITDA                     | 533      | 1,151    |\n| Changes in working capital | 206      | -247     |\n| Corporate income tax       | -230     | -233     |\n| Finance costs              | 17       | -14      |\n| Other adjustments          | -50      | -8       |\n| OPERATING CASH FLOW        | 475      | 648      |\n\nImage /page/172/Picture/10 description: The image shows a close-up view of a white metal structure against a blue sky with clouds. The structure appears to be part of a building or bridge, with a repeating pattern of diagonal and horizontal beams connected by bolts and fasteners. The metal is painted white, and the sky is visible through the gaps in the structure.\n\n{173}------------------------------------------------\n\nImage /page/173/Picture/1 description: The image shows the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle that is not fully closed, creating a crescent shape around the text. The background is white.\n\n#### **\\_High-performance alloys division results**\n\nThe alloys division exploited the favorable market momentum with a sound management of raw material purchases, the backlog and product mix, which led VDM to achieve the best results in its history, surpassing the record achieved in 2022.\n\n| EUR million                                           | 12M 2023 | 12M 2022 | % 12M 23 / 12M 22 |\n|-------------------------------------------------------|----------|----------|-------------------|\n| Melting shop production<br>(thousands of metric tons) | 76       | 82       | -7%               |\n| Net sales                                             | 1,437    | 1,262    | 14%               |\n| EBITDA                                                | 175      | 125      | 40%               |\n| EBITDA margin                                         | 12%      | 10%      |                   |\n| Depreciation and<br>amortization                      | -24      | -24      | 1%                |\n| EBIT                                                  | 151      | 102      | 49%               |\n| EBIT margin                                           | 11%      | 8%       |                   |\n| Operating cash flow<br>(before investments)           | 7        | -104     |                   |\n\nHigh-performance alloys revenue reflected the favorable market momentum with 14% growth compared to 2022.\n\nEBITDA generated—EUR 175 million—was 40% higher than in the previous year, setting a new record. At year-end, an inventory adjustment to net realizable value of EUR 16 million was carried out.\n\nMeanwhile, operating cash flow was EUR 6.5 million, due to an increase in working capital of EUR 126 million as a result of good activity.\n\n#### **\\_Cash flow - EUR million**\n\n| EUR million                | 12M 2023 | 12M 2022 |\n|----------------------------|----------|----------|\n| EBITDA                     | 175      | 125      |\n| Changes in working capital | -126     | -232     |\n| Corporate income tax       | -3       | -5       |\n| Finance costs              | -25      | -11      |\n| Other adjustments          | -14      | 18       |\n| OPERATING CASH FLOW        | 7        | -104     |\n\n{174}------------------------------------------------\n\nImage /page/174/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right, giving it a crescent shape.\n\n## **4.3 Excellence 360º Plan**\n\nIn 2023, the Group advanced in the deployment of the Excellence 360º Plan, featuring digital transformation as the driving force to gather and direct the Group's strategies until they are aligned with its production requirements, thus maximizing business opportunities.\n\nImage /page/174/Picture/4 description: The image shows a diagram with the word \"Excellence\" in the center, surrounded by a circular arrow with the number \"360\" inside. The diagram is divided into four sections: \"Production\", \"Supply chain\", \"Raw materials\", and \"Commercial\". The \"Production\" section lists \"Quality\", \"Maintenance\", \"Productivity\", \"Yield\", and \"Production materials\". The \"Supply chain\" section lists \"Logistics\" and \"On time in full delivery\". The \"Raw materials\" section lists \"Mix optimization\" and \"Purchasing planning\". The \"Commercial\" section lists \"Sales increase\" and \"Sales management\".\n\nThe Excellence 360º Plan made it possible to successfully tackle the uncertain environment that characterized the steel industry in 2023, as well as the weakness of the industrial market in the face of constantly rising energy prices and supply failures. These factors were compounded by the unstable geopolitical situation and the resurgence of armed conflicts. Production cuts resulting from this global scenario prevented value chain optimization, as in other periods of stability, with an average savings during the life of the plan of close to 40%.\n\nIn this area, achievements in areas such as the optimization of raw material purchases and the improvement in melting shop yields stand out, with final results above the targets set, as does progress in the reduction of material sent to landfill, and the increase in line processing capacity.\n\nThe success of the excellence plans implemented over the last 15 years and the know-how acquired by Acerinox during their execution planted the seed for the design of the new Beyond Excellence Plan.\n\n### **Digital Transformation Plan**\n\nThe Digital Transformation Plan, one of the main enablers for pushing forward Excellence, has turned Acerinox into one of the major companies in Industry 4.0.\n\nIts three core programs of recent years - automation and robotization, integrated planning, and data analytics - have been complemented by the addition of a fourth: traceability. The combination of their advances makes the Group not only a Smart Factory, but a Smart Company, building a process improvement strategy with the help of the most innovative technologies, such as AI and digital twins.\n\nDuring 2023, the Group launched nearly 40 initiatives along the value chain, implementing them at its main facilities.\n\nSpecifically, this activity was focused on improvements to the advanced analytics program, with promising projects such as the following:\n\n- Predictive maintenance to ensure constant monitoring of critical assets.\n- Predictive quality, which allows surface defects in cold rolling production to be reduced. A global project launched at all the stainless steel division's factories.\n- Real-time statistical monitoring of the hot rolling process to reduce its variability. A pilot project deployed in Google Cloud that, in 2024, will be extended to other production areas.\n- Melting shop digital twin technology to help optimize slab costs.\n- Scrap metal characterization using AI for image recognition.\n- Progress in the project to promote product traceability.\n- At flat product factories, progress was made in the deployment of sequencers to optimize production campaigns.\n\n{175}------------------------------------------------\n\nAcerinox has joined the Association to Promote the Data Economy and Artificial Intelligence in Spanish Industry, IndesIA, as it works to modernize and digitalize Spanish companies. Acerinox will be an active part of the IndesIA ecosystem, enriching its teams, learning, and benchmarking, using the different working groups to develop products and projects while contributing its experience in these fields.\n\nImage /page/175/Picture/2 description: The image contains the logos of ACERINOX and INDESIA, along with text. The ACERINOX logo is a blue circle with the company name in white. The INDESIA logo is in black and orange. Below the logos is the text \"Consorcio Nacional Industrial para el Impulso de la Economia del Dato y de la Inteligencia Artificial\" in black.\n\nImage /page/175/Picture/3 description: The image shows a low-angle view of a bridge against a clear sky. The bridge is constructed with steel beams and concrete supports. The steel beams are painted in a light blue color, while the concrete supports are in a light beige color. The sky is a pale blue color. The bridge is angled from the top left to the bottom right of the image.\n\n**Digitalization and innovation**\n\n**EUR 17.6** million digitalization and innovation investments and expenses\n\n## **4.4 Acerinox shares**\n\nAcerinox's share capital on December 31, 2023, after the redemption of 10,388,974 shares approved at the Annual Shareholders' Meeting on May 23, 2023, was set at EUR 62,333,842.75. It is represented by 249,335,371 shares, with a par value of EUR 0.25 per share.\n\nAll shares are admitted to official trading on the Madrid and Barcelona stock exchanges and are traded on the continuous market.\n\nAt December 31, 2023, Acerinox had a total of 44 thousand shareholders:\n\n|                                                         | No. of shares | % capital |\n|---------------------------------------------------------|---------------|-----------|\n| Corporación Financiera Alba SA                          | 48,101,807    | 19.29%    |\n| Danimar 1990 SL                                         | 14,224,988    | 5.71%     |\n| Industrial Development Corporation of South Africa LTDA | 8,809,294     | 3.53%     |\n| Other investors                                         | 178,199,282   | 71.47%    |\n\n**Domestic investors represent 58% of share capital; foreign investors represent 42%**\n\nImage /page/175/Picture/12 description: The image shows a low-angle view of a modern building with glass windows. The windows reflect the sky and clouds, creating a sense of depth and perspective. The building appears to be tall and imposing, with clean lines and a sleek design. The overall impression is one of modernity and sophistication.\n\n{176}------------------------------------------------\n\nImage /page/176/Picture/1 description: The image shows the Acerinox logo. The logo consists of a blue circle with the word \"ACERINOX\" written in blue, bold letters inside the circle.\n\n#### **Analyst and investor relations**\n\nAcerinox guarantees the market equal access to information through all communication channels. Our website (acerinox.com) plays a very important role in applying this transparent communication policy and serves as a guarantee of access to information.\n\nAny minority shareholder may contact the shareholder's office to make any request for information on Acerinox's performance.\n\nAcerinox must maintain fluid and efficient communication with the financial markets, shareholders and investors, which is why the investor relations team provides intensive, proactive service to the financial community. In 2023 Acerinox attended 25 events organized by brokers (conferences and roadshows), and held more than 223 direct meetings (62% individual meetings and the rest in groups), in which more than 130 entities were assisted. In addition to these figures, a hundred or so individualized calls with analysts and investors were requested throughout the year. Acerinox also complements market information with quarterly open-access conference calls that can be joined by phone and/or online. During 2023, an average of 147 participants were recorded at the results presentations.\n\nAmong the most significant issues discussed were interest in the evolution of markets by region, possible corporate operations (mergers and acquisitions), the decarbonization plan, and capital allocation policies.\n\n#### **Capital Markets Day**\n\nOn November 29 and 30, Acerinox celebrated Capital Markets Day in Germany.\n\nThis provided a unique opportunity to showcase the high-performance alloys business and see first-hand the foresight of the acquisition of this division, VDM Metals.\n\nAcerinox executives updated the Company's situation and explained its future mission: to be a world leader in the manufacture of stainless steel and high-performance alloys by creating the most efficient materials for the future, maximizing the benefits for society and creating value for stakeholders.\n\nAmong the topics discussed, Acerinox's CEO introduced a new path for a new world and presented the Group as a creator of solutions for each application, thus contributing to the progress and quality of life of a sustainable society. In addition, the following presentations were given:\n\n- \"Facing tomorrow's challenges,\" by our strategy director, Antonio Gayo.\n- \"Deep dive into high-performance alloys,\" by VDM Metals CEO Niclas Müller.\n- \"Stainless steel and HPAs: Materials of the future,\" by Senior VP R&D VDM Metals International Helena Alves.\n- \"Achieving excellence in all plants,\" by Acerinox COO Hans Helmrich.\n- \"Sustainability: It's our nature,\" by our indirect purchasing director Deniza Puce and our sustainability director Carlos Ruiz.\n- \"From global to local,\" by the head of Business Intelligence, Manuel Landeta\n- \"Acerinox: A sustainable investment,\" by the Group's CFO, Miguel Ferrandis.\n\nImage /page/176/Picture/19 description: A conference room is shown with a stage and podium. The stage has a large screen with the word \"ACERINOX\" on it. There are water bottles and flowers on the table in front of the stage. The room is lit with blue lights.\n\nCapital Markets Day included a guided tour of the Unna (Germany) factory facilities.\n\nThis successful event enabled 90 attendees to meet in person and more than 500 participants to tune in virtually.\n\nImage /page/176/Figure/22 description: The image shows a close-up of several parallel, angled, metallic or gray-toned bars or panels. The bars are arranged diagonally across the frame, with alternating light and dark shades creating a sense of depth and texture. The lighting appears to be diffused, highlighting the smooth surfaces of the bars. A small portion of a solid purple rectangle is visible in the lower-left corner of the image.\n\n{177}------------------------------------------------\n\nImage /page/177/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, leaving a small gap at the top right. The word \"ACERINOX\" is in white, contrasting with the blue background of the circle.\n\n#### **Share price performance**\n\nEvolution in the stock markets in 2023 was marked by different milestones in each of the regions where episodes of high volatility took place:\n\n- The uncertainty generated throughout the year by the complexity of the geopolitical environment and the conflict in Ukraine has been compounded by the situation in the Middle East.\n- The banking crisis in March (Silicon Valley Bank) shook the US financial system and had repercussions in Europe, with the collapse of internationally recognized institutions (Credit Suisse).\n- The rate hikes that began in 2022 came to an end in the middle of the year. The last Fed rate increase took place in July, reaching its highest level in 22 years (5.25%-5.5%). In Europe, increases slowed in September, reaching their highest level since 2001 (4.5%).\n\nDespite geopolitical uncertainty and adverse circumstances, most stock exchanges ended the year with gains.\n\nPerformance of the world's main indexes in 2023:\n\n|                  | 2023   |\n|------------------|--------|\n| IBEX 35          | 22.8%  |\n| Industrial DJ    | 14.0%  |\n| Nikkei           | 28.2%  |\n| France CAC 40    | 17.0%  |\n| Euro STOXX 50    | 19.2%  |\n| Germany DAX      | 20.3%  |\n| Ftse MIB         | 28.0%  |\n| CSI 300          | -11.4% |\n| S&P 100          | 31.0%  |\n| NASDAQ-100 Index | 54.0%  |\n\nImage /page/177/Picture/10 description: The image shows a low-angle view of several modern skyscrapers against a light blue sky. The buildings are primarily constructed of glass and steel, with a grid-like pattern of windows visible on their facades. Some windows are illuminated, suggesting it is either dusk or dawn. The composition emphasizes the height and scale of the buildings, creating a sense of urban grandeur.\n\nSource: Bloomberg\n\nThe Acerinox share reached a high of EUR 10.7/share on December 28 and a low of EUR 8.8/share on October 23. **Stock market evolution of Acerinox and the IBEX 35**\n\nImage /page/177/Figure/13 description: The image shows a line graph comparing the performance of ACERINOX and IBEX35. The y-axis represents percentage change, ranging from -10% to 30%. The x-axis represents time. The ACERINOX line, in blue, starts at 0%, fluctuates, and ends at approximately +15%. The IBEX35 line, in orange, also starts at 0%, fluctuates, and ends at approximately +23%. A horizontal line at 0% serves as a reference point. The graph indicates that both ACERINOX and IBEX35 have experienced positive growth over the period depicted, with IBEX35 outperforming ACERINOX.\n\nDaily percentage data, 2023. Source: Bloomberg\n\n{178}------------------------------------------------\n\nImage /page/178/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, set inside a blue circle that is open on the left side.\n\n#### **Acerinox rose +15% in 2023, while the IBEX35 went up +23%**\n\nAcerinox's share price performance in 2023, although below the IBEX 35, outstripped its competitors. In a complex year, with a decline in apparent consumption in the US and Europe, the Group was able to generate very positive results thanks to its strategy of offering higher-value-added solutions and the strength of the US plant.\n\n#### **Stock market evolution of Acerinox and its European competitors**\n\nDaily percentage data, 2023. Source: Bloomberg\n\nImage /page/178/Figure/6 description: This image is a line graph comparing the performance of ACERINOX against Competitor 1 and Competitor 2. The y-axis represents percentage values ranging from -30% to 30%, while the x-axis represents time. The orange line represents ACERINOX, the blue line represents Competitor 1, and the gray line represents Competitor 2. The graph shows the fluctuations in performance of each entity over time.\n\nAnalysts' recommendations regarding Acerinox did not change significantly during the year. 85% issued a \"buy\" recommendation at the beginning of the year, as did 81% at the close; 14% of analysts covering the company advised holding and 5% selling.\n\nImage /page/178/Figure/8 description: The image is a horizontal bar chart titled \"Analysts' recommendations\". The chart shows the percentage of analysts who recommend to buy, hold, or sell a stock. 81% of analysts recommend to buy, 14% recommend to hold, and 5% recommend to sell.\n\nThe average target price of analysts following Acerinox was EUR 13.3/share, a potential increase of 25% from EUR 10.7/share at year-end 2023.\n\nIn 2023, Acerinox shares traded on the 255 days the continuous market was in operation. The total number of shares traded amounted to 229,197,103, with average daily trading of 898,812 shares.\n\nIn 2023, trading totaled EUR 2,229,325,733, entailing a daily average of EUR 8,742,454.\n\nImage /page/178/Figure/12 description: The image is a combination bar and line chart comparing the number of shares in millions to cash in millions of euros from 2013 to 2023. The x-axis shows the years 2013, 2015, 2017, 2019, 2021, and 2023. The left y-axis shows the number of shares in millions from 0 to 600. The right y-axis shows the cash in millions of euros from 0 to 6,300. The number of shares in millions for each year is as follows: 2013 is approximately 280, 2015 is approximately 550, 2017 is approximately 400, 2019 is approximately 280, 2021 is approximately 330, and 2023 is approximately 250. The cash in millions of euros for each year is as follows: 2013 is approximately 2,700, 2015 is approximately 6,000, 2017 is approximately 4,800, 2019 is approximately 2,700, 2021 is approximately 3,700, and 2023 is approximately 2,800.\n\n{188}------------------------------------------------\n\nImage /page/188/Figure/1 description: The image is a scatter plot with the x-axis labeled \"Significance to stakeholders\" and the y-axis labeled \"Significance of impact on Acerinox\". Both axes range from 5.0 to 10.0. The plot is divided into three regions: \"Moderate\", \"High\", and \"Critical\", with \"Moderate\" being the lowest risk and \"Critical\" being the highest. There are 12 data points plotted on the graph, labeled 1 through 12. Data points 1, 2, 3, and 4 are in the \"Critical\" region. Data points 5, 6, 7, and 8 are in the \"High\" region. Data points 9, 10, 11, and 12 are in the \"Moderate\" region.\n\n- 1. Health and safety\n- 2. Circular economy and waste management\n- 3. Efficient financial management\n- 4. Decarbonization strategy\n- 5. Leadership, transparency and ethical behavior\n- 6. Supply chain management\n- 7. Environmental risk management\n- 8. Sustainable and safe products\n- 9. Talent management: diversity, equality, and inclusion\n- 10. Digitalization and new technologies\n- 11. Positive working environment Training and professional development\n- 12. Social contribution\n\n**Acerinox is conducting a double materiality analysis in order to identify what is relevant to the company, as well as the Group's material impact on people and the planet. The study is preceded by an analysis of the global context and industry trends.**\n\nImage /page/188/Picture/15 description: This image shows a long bridge over water. The bridge is supported by tall concrete pillars that are evenly spaced along its length. The bridge has two tall towers in the middle, with cables extending from the towers to the bridge deck. The water is calm and reflects the sky, which is overcast. The bridge appears to be a major transportation route, as there are cars visible on the bridge deck.\n\n{189}------------------------------------------------\n\nImage /page/189/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters. The text is partially enclosed within a blue circle.\n\n### **Stakeholder management**\n\n#### **GRI 2-29**\n\nThe Acerinox Group is aware of the importance of maintaining responsible relationships with stakeholders in order to create shared value. Therefore, in 2022, the company approved the stakeholder management model; its main objective is to prioritize the aforementioned groups, as well as to identify their needs and expectations around the company's performance.\n\nAcerinox considers the following six stakeholders to be priorities:\n\nImage /page/189/Figure/6 description: The image shows a list of stakeholders. The list includes employees, shareholders and investors, suppliers, local communities, customers, public agencies, and civil society. Below the list is the text 'Communication and continuous dialogue'.\n\nCommunication and continuous dialogue are the basis of the relationship Acerinox maintains with its stakeholders. The Company offers opportunities for constant dialogue to build trusting, stable, and lasting relationships. It also regularly evaluates stakeholder satisfaction, making any necessary improvements to its commitments in order to meet their needs.\n\nImage /page/189/Picture/8 description: A low-angle shot captures a modern building with a glass facade, partially obscured by lush green trees. The building's design features a grid-like pattern of windows, reflecting the sky and clouds, creating a sense of transparency and openness. The trees, with their vibrant green foliage, add a natural element to the urban landscape, softening the building's sharp lines and creating a harmonious contrast between nature and architecture. The overall composition of the image is visually appealing, with the building and trees complementing each other in terms of color, texture, and form.\n\n#### **Positive Impact 360º plan**\n\nThe Group reviewed its sustainability management model in order to foster continuous improvement in all material issues. To this end, the **Positive Impact 360º Sustainability Plan** is implemented through annual programs, the most relevant actions of which are explained in the following sections of this report.\n\nThe Sustainability Plan is structured around five strategic pillars:\n\n| Ethical,<br>accountable and<br>transparent                                                                                                                                                                                                               | Eco-efficiency and<br>climate change<br>mitigation                                                                                                                                                                                            | Circular economy<br>and sustainable<br>products                                                                                                  | Committed team,<br>culture, diversity, and<br>safety                                                                                                                                                                                              | Supply chain and<br>community impact                                                                                                                             |\n|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Promote the<br>development of a<br>responsible and<br>transparent<br>management model<br>and solid corporate<br>governance, with a<br>sustainable and<br>long-term vision,<br>which identifies and<br>proposes responses<br>to new ESG<br>challenges and | Establish<br>commitments and<br>objectives in climate<br>change mitigation<br>and develop an<br>action plan to<br>achieve them that<br>includes energy<br>efficiency measures,<br>which are the<br>bedrock of the<br>climate change<br>model. | Integrate circular<br>economy processes<br>into all operations by<br>driving the<br>development of<br>sustainable and low-<br>emission products. | Strengthen the<br>alignment of people<br>with the values of<br>Acerinox, boosting their<br>commitment to<br>sustainability,<br>promoting equality, the<br>development of talent<br>and the improvement<br>of the climate,<br>guaranteeing safety, | Manage the supply<br>chain responsibly and<br>be a company<br>recognized for its<br>commitment to local<br>society and creating<br>positive community<br>impact. |\n\n{190}------------------------------------------------\n\nImage /page/190/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a metallic blue color. The word is positioned inside a partial circle, also in metallic blue, which curves around the right side of the word. The background is white.\n\n#### **Sustainability objectives**\n\n#### **GRI 305-5**\n\nIn 2020 Acerinox set sustainable goals linked to its environmental, social and corporate governance performance, aligned with Positive Impact 360º, its Sustainability Master Plan, and the main international standards (Paris Agreement, Sustainable Development Goals, etc.).\n\nImage /page/190/Figure/5 description: The image shows a graphic with a series of interconnected circles and curved lines, each associated with a sustainability or social responsibility metric. Starting from the left, the first circle is connected to the text \"20% reduction in CO2 emissions intensity\". The next circle is connected to the text \"7.5% Reduction in energy intensity\". The third circle is connected to the text \"20% Reduction in specific water withdrawal\". The fourth circle is connected to the text \"90% Recycled Material\". The fifth circle is connected to the text \"10% Annual reduction in LTIFR\". The sixth circle is connected to the text \"15% Female employees\".\n\nImage /page/190/Picture/6 description: The image shows a low-angle view of a suspension bridge. The bridge's deck is visible, along with the suspension cables and one of the towers. The sky is overcast, creating a soft, diffused light. The bridge is light gray.\n\n{191}------------------------------------------------\n\nImage /page/191/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, partially obscured by a blue circle. The circle is positioned behind the text, with only the right half visible. The text is white, and the circle is a deep blue color.\n\nProgress in these objectives is as follows:\n\n| Pillar                     | 2030 targets**                                                                 | Degree of progress | 2023 vs 2022 |\n|----------------------------|--------------------------------------------------------------------------------|--------------------|--------------|\n| Image: hand with leaves    | 20% reduction in CO2 emissions intensity<br>(Scopes 1 and 2) compared to 2015. | -11% vs 2015       | -3%          |\n| Image: hand with leaves    | 7.5% reduction in energy intensity<br>compared to 2015                         | 8% vs 2015         | 6%           |\n| Image: hand with leaves    | 20% reduction in water withdrawal<br>intensity compared to 2015                | -18% vs 2015       | -3%          |\n| Image: waste recycle       | 90% waste recycled                                                             | 80%                | 1%           |\n| Image: document with graph | 10% annual reduction in LTIFR                                                  | –                  | -24%         |\n| Image: document with graph | 15% women at the organization                                                  | 13.28%             | 0.37%*       |\n\n\\*Increase in the percentage of women on staff compared to the previous year.\n\n\\*\\*Carbon intensity, energy intensity, water withdrawal intensity and % waste recycled targets were set for the stainless steel division only. In 2024, they will be extended to the Group level.\n\nThe targets are monitored monthly by the sustainability managers at each plant and reviewed by the corporate sustainability team. The evolution of the targets is also reviewed quarterly by the Sustainability Committee, and the necessary measures are taken in each case\n\nThe company has met the targets set for 2023 in accordance with the path set out for the year 2030. It is worth highlighting the effort made in terms of emissions thanks to our commitment to renewable energies, as well as the LTIFR reduction target, which has fallen by 24% in just one year. On the other hand, the energy intensity target was not met due to the drop in production, which had a significant impact on plant efficiency. Acerinox has also decided to extend the 2030 targets established at the stainless division level to the entire Group in 2024, applying similar annual reduction levels to the high-performance-alloys division.\n\nAchievement of some of these sustainability objectives is linked to the variable remuneration of employees, forming part of the short- and long-term incentives of the Group's c-suite and being rolled out across the organization's different areas. The specific objectives linked to variable remuneration for 2024, in line with the 2030 Group roadmap, are as follows:\n\n| Pillar                   | 2024 targets                                            | 2024 vs 2023 |\n|--------------------------|---------------------------------------------------------|--------------|\n| Image: seedling          | Reduction in CO2 emissions intensity (Scopes 1 and 2)   | -1.54%       |\n| Image: recycle           | Increase in recycled waste                              | 4.03%        |\n| Image: chart with people | TIR reduction                                           | -26%         |\n| Image: group of people   | Increase in the percentage of women in the organization | 0.25%*       |\n\n\\*Increase in the percentage of women on staff compared to the previous year\n\n{192}------------------------------------------------\n\nImage /page/192/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The word is positioned to the left of a blue circle that is not fully closed. The circle appears to be behind the text, partially obscuring the letters.\n\n### **Contribution to the 2030 Agenda**\n\nThe 2030 Agenda is a universal call for action by governments, institutions and businesses to end poverty, protect the planet, and improve the lives and future of people through the achievement of 17 Sustainable Development Goals by 2030.\n\nThe private sector plays a key role in this roadmap, making it an opportunity to align business objectives with sustainability. In this respect, Acerinox is firmly committed to helping achieve these global objectives through the manufacture of infinitely recyclable products, such as stainless steel, and through a responsible management model that contributes to protecting the planet, reducing inequality and developing a more prosperous and sustainable world.\n\nThe Group identified the Sustainable Development Goals to which it can make the biggest contribution.\n\nOn September 25, we raised the SDG flag for a more sustainable future to mark the 8th anniversary of the 2030 Agenda. This initiative of the UN Global Compact aims to unite companies, individuals and institutions under the symbolism of a single flag.\n\n#### **\\_Contribution to the SDGs**\n\n| SDGs         | Contribution of stainless steel                                                                                                                                                | Acerinox's 2030 objectives                                                                                                                                                                                                                                                                                       |\n|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Image: SDG 3 | Stainless steel is a hygienic and clean material<br>that is fundamental to development of the food<br>industry and other sectors, such as pharma,<br>medicine, and transport.  | Objective of reducing accidents, setting out<br>specific initiatives to achieve this goal. (For more<br>information, see the Health and safety section in<br>5.4 Committed team, culture, diversity, and<br>safety.)                                                                                             |\n| Image: SDG 5 | The stainless steel industry traditionally has a<br>low representation of women but is working hard<br>to reduce this gender gap.                                              | Objective of having 15% women by 2030, setting<br>out specific initiatives to achieve this goal. (For<br>more information, see the Equality, diversity,<br>and inclusion section in 5.4: Engaged team,<br>culture, diversity, and safety.)                                                                       |\n| Image: SDG 6 | Stainless steel is a hygienic and clean material<br>that is fundamental to development of water<br>pipes and treatment.                                                        | Objective of reducing specific water withdrawal<br>by 2030, setting out specific initiatives to<br>achieve this goal. (For more information, see the<br>Water stewardship section in 5.2 Eco-efficiency<br>and climate change mitigation.)                                                                       |\n| Image: SDG 8 | The stainless steel industry has a significant<br>impact on jobs and the economy, and is<br>fundamental to development of other sectors.                                       | Acerinox employs over 8,000 people and<br>generates an economic value of EUR 6,766<br>million in the form of salaries, taxes, payments<br>to suppliers, etc. (See 1.1 Value creation for<br>further information).                                                                                                |\n| Image: SDG 9 | Stainless steel is a material used in the<br>development of other industries, such as<br>transport, energy, petrochemicals, etc., and in<br>infrastructure, construction, etc. | Acerinox fosters innovation by making<br>investments that improve efficiency through<br>automation, new equipment, new methods, etc.,<br>and/or the development of new products,<br>incorporating sustainability criteria into the<br>investment decisions. (See 2.2 Strategic plan for<br>further information.) |\n\nImage /page/192/Picture/10 description: A group of people are standing on some stairs holding a banner that says \"TOGETHER FOR THE SUSTAINABLE DEVELOPMENT GOALS\".\n\n{193}------------------------------------------------\n\nImage /page/193/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned within a circular shape. The circular shape is formed by two concentric rings, with the word \"ACERINOX\" placed in the center. The logo has a blue color scheme.\n\nImage /page/193/Picture/2 description: The image shows the Sustainable Development Goal 12 icon, which represents \"Responsible Consumption and Production.\" The icon is set against an orange background. The number \"12\" is displayed prominently in white at the top left corner, followed by the text \"RESPONSIBLE CONSUMPTION AND PRODUCTION\" in smaller white font. Below the text, there is a white infinity symbol with an arrow indicating a circular flow, symbolizing the concept of a circular economy and sustainable resource management.\n\nrecyclable material. Its use in different sectors increases circularity, and contributes to a more sustainable economic model.\n\nStainless steel is a very long-lasting and infinitely Acerinox champions the efficient use of available resources and has set 2030 targets for reducing CO2 emission intensity, energy intensity, and specific water withdrawal, putting in place initiatives designed to achieve these goals. To increase circularity, it has also set a waste valorization objective. (See 5.2 Eco-efficiency and climate change mitigation and 5.3 Circular economy and sustainable products for further information.)\n\nImage /page/193/Picture/5 description: The image is a square with a green background. In the upper left corner is the number 13 in white. To the right of the number 13 is the text \"CLIMATE ACTION\" in white. Below the number and text is a white image of an eye. The iris of the eye is a globe.\n\nbasic sectors in the economy, such as transport, infrastructure, industry, etc., and other sectors that foster renewable energy, batteries, fuel cells, etc.\n\nStainless steel contributes to the development of Acerinox has set specific 2030 objectives to reduce its greenhouse gas emissions, such as carbon intensity, putting in place initiatives designed to achieve these goals. Moreover, to improve its adaptation to climate change, it has analyzed the physical and transition risks related to climate change. (See 5.2 Eco-efficiency and climate change mitigation for further information.)\n\nThe Group signed up to the 10 Principles of the United Nations Global Compact and incorporated them into its strategy. This is the framework for the 2030 Agenda that ensures the Company fulfills its basic responsibilities vis-à-vis people and the planet, paving the way for long-term success. This report lays out the most relevant aspects that generate sustainable development, in compliance with the commitment to release an annual Progress Report.\n\nImage /page/193/Picture/9 description: The image shows logos of organizations related to ESG ratings and memberships. On the left, under the title \"Participation in ESG ratings,\" are the logos of S&P Global, Ecovadis, MSCI ESG Ratings, Moody's Analytics, CDP Disclosure Insight Action, ISS ESG, and Morningstar Sustainalytics. On the right, under the title \"Memberships,\" are the logos of UNESID, UN Global Compact, Responsible Steel, EUROFER The European Steel Association, and Climate Action Data Provider Worldsteel.\n\n{194}------------------------------------------------\n\nImage /page/194/Picture/1 description: The image shows the text \"5.1. Ethical, responsible and transparent corporate governance\" in a purple font.\n\n## **Corporate governance**\n\n#### **Good governance practices**\n\n#### **GRI 2-18**\n\nAcerinox adopts best corporate practices in its operations, keeping it ahead of international standards.\n\nCreation and appointment of a lead independent director: George Donald Johnston was elected to this position following the retirement of the previous Chair and the appointment of Carlos Ortega Arias-Paz as new non-executive chairman of Acerinox. Although the chair is a non-executive position, it was decided to create this position because of the benefits it brings.\n\nWhen the Company increased the dividend per share to EUR 0.60, compared to EUR 0.50 in prior years, it also approved a new dividend policy. This explicit policy states the commitments undertaken vis-à-vis shareholders and provides much-needed predictability regarding expected returns in future years.\n\nThe board of directors carries out an annual evaluation of the board and its various committees in order to identify areas for improvement and to approve the measures needed to boost their performance. The resulting improvement plans are periodically monitored and analyzed halfway through and at the end of the year in question. Its usefulness is evidenced by the fact that the ratings improve year after year The 2023 assessment was conducted through external services.\n\nAt the request of the board of directors, the Company has strengthened the area of sustainability in recent years. First, the Sustainability Directorate was created and, subsequently, a specialized committee was set up under the board itself.\n\n## **Significant events after the reporting period**\n\n#### **Acerinox, S.A. closes an agreement to acquire the US company Haynes International**\n\nThe boards of directors of Acerinox, S.A. and Haynes International have agreed that Acerinox Group shall acquire 100% of Haynes International (Haynes), a company listed on the NYSE and headquartered in Indiana (United States) specializing in the special alloys industry.\n\n#### **Interim dividend**\n\nThe board of directors of Acerinox, S.A. held on December 20, 2023, decided to propose to the Annual Shareholders' Meeting a dividend of EUR 0.62 per share charged to 2023 results, of which EUR 0.31 were paid as an interim dividend on January 26, 2024. This dividend will be submitted for approval at the Annual Shareholders' Meeting to be held in 2024.\n\n#### **Acerinox Europa, S.A.U collective bargaining agreement**\n\nAcerinox Europa began the process of renewing the 4th Collective Bargaining Agreement in January 2023. The company is committed to changing its model at this plant in order to stop producing losses and to be able to tackle the strong competition in this market. This transformation will mean regaining productivity through greater staff flexibility and versatility.\n\nGiven this situation, after months of negotiations, a strike began on February 5 at the Campo de Gibraltar facility. The strike is ongoing as of the publication of these results, despite the fact that the company has always expressed its willingness to negotiate.\n\n{195}------------------------------------------------\n\n## **Ethics and compliance**\n\n**GRI 3-3 / 2-15 / 2-16 / 2-25 / 2-26 / 2-27 / 205-2**\n\n## **Ethics and compliance are key to the proper operation of Acerinox Group's business activity.**\n\n#### **\\_Relevant activities**\n\nImage /page/195/Picture/5 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or success. The person is depicted in a simple, linear style, and the podium has three levels, indicating first, second, and third place.\n\nImage /page/195/Picture/6 description: The image shows a winding path leading to a flag. The path is made up of several curves and turns, and it appears to be a route or journey towards a destination represented by the flag.\n\n| Milestones 2023                                                                                                                                                                                                                                     | Challenges 2024                                                                                                         |\n|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|\n| Favorable audit report for the Group's nine companies in<br>Spain to obtain UNE 19601 certification for criminal<br>compliance management systems.                                                                                                  | Complete the implementation process for the Crime<br>Prevention Program at all group companies.                         |\n| Specific training on money laundering, terrorism, criminal<br>groups, fraud, and punishable insolvency.                                                                                                                                             | Implement the Crime Prevention Program at VDM<br>companies.                                                             |\n| Modified the Group's whistleblowing channel per Law<br>2/2003, which transposes the Whistleblowing Directive<br>into Spanish law.                                                                                                                   | Complete the corporate regulation integration process at<br>all the Group's subsidiaries.                               |\n| Created a repository of all Group regulations, called<br>ACERINORM, available to all Group employees.                                                                                                                                               | Provide training in the prevention of harassment and<br>crimes related to the use of digital services and<br>resources. |\n| Reviewed and re-evaluated risks related to the following<br>crimes: harassment, hate speech, discovery and<br>disclosure of secrets, digital sabotage and damage,<br>intellectual and industrial property right infringements,<br>and tax offenses. | Progress in the implementation of the Human Rights due<br>diligence model.                                              |\n|                                                                                                                                                                                                                                                     | Implement smuggling prevention measures, social                                                                         |\n\nsecurity, foreign citizens' rights, investment fraud, and land and urban planning at non-Spanish companies.\n\nImage /page/195/Picture/9 description: The image shows a large stack of metal pipes. The pipes are all the same size and shape, and they are arranged in a haphazard way. The pipes are all silver in color, and they have a smooth, shiny surface. The background is dark and blurry, which helps to focus attention on the pipes.\n\n{196}------------------------------------------------\n\nImage /page/196/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned within a partial blue circle. The circle is open on the right side, creating a crescent shape that curves around the text.\n\n#### **Code of Conduct and Best Practices**\n\nThe current edition of the Group's Code of Conduct and Best Practices, approved by the board of directors in 2016 and accessible on the company website, provides a rule-based guide for professionals across Acerinox's various companies to determine the ethical commitments and responsibilities that should govern their activity at the company.\n\nThe basic principles of the Code of Conduct are implemented through internal policies and instructions. The Code of Conduct Monitoring Committee, which reports to the board of directors through the Audit Committee, supervises compliance with and internal dissemination of the code among employees, interprets it, provides a whistleblowing channel to gather information on compliance, and also controls and supervises the processing of each case and its resolution, in accordance with the internal regulations that regulate it.\n\nViolation of the Code of Conduct could result in disciplinary action, without prejudice to the administrative or criminal sanctions that may apply in accordance with applicable law.\n\n**The Group also has a specific code of conduct for business partners, likewise accessible on the company website, which establishes the duties and commitments of the Group's suppliers. Non-compliance may entail a range of consequences in the contractual relationship with Acerinox.** \n\n#### **Whistleblowing channel**\n\n#### **GRI 2-16**\n\nTo encourage the application of the Code of Conduct, the company has a whistleblowing channel, a communication tool accessible to all Acerinox employees and stakeholders. Its purpose is to report behavior that breaches the Code of Conduct and Best Practices as well as to request advice on the application of the organization's policies and practices for responsible business conduct.\n\nIn 2023, the Group's whistleblowing channel was modified per Law 2/2003 of February 20, 2003, on the protection of persons who report regulatory violations and the fight against corruption. The aforementioned legislation incorporates the Whistleblower Directive into Spanish law.\n\nThis modification to the Acerinox whistleblowing channel required the acquisition of an external whistleblowing hotline (EQS) while keeping its management internal. In addition, the various whistleblowing channels of the Group's companies were unified, and the new rules governing them were approved.\n\nDuring 2023, 27 complaints were received. In 9 cases, breaches of internal regulations or applicable law were found; in the others, no breaches were found. These breaches were committed by third parties (7) and/or by employees or executives of the Group (2). For each complaint substantiated by a breach, mandatory corrective measures and/or sanctions were applied.\n\nCommunication mechanisms of the whistleblowing channel:\n\n#### **Company websites:**\n\n- https://www.acerinox.com/en/accionistas-einversores/gobierno-corporativo/etica-ytransparencia/canal-denuncias/index.html\n- https://www.northamericanstainless.com/governance/\n- https://www.columbus.co.za/\n- https://www.bahrustainless.com/en/Corporate-Responsibility/ethics-and-transparency/\n- https://www.vdm-metals.com/en/company/about-vdmmetals/corporate-responsibility\n\n#### **Telephone numbers**\n\n#### **Post:**\n\n• Calle Santiago de Compostela, 100 (28035) Madrid, Spain.\n\n- Email:\n- canaldedenuncias@acerinox.com\n- whistleblowing@acerinox.com\n\nImage /page/196/Picture/26 description: The image shows a close-up of a modern building's exterior with a geometric design. The structure is made of blue-tinted metal beams that intersect to form a grid-like pattern. Black cables run diagonally across the grid, adding to the geometric complexity. The background is a bright, overcast sky, which provides a stark contrast to the metal and cables. The overall effect is one of modern architecture and engineering.\n\n{197}------------------------------------------------\n\nImage /page/197/Picture/1 description: The image shows the Acerinox logo. The logo is a blue circle with the word \"ACERINOX\" in white letters inside the circle. The letters are arranged in a slightly curved manner to fit the shape of the circle.\n\nThrough these channels, the complainant may request a face-to-face meeting to present their complaint. In this case, it will be recorded and they will be informed of the processing of their personal data in accordance with the applicable legislation.\n\nIf the complaint is received by any other means (e.g. a report to an immediate supervisor), the information shall be forwarded immediately to the whistleblowing channel manager so that it can be processed in accordance with the applicable regulations.\n\n#### **Compliance function**\n\nThe compliance function is made up of the set of actions and entities that prevent and detect the regulatory non-compliance risks that may arise in any business process, promoting a culture of compliance at the Acerinox Group and avoiding, or at least reducing, the risk of sanctions, fines, or reputational damage loss as a result of non-compliance with applicable legislation.\n\nThe Group's companies, management team, and employees act within the framework established by the laws of the countries where they are located, internal rules and the Acerinox Code of Conduct and Good Practices.\n\nThe Group promotes a culture of prevention and zero tolerance for illegal acts, carrying out and implementing monitoring, prevention and compliance activities across all its companies.\n\nThe Compliance Department, which reports directly to the Audit Committee, coordinates the roll-out of the compliance model in all Group companies. This model includes the Crime Prevention Program, aimed at averting the risk of crimes being perpetrated, particularly those entailing criminal liability for the legal entity.\n\nIn 2023, Acerinox took another step down the path of continuous improvement to prevent and mitigate risks by subjecting the Crime Prevention Program to an external audit carried out by AENOR. This was part of the process for obtaining certification under UNE 19601: Management system for criminal compliance, a standard aimed at reducing criminal risk exposure and promoting a culture of crime prevention.\n\n#### **\\_Key indicators**\n\nImage /page/197/Figure/11 description: The image contains the number 27 in a bold, dark blue font. The number is positioned centrally in the image.\n\nInquiries received via the ethical channel\n\nImage /page/197/Picture/13 description: The image shows three numbers: 27, 82%, and 1,971. The numbers are written in a dark blue font.\n\nInquiries resolved\n\nEmployees trained in compliance\n\n#### **Crime prevention program**\n\n#### **GRI 2-15 / 205-2**\n\nThe Acerinox Group's criminal compliance management system is called the \"Crime Prevention Program.\"\n\nIt includes measures designed to identify, evaluate and avoid the commission of crimes in the Group's activities, and is made up of the necessary policies, processes and procedures, in accordance with best practices in this area.\n\nThe program follows the risk management methodology adopted by the Acerinox Group, which has three phases: identification, assessment, and mitigation.\n\nImage /page/197/Picture/20 description: This image shows a modern building with a skyway. The building is made of concrete and has a minimalist design. The skyway is made of metal and has a perforated design. The skyway connects two buildings. The ground is paved with light-colored tiles. The sky is blue and there are some clouds.\n\n{198}------------------------------------------------\n\nImage /page/198/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, partially obscured by a blue circle. The text is white, and the circle is a deep blue color. The circle appears to be positioned behind the text, giving the impression that the text is emerging from within the circle.\n\nThe program is monitored, measured, analyzed, and evaluated in accordance with the \"crime prevention wheel\":\n\n#### **\\_Annual crime prevention wheel**\n\nImage /page/198/Figure/4 description: The image is a circular diagram divided into four quadrants, each representing a phase of a process. The quadrants are labeled with months: \"OCT - DEC\", \"JAN - MAR\", \"APR - JUN\", and \"JUL - SEPT\". Each quadrant contains a description of the activities performed during that phase. The \"OCT - DEC\" quadrant, colored in dark blue, states \"Reassessment of criminal risks. Action and Training Plan\". The \"JAN - MAR\" quadrant, colored in light purple, states \"Updates to processes and controls\". The \"APR - JUN\" quadrant, colored in light purple, states \"Internal assessment of controls\". The \"JUL - SEPT\" quadrant, colored in orange, states \"Assessment and certification\". In the center of the circle, there is a smaller circle divided into four sections labeled \"1\", \"2\", \"3\", and \"4\", with the word \"Phases\" below the numbers.\n\nThe crime prevention wheel includes the following phases:\n\n#### **A. Processes and monitoring update:**\n\nconfirmation of the program's modification to suit the Group's organizational and functional changes.\n\n#### **B. Monitoring self-assessment:**\n\ndispatch of monitoring confirmation surveys to the people both involved in and responsible for monitoring.\n\n#### **C. Evaluation and certification:**\n\nevaluation of criminal risks in light of the survey results; certificates of compliance are prepared and signed.\n\n#### **D. Action and training plan:**\n\ndocumentation of the monitoring, measurement, analysis, and evaluation work, specifying the action plans found and completed/pending training measures.\n\n**In 2023, risks related to the following crimes were reviewed and reevaluated: harassment, discovery and disclosure of secrets, digital sabotage and damage, intellectual and industrial property right infringements, hate speech, and tax offenses.** \n\nNew crime prevention program management software from Diligent has also been put in place.\n\n#### **Training**\n\nThe following training activities took place in 2023:\n\n- General training on the Crime Prevention Program for managers and persons in charge of the various departments of non-Spanish subsidiaries affected by the established crimes, as well as for people both involved in and responsible for monitoring.\n- Online training on money laundering, terrorism, and criminal groups for the 302 Group employees most exposed to this type of crime due to their jobs.\n- Online training on fraud and punishable insolvency for the 290 Group employees most exposed to this type of crime due to their jobs.\n\nBasic training on the Crime Prevention Program and Code of Conduct takes place continually and is provided to new Group hires in Spain.\n\n#### **Internal regulations**\n\nBuilt around the Code of Conduct as a backbone, Acerinox has approved various development rules in the area of compliance:\n\n- Crime prevention model\n- Internal instructions on gifts and invitations\n- Internal instruction on conflicts of interest\n- Internal instruction on bribery prevention\n- Internal instruction on competition\n- Internal instruction on good financial practices\n- Internal instruction on confidentiality\n- Internal instruction on third-party risks\n- Internal instruction on the commission of crimes.\n\nImage /page/198/Picture/33 description: A low-angle shot captures the architectural detail of a modern building with a curved glass facade. The building's design features a sleek, contemporary aesthetic, with the glass panels reflecting the sky and surrounding environment. The curvature of the building adds a dynamic element to the composition, creating a sense of movement and fluidity. The image emphasizes the building's unique design and its integration with the urban landscape.\n\n{199}------------------------------------------------\n\nImage /page/199/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The word is positioned inside a blue circle that is not fully closed at the bottom, giving the impression of a curved line underneath the text.\n\nThe following standards were approved and distributed during 2023:\n\n- **A.** Policy approving the basis of the whistleblowing system of the Acerinox Group, its organic management and the rights and guarantees of the persons concerned.\n- **B.** Procedure for the reporting, handling, and resolution of complaints.\n- **C.** Acerinox Group internal regulations on the purchase of goods and services.\n\nIn addition, a repository of all the Group's regulations, called ACERINORM, has been created and is available to all employees.\n\n#### **Data protection**\n\nThe Group has a data protection model that is adapted to local legal requirements where it is present and guarantees good data governance. The Group periodically assesses compliance in order to design the necessary actions for continuous improvement.\n\nIn 2018, the Group appointed a single Data Protection Officer (hereinafter DPO) for all its companies, supported and advised by the rest of the organization in the performance of their duties. The DPO performs their duties with due regard to the risks associated with processing operations, taking into account the nature, scope, context and purposes of the processing. In accordance with the requirements of German regulations regarding data protection, VDM companies have their own DPO.\n\n**At Acerinox, we are aware of the importance of identifying organizations' responsibilities regarding respect for human rights and awareness of their current impact on the same. To help benefit and support human rights, we joined the Business & Human Rights Accelerator program of the Global Compact, the leading UN initiative in global sustainability.**\n\n#### **Commitment to human rights**\n\nAt Acerinox, we firmly respect human rights. In 2021, the board of directors approved the Human Rights Policy, available on the company website, which sets out the Group's commitments in this respect, in accordance with the principles established in the United Nations Universal Declaration of Human Rights, the Declaration on Fundamental Principles and Rights at Work and its Follow-up Procedure of the ILO (International Labor Organization), and the Guiding Principles on Business and Human Rights of the United Nations.\n\nAcerinox also maintains a firm commitment to the Principles of the Global Compact and the Sustainable Development Goals, the United Nations' frames of reference that are underpinned by various human rights declarations.\n\nThis policy applies to all the companies that make up Acerinox and binds all the governance bodies of the Group and their companies, employees and, as appropriate, the persons or entities that provide services or that supply goods to Group companies.\n\n#### **Human rights due diligence model**\n\nAcerinox is making progress in the development of its human rights due diligence model, supported by preexisting procedures and systems. The model follows the methodology established by the United Nations Guiding Principles on Business and Human Rights. Its goal is to provide the necessary tools to guarantee that human rights are properly protected and respected.\n\nThe due diligence process focuses on identifying, preventing, and mitigating current and potential negative impacts on human rights arising from own and value-chain activities.\n\nImage /page/199/Figure/18 description: The image shows the logos of the UN Global Compact, Business & Human Rights Accelerator, and the Sustainable Development Goals.\n\nImage /page/199/Figure/19 description: The image shows a circular diagram with four elements representing the Acerinox Group's human rights management model. The elements are arranged in a clockwise direction, starting from the top: 1. Commitment, 2. Due diligence, 3. Complaint mechanisms, and 4. Communication. In the center of the diagram is a circle containing the text \"Elements of the Acerinox Group's human rights management model.\"\n\nThe Company takes a continuous-improvement approach to human rights, keeping an up-to-date vision amid major economic and social transformations, including addressing emerging human rights.\n\nNo human rights violation reports were received in 2023.\n\n{200}------------------------------------------------\n\n## **Responsible tax policy**\n\n#### **GRI 3-3 / 201-4 / 203-1 / 203-2 / 207-1 / 207-2 / 207-3 / 207-4**\n\nIn line with our plan to advance with the development of ethical and transparent corporate governance, our firm commitment to sustainability also extends to taxation. Taxes are a fundamental tool for creating long-term sustainable value and now, more than ever, society needs a commitment from enterprises in all tax-related areas.\n\nAcerinox firmly believes in strict adherence to tax legislation in all the countries where we operate, in cooperating with the tax authorities and in tax transparency.\n\nSince its approval in 2011, Acerinox has adhered to the Code of Good Tax Practices and is an active participant in the Tax Forum for Large Companies.\n\nAs a sign of our commitment to best practices in tax matters, collaboration with the tax authorities and transparency, the Group has voluntarily submitted (for the second consecutive year, a tax transparency report to the Spanish tax authorities; it plans to submit it on a recurring basis every year. The purpose of this report is to provide information on certain aspects of the companies' economic activities, ranging from an explanation of the Group's tax strategy approved by the management bodies, its tax contribution, the transfer pricing policies applied by the Group, the degree of consistency with the OECD BEPS principles, an explanation of the most substantial corporate transactions, and the cooperative programs in which the Company participates, among other matters.\n\nAs a result of this commitment, Acerinox was awarded the \"T for Transparent 2022\" seal by the Haz Foundation for its responsible taxation and good governance. This award demonstrates compliance with transparency indicators; Acerinox is one of the only 13 companies to have been awarded this seal, and it is perceived as one of the most transparent companies in the industry.\n\nIn recent years, in its integrated annual report on the website, the Group has published details of its tax contribution in the countries where it operates, as well as the General Tax Policy.\n\nLikewise, Acerinox has been an active party in various procedures in the cooperative field, including its participation in the OECD-backed ICAP program, which began in mid-2019 and concluded in March 2022 with the receipt of letters from the various participating tax administrations; these categorized the transactions examined, in general, as low tax risk. Acerinox also has a bilateral advance pricing agreement (APA) with the Spanish and German tax authorities; signed in 2017, it is now in the renewal process. In addition, it has collaborated with the tax authorities in the resolution of various mutual agreement procedures.\n\nImage /page/200/Picture/10 description: The image shows a building with a unique roof structure. The roof is made of metal and has a triangular pattern. The sky is visible in the background.\n\n#### **\\_Key indicators GRI 201-1**\n\nShareholder remuneration (EUR M)\n\nTaxes paid (EUR M) Staff remuneration (EUR M)\n\nDirect economic value generated (EUR M)\n\n**150 233 637 6,766 6,141 625** Economic value distributed (EUR M)\n\n625\n\nEconomic value retained (EUR M)\n\nThe direct economic value generated includes the Group's revenue, other operating income (excluding extraordinary income), subsidy income, interest income, and proceeds from the sale of fixed assets.\n\nThe economic value distributed includes purchases of commodities and consumables, operating expenses (excluding extraordinary expenses), taxes, personnel expenses, financial interest expenses, payments, dividend payments, purchases of treasury shares, and corporate income tax payments\n\n{201}------------------------------------------------\n\nImage /page/201/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned within a circular shape, also in blue, that appears to be a stylized representation of a ring or orbit. The overall design is simple and corporate, with a focus on the company name.\n\n### **Internal monitoring and oversight framework**\n\n#### **GRI 207-1 / 207-2 / 207-3**\n\nThe Acerinox Group's General Tax Policy forms part of the Group's corporate governance system. It is available on the company website and sets out the principles and good practices for tax management in the Group, with a view to ensuring compliance with applicable tax legislation, adequately coordinating the management of all Group companies, and preventing tax risks and inefficiencies when making business decisions. The tax risk management and internal control framework also falls under the Risk Control and Management Policy, available on the company website. See 3.3 Risk management in this report for details of the management principles.\n\nThe Acerinox Group is aware of this importance of Base Erosion and Profit Shifting(BEPS) principles within its activity, and has therefore developed different internal mechanisms to comply with them. It has put into place various internal mechanisms to ensure compliance with these principles, which include an annual self-assessment of BEPS risks, in accordance with the 19 tax risk indicators established by the OECD. Acerinox considers that its tax policy is compliant with the BEPS principles and actions approved by the OECD and does not carry out any aggressive tax planning for the purpose of: i) shifting profits to entities in countries with low or no taxation, or ii) using complex mechanisms that would erode taxable income.\n\nUnder 'Contribution to the welfare state', the Acerinox Group's Code of Conduct and Good Practices expressly prohibits the incorporation or holding of entities in territories classified as tax havens for the sole purpose of reducing the corporate income tax base. For these purposes, Acerinox considers as tax havens those places listed in Ministry of Finance Order 115/2023 of February 9 or its subsequent amendments.\n\nAcerinox also complies with the legislation in each country where it operates and pays the corresponding taxes as per the regulations in force.\n\n#### **Tax contribution**\n\n#### **GRI 201-1**\n\nThe Acerinox Group endeavors to maximize its financial and corporate profits without affecting the fulfillment of its tax obligations.\n\nThe value generated by Group companies is distributed to the tax authorities through the payment of taxes, to employees through the payment of salaries, to creditors through the payment of interest, and to shareholders through the payment of dividends.\n\nAs a sign of the Group's commitment to comply with its tax obligations in all the countries in which it operates. The following is a breakdown by country of profits earned and corporate income tax paid. All the taxes paid and received by the Acerinox Group in 2023 are also disclosed.\n\nImage /page/201/Figure/13 description: The image shows a low-angle view of a tall bridge pylon against a clear blue sky. The pylon is dark gray and appears to be made of concrete or steel. It tapers slightly as it rises, and there are visible details suggesting a textured surface or segmented construction. To the right of the pylon, a series of parallel cables stretch diagonally across the frame, adding a sense of scale and perspective. The sky is a gradient of light blue, with the sun positioned behind the pylon, creating a bright, diffused glow. The composition emphasizes the height and architectural design of the bridge structure.\n\n{202}------------------------------------------------\n\n#### **GRI 207-4**\n\n| Country                 | Pre-tax income by<br>country | Payment<br>of taxes |\n|-------------------------|------------------------------|---------------------|\n| Spain                   | -157,424                     | -12,157             |\n| USA                     | 766,756                      | 231,791             |\n| South Africa            | -49,799                      | 1,901               |\n| Malaysia                | -208,184                     | 29                  |\n| Canada                  | 5,423                        | -82                 |\n| Mexico                  | 6,057                        | 326                 |\n| Portugal                | 385                          | 335                 |\n| France                  | 1,779                        | 405                 |\n| Germany                 | 201,810                      | -1,544              |\n| Italy                   | 2,675                        | 7,890               |\n| UK                      | 3,057                        | 615                 |\n| Sweden                  | 720                          | 0                   |\n| Switzerland             | -31                          | 0                   |\n| Austria                 | 1,669                        | 372                 |\n| Poland                  | 604                          | 694                 |\n| Chile                   | -1,092                       | -80                 |\n| Argentina               | -402                         | 38                  |\n| Belgium                 | 1,060                        | 213                 |\n| Russia                  | -20                          | 0                   |\n| Turkey                  | 954                          | 125                 |\n| Brazil                  | -4                           | -11                 |\n| Colombia                | -196                         | 0                   |\n| Peru                    | -156                         | 0                   |\n| Australia               | 389                          | 137                 |\n| China                   | 3,221                        | 1,240               |\n| Hong Kong               | 668                          | 6                   |\n| Japan                   | 2,361                        | 974                 |\n| Korea                   | 543                          | -17                 |\n| Singapore               | -71                          | 34                  |\n| India                   | 208                          | 17                  |\n| United Arab<br>Emirates | -4                           | 0                   |\n| Luxembourg              | 2                            | 0                   |\n| Total                   | 582,955                      | 233,251             |\n\nImage /page/202/Picture/3 description: The image shows a close-up of a modern building with a curved roof. The roof is made of many small, rectangular panels, and the sky is visible in the background.\n\nThe results that appear in the table are the aggregate results in each of the jurisdictions and correspond to those recorded under local regulations.\n\nTaxes paid include all payments of income tax to the tax authorities during the year, whether payments on account, settlements of prior years, payments in respect of assessments, or mutual agreements.\n\nThe Group presents detailed information on tax litigation and open inspections in its financial statements (Note 19.5)\n\nIn some countries, legislation requires payments on account to be made on the basis of the profit or loss obtained for the year rather than on the basis of taxable income. These may prove higher than those that would be payable according to the calculation of taxable income.\n\nAs can be seen in the table, the country with the highest corporate income tax contribution is the country in which the Group makes the highest profits (United States).\n\nThe following jurisdictions are likewise notable in this fiscal year due to the difference between reported results and taxes:\n\n- **Spain:** pre-tax income reflects dividends received by the Group's parent. An exemption of 95% is applicable to these as said parent files taxes in the home country. This fiscal year, the excess payments on account made in 2021 and 2022 were also collected.\n- **Germany:** pre-tax income also includes dividends received by entities of the VDM subgroup, which hold stakes in other entities. On the other hand, tax legislation allows different measurement criteria to be used for certain assets and liabilities, such as inventories or pension plans, which gives rise to temporary differences between accounting profit and taxable income.\n- **Italy:** this fiscal year, agreements with the tax authorities for certain pending litigations relating to the years 2007 to 2013 have been met. In addition, the payments on account are determined based on the tax results from the previous year.\n- **Canada:** outstanding sums from previous years have been received from mutual agreement procedures with other countries.\n\n{203}------------------------------------------------\n\nImage /page/203/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, with a gap at the bottom, giving the impression of a ring. The text is in a lighter color, possibly white or a very light shade of blue, contrasting with the darker blue of the circle.\n\nIn the remaining countries the profit obtained in each jurisdiction is in line with the amount of income tax paid.\n\nThe methodology used to determine the total tax contribution (TTC) measures the Group's payments to the different tax authorities.\n\nThis methodology generally allocates taxes paid and taxes received to each fiscal year on a cash basis.\n\n- **Taxes paid** are those that entail a cost for the Group companies, such as income tax, social security payable by the Company, and certain environmental taxes, property taxes, and other local taxes.\n- **Taxes received** are those generated as a result of the Company's economic activity, with no cost to companies other than in their management, such as withholding tax on salaries owing to personal income tax (PIT), other withholdings on dividends or interest, and VAT.\n\n| Taxes paid               | Amount (EUR thousands) | %   |\n|--------------------------|------------------------|-----|\n| Corporate income tax     | 233,251                | 71% |\n| Social security          | 66,860                 | 20% |\n| Other indirect taxes (*) | 17,191                 | 5%  |\n| Local taxes              | 9,697                  | 3%  |\n| Total taxes paid         | 326,999                | 51% |\n\n(\\*) Other indirect taxes include the taxes on electricity, imports, etc.\n\nIn keeping with the OECD's thinking, the analysis of the tax burden took into account the contributions made to social security or similar bodies in other jurisdictions, given that they are mandatory payments that generally account for a significant portion of a state's income and, in light of them being more tax-like than contribution-like, the Group considers them as taxes.\n\n| Taxes received                                      | Amount (EUR thousands) | %   |\n|-----------------------------------------------------|------------------------|-----|\n| Employee personal income tax and<br>social security | 135,663                | 43% |\n| VAT (*)                                             | 153,742                | 49% |\n| Withholdings                                        | 26,978                 | 9%  |\n| Total taxes received                                | 316,382                | 49% |\n\n(\\*) The VAT shown is the net amount of taxes received and paid.\n\nImage /page/203/Figure/12 description: The image shows a low-angle view of two modern buildings against a clear blue sky. The building on the left has a grid-like facade with large, reflective glass windows and dark frames, suggesting a residential or office structure with balconies. The building on the right features a more angular design with gray and white panels, creating a geometric pattern. The contrast between the two buildings highlights different architectural styles, while the blue sky provides a clean and bright backdrop.\n\n{204}------------------------------------------------\n\nImage /page/204/Picture/1 description: The image shows the 2023 integrated annual report of Acerinox. The total tax contribution is EUR 643 M, and the taxes paid are EUR 327 M. There are two pie charts, one showing the total taxes collected and the total taxes paid, and the other showing the breakdown of taxes paid, including corporate income tax, social security, other indirect taxes, and local taxes. The percentages for other indirect taxes and local taxes are 17% and 10%, respectively.\n\n The amount of taxes paid represents 51% of the Group's total tax contribution, as shown in the chart above.\n\nThe Group's pre-tax consolidated profit amounted to EUR 355 million in 2022. Total taxes paid and received amounted to EUR 643 million. This means that global tax contribution was higher than total pre-tax profit.\n\nCompanies do key work as tax collection agents in the framework of their business operations; likewise, they play an essential role as qualified employers, assuming the risk and compliance costs associated with their proper liquidation and timely payment. Although the taxes collected do not represent a cost for the company, they are generated and paid into the public treasury thanks to the economic activity of the business groups. They are significant, both as employment taxes and taxes on products and services\n\n#### **\\_Public subsidies received in 2023**\n\n| Public subsidies received (EUR thousands) | 2023   |\n|-------------------------------------------|--------|\n| R&D                                       | 1,889  |\n| Environment                               | 24,612 |\n| Allocation of CO2 allowances              | 19,113 |\n| Aid related to COVID-19                   | 29     |\n| Training                                  | 273    |\n| Other                                     | 63     |\n| Total                                     | 45,979 |\n\nImage /page/204/Picture/8 description: The image is a logo with a blue square containing a white letter 't' and a white star above the 't'. Below the square are the words 'RESPONSABILIDAD' and 'FISCAL 2022' in blue.\n\n### **Financial Transparency Seal**\n\nAcerinox has been awarded a tax transparency seal by the Haz Foundation, which evaluates the governance system and transparency practices of companies to prevent tax hazards.\n\n{205}------------------------------------------------\n\n## **5.2 Eco-efficiency and climate change mitigation**\n\n## **Climate change mitigation**\n\n**GRI 3-3**\n\n#### **\\_Relevant activities**\n\nImage /page/205/Picture/5 description: The image shows a line drawing of a person standing on a podium with their arms raised in a gesture of victory. The person is drawn with simple lines and has a generic human shape. The podium has three levels, suggesting first, second, and third place. The drawing is in a light purple color and has a clean, minimalist style.\n\n|  |  |   | 1 |\n|--|--|---|---|\n|  |  | 0 |   |\n|  |  |   |   |\n|  |  |   |   |\n|  |  |   |   |\n\n#### **Milestones 2023 Challenges 2024**\n\n| Verification of product carbon footprint per ISO 14067, including scope 1, 2 and 3 for each steel family       | Launch of the ECO ACERINOX range of sustainable products                                 |\n|----------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|\n| Economic quantification of physical and transition climate change risks, in line with the TCFD recommendations | Review of decarbonization targets, taking SBTI into account                              |\n| Increase in the use of renewable energy and contracting of new renewable PPAs                                  | Review of the plan to install photovoltaic renewable energy panels at the various plants |\n| Completion of the CDP Climate questionnaire, obtaining a B score                                               | Review of decarbonization plan and associated investment plan                            |\n\nStainless steel is a very sustainable, long-lasting, and infinitely recyclable material. Despite these positive qualities, the steel industry accounts for a considerable proportion of global industrial emissions. This is due to the intensive use of energy to melt scrap and ferro-alloys in electric arc furnaces to obtain molten material, as well as the use of fossil fuels, such as natural gas, in the heating and melting processes. Reducing emissions in the steel industry is essential to mitigate climate change and meet global targets.\n\nIn this sense, Acerinox committed to decarbonizing its activity by implementing the Positive Impact 360º Sustainability Master Plan. One of its pillars is eco-efficiency and climate change mitigation; it sets the target of a 20% reduction in GHG emissions intensity (Scope 1 and 2) by 2030, using 2015 as the base year.\n\nThe Group has also established a sustainability and climate change policy supported by complementary policies that set out its commitments regarding climate change mitigation.\n\nThe Acerinox climate change management model follows the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), and provides information on governance, strategy, risk, and opportunity management, as well as metrics and targets to mitigate climate change.\n\n| _Key indicators                   |               |                 |                 |\n|-----------------------------------|---------------|-----------------|-----------------|\n| GRI 305-1 / 305-2 / 305-3 / 305-4 |               |                 |                 |\n| 1,092 t CO2e/t steel              | 778,994 tCO2e | 1,483,902 tCO2e | 3,521,612 tCO2e |\n| SCOPE 1+2 / PRODUCTION            | SCOPE 1       | SCOPE 2         | SCOPE 3         |\n\n{206}------------------------------------------------\n\nImage /page/206/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged vertically within a blue circle. The circle is not fully closed, with a gap at the top right, giving the impression of a crescent shape.\n\n### **Climate change governance**\n\n#### **GRI 3-3**\n\nThe board of directors is ultimately responsible for the oversight of the Group's climate change management, to which the sustainability and audit committees report within their spheres of influence.\n\nThe head of sustainability reports to the Sustainability Committee on at least a quarterly basis regarding the primary sustainability initiatives, including climate change mitigation, as well as the metrics and monitoring of the associated goals. The Group has a team dedicated to managing sustainability-related themes at each plant and a corporate sustainability team that works together to coordinate the geographical roll-out of this management model.\n\nThe chief risk officer reports to the Audit Committee at least twice a year on the Group's main risks, including those associated with climate change.\n\n#### **Climate change strategy**\n\n#### **GRI 3-3 / 302-4 / 305-5**\n\nAcerinox established its commitment to climate change mitigation around four pillars:\n\n- **Improving energy efficiency:** through initiatives such as heat recovery boilers and the use of autonomous guided vehicles (AGVs), etc.\n- **Increasing the use of renewable energy:** by entering into PPAs and obtaining renewable energy certifications, as well as through the installation of solar panels for self-supply at the Group's facilities.\n- **Using sustainable fuels:** analysis of the feasibility of replacing natural gas consumption with other carbonneutral fuels, such as biomethane and green hydrogen.\n- **Carbon capture, utilization and storage:** studies into the technical and economic feasibility of capturing a portion of the CO2 produced at the plants.\n\n#### **Management of climate change risks and opportunities**\n\n#### **GRI 201-2**\n\nThe Group's climate risk management is integrated into its corporate risk management.\n\nClimate risks are overseen by the board of directors' Audit Committee, as part of its role to supervise the integrated risk monitoring system. Climate risks are also examined by the board's Sustainability Committee.\n\nTo strengthen their management, in 2023 the Group also analyzed the physical and transition climate change risks using TCFD methodology. The study considered the impact that climate change would have on each of the Group's facilities over two time horizons - 2030 and 2050 - under two climate scenarios. For physical risks, IPCC RCP 2.6 (aligned with the Paris Agreement) and RCP 8.5 (business as usual (BAU)) were taken into account. In the case of transition risks, the International Energy Agency's Stated Policies Scenario (STEPS) and Sustainable Development Scenario (SDS) (aligned with the Paris Agreement) were considered.\n\nThe impact of climate risk on the Group's financial statements is structured into three main areas: analysis of the recoverability of non-financial assets, determination of the useful lives of plants and equipment and credit ratings. Due to the nature of the business, we feel that there is no material impact from climate change risk that would indicate impairment.\n\n**The company has joined the Climate Ambition Accelerator initiative of the Spanish chapter of the UN Global Compact. This program helps companies set quantifiable, science-based emissions reduction targets and develop concrete plans to achieve them. Through this initiative, Spanish companies like Acerinox are expected to become leaders in climate change mitigation.**\n\nImage /page/206/Picture/21 description: The image contains three logos arranged horizontally. On the left is the UN Global Compact logo, featuring a globe encircled by laurel leaves. In the center is the text \"CLIMATE AMBITION ACCELERATOR\" in a simple, sans-serif font. To the right is a circular logo composed of many colorful segments, resembling a stylized flower or sun.\n\nImage /page/206/Picture/22 description: The image shows a close-up of a building's structural support system, featuring white metal beams and glass windows. The beams intersect at various angles, creating a geometric pattern against the bright, white background of the sky visible through the windows. The metal is a light, cool tone, possibly reflecting the sky's color. The overall composition is clean and modern, emphasizing the architectural design and the interplay of light and structure.\n\n{207}------------------------------------------------\n\nImage /page/207/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The text is partially obscured by a blue circle that surrounds the right side of the word. The circle is a solid blue color.\n\nThe analysis carried out enabled the Group to identify the following most salient risks and opportunities:\n\n#### **\\_Risks and opportunities**\n\n#### **GRI 201-2**\n\n| Risk                                                                                                   | Type of risk                          | Classification         | Time horizon     | Scenarios          | Potential business impact                                                                                                                                                       | Mitigation and control<br>measures                                                                                                                                                                                                                                                                                                                                       |\n|--------------------------------------------------------------------------------------------------------|---------------------------------------|------------------------|------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Risk of flooding due<br>to very heavy rain<br>and/or rivers<br>bursting their banks                    | Physical -<br>acute                   | Very high*             | 2030 and<br>2050 | RCP 2.6 and<br>8.5 | Interruption of production<br>during flooding due to<br>limited access to the plant                                                                                             | Placing primary equipment<br>at height to avoid it being<br>affected in the event of<br>flooding.<br><br>Putting in place<br>containment and drainage<br>measures to channel flood<br>water.                                                                                                                                                                             |\n| Risk of water stress<br>and drought                                                                    | Physical -<br>chronic                 | High and very<br>high* | 2030 and<br>2050 | RCP 2.6 and<br>8.5 | Limited water supply or<br>interruption of water supply<br>for extended periods of<br>time<br><br>Increased water treatment<br>costs due to the low quality<br>of the resource. | Setting objectives to reduce<br>water consumption<br><br>Implementing water<br>consumption efficiency<br>measures<br><br>Investing in water<br>treatment and recovery<br>plants                                                                                                                                                                                          |\n| Risk associated<br>with the<br>introduction of<br>mechanisms or<br>levies that tax<br>carbon emissions | Transition -<br>political or<br>legal | Moderate and<br>high   | 2030 and<br>2050 | STEPS and SDS      | Direct impact on<br>operations<br><br>Indirect impact on<br>supply chains, involving<br>potential additional<br>operating costs<br>in inputs and energy prices.                 | Setting targets aimed at<br>improving carbon intensity<br><br>Adopting energy efficiency<br>and emissions reduction<br>measures<br><br>Increasing the consumption<br>of renewable electricity<br><br>Looking into replacing<br>natural gas with low-carbon<br>fuels (hydrogen and<br>biomethane)<br><br>Analyzing carbon capture,<br>utilization and storage<br>projects |\n| Changes in<br>customer<br>preferences                                                                  | Transition -<br>market                | Low and<br>moderate    | 2030 and<br>2050 | STEPS and SDS      | Decrease in demand                                                                                                                                                              | Setting of 2030<br>sustainability targets<br><br>Sustainability Master Plan -<br>Positive Impact 360°<br><br>Developing premium<br>products that meet more<br>stringent sustainability<br>criteria                                                                                                                                                                       |\n\n\\*Physical risks include the highest level identified at any of our facilities.\n\n\\*The costs of measures associated with climate risks are quantified and reported in the Capex and Opex related to the climate change mitigation objective established in the European Taxonomy.\n\n{208}------------------------------------------------\n\nImage /page/208/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is slightly angled upwards from left to right. The circle is a thick, dark blue line.\n\n## **\\_Risks and opportunities**\n\n**GRI 201-2**\n\n| Opportunity                                     | Type of opportunity   | Classification | Time horizon  | Scenarios     | Potential business impact                                                                                | Stimulus measures                                                            |\n|-------------------------------------------------|-----------------------|----------------|---------------|---------------|----------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|\n| Increasing demand for more sustainable products | Products and services | High           | 2030 and 2050 | STEPS and SDS | Increased steel demand due to the development of new technologies and products for the energy transition | Setting of 2030 sustainability targets                                       |\n|                                                 |                       |                |               |               |                                                                                                          | Sustainability Master Plan. Positive Impact 360°                             |\n|                                                 |                       |                |               |               |                                                                                                          | Developing premium products that meet more stringent sustainability criteria |\n| Improving energy efficiency                     | Resource efficiency   | Moderate       | 2030 and 2050 | STEPS and SDS | Reduction of environmental impact                                                                        | Setting targets aimed at improving carbon and energy intensity               |\n|                                                 |                       |                |               |               | Reduction of operating costs                                                                             | Adopting energy efficiency and emissions reduction measures                  |\n| Use of renewable or low-carbon energy           | Energy sources        | Moderate       | 2030 and 2050 | STEPS and SDS | Reduced exposure to the future price of fossil fuels                                                     | Setting targets aimed at increasing the consumption of renewable energy      |\n|                                                 |                       |                |               |               | Improving business sustainability                                                                        |                                                                              |\n\n\\_Risks\n\nImage /page/208/Figure/7 description: The image contains two scatter plots. The first scatter plot shows the likelihood and impact of different risks, including \"ESG market risk\" at likelihood 1.0 and impact 4.2, \"Water stress risk\" at likelihood 2.0 and impact 2.0, \"Flooding risk\" at likelihood 1.2 and impact 1.7, and \"Carbon price risk\" at likelihood 4.0 and impact 4.5. The second scatter plot shows the likelihood and opportunity of different factors, including \"Energy Efficiency\" at likelihood 2.8 and opportunity 3.9, \"Increase demand of sustainable products\" at likelihood 3.2 and opportunity 3.0, and \"Use of renewable or low carbon energy\" at likelihood 4.0 and opportunity 1.9.\n\n{209}------------------------------------------------\n\nImage /page/209/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle appears to be incomplete, with the right side open, and it surrounds the text, giving the logo a circular or rounded appearance.\n\n#### **Decarbonization roadmap**\n\nThe Company's goal is to advance in the decarbonization of its business model. Acerinox is working to reduce the amount of CO2 released into the atmosphere and to reduce other polluting gases associated with the steelmaking process in order to achieve a considerable improvement in air quality, reducing its impact on human health and adjacent ecosystems.\n\nTo this end, the Acerinox Group has short- and medium-term initiatives grouped around the following pillars:\n\n- Improving energy efficiency through best available techniques.\n- Promotion of heat recovery systems from process sources.\n- Electrification of systems and vehicle fleet.\n- Increased use of renewable energies, especially renewable electricity.\n- Use of alternative low-carbon fuels (e.g., green hydrogen).\n- Increased use of scrap metal.\n- Increased use of low-carbon raw materials.\n- CO2 capture, storage, and use.\n- Boosting digitalization to improve energy monitoring and management.\n\nThese measures are aligned with the sustainability plan climate change targets for 2030, with 2015 as a baseline. The sustainability managers at each factory monitor them every month together with the corporate sustainability team. The evolution of the targets is reviewed quarterly by the Sustainability Committee, and the necessary measures are taken in each case.\n\nImage /page/209/Picture/15 description: The image shows a logo or heading with two distinct parts. On the left, there is a circular badge-like icon with a star in the center, and ribbons hanging down from the bottom. To the right of this icon, separated by a vertical line, is the text \"FEATURED CASES\" in bold, uppercase letters.\n\n#### **Heat recovery boiler. Palmones**\n\nThe aim of this project is to recover the excess heat generated by electric arc furnaces to generate process steam. Heat recovery is carried out on the hot air (fumes) that pass through the furnace fume exhaust ducts to the filters using air-steam heat exchangers.\n\nImage /page/209/Picture/18 description: A crane is lifting a large piece of industrial equipment. The equipment is made of metal and has a complex structure of pipes, ducts, and platforms. The crane is yellow and has a long boom that extends over the equipment. The background is a large industrial building with metal siding. There are some workers in the lower left corner of the image.\n\n#### **Unna (VDM) forklift fleet electrification**\n\nThe VDM factory in Unna (Germany) undertook an ambitious project to electrify its forklift and heavy transport fleet.\n\nThese electric vehicles replaced internal combustion vehicles that used fossil fuels.\n\nImage /page/209/Picture/22 description: The image shows an industrial setting with a series of large, black containers lined up on a platform. An overhead crane is positioned above the containers, appearing to be in the process of lifting or moving one of them. To the right, there is a red vehicle, possibly a small industrial truck or cart. The background includes industrial equipment, pipes, and a sign with colored lights, suggesting a factory or warehouse environment.\n\n{210}------------------------------------------------\n\nImage /page/210/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that arches over the text. The blue color of the circle is a deep, saturated hue, providing a strong contrast against the white background. The overall design is clean and modern, conveying a sense of strength and reliability.\n\n#### **Climate change mitigation metrics and targets**\n\n#### **GRI 3-3 / 302-1 / 302-3 / 302-4 / 305-1 / 305-2 / 305-3 / 305-4 / 305-5**\n\nThe targets set by Acerinox demonstrate its commitment to reducing its environmental impact.\n\nThe Company measures progress towards these targets and reports them to the board's Sustainability Committee on a regular basis.\n\nThe Acerinox carbon footprint is certified using ISO 14064 Standard / GHG protocol. In 2021 a significance analysis was carried out regarding the new Scope 3 categories under the ISO 14064-1:2019 standard, the most salient of which were incorporated into the certified footprint.\n\nIn 2023, the Company went a step further and calculated the product carbon footprint of the four stainless steel families used by Acerinox Europa (austenitic, ferritic, martensitic and duplex steel). The product footprint was verified by an external third party. Currently, work is underway to calculate the product carbon footprint for a specific steel.\n\n#### **\\_Table scope 1, 2 and 3 emissions (tCO2e)**\n\n#### **GRI 305-1 / 305-2 / 305-3**\n\n| Emissions      | GHG categories                                                        | Stainless | High-performance alloys |\n|----------------|-----------------------------------------------------------------------|-----------|-------------------------|\n| Direct         | 1.1. Fixed                                                            | 535,105   | 105,712                 |\n|                | 1.2. Mobile                                                           | 6,200     | 596                     |\n|                | 1.3. Process                                                          | 125,211   | 1,046                   |\n|                | 1.4. Fugitive emissions                                               | 5,029     | 95                      |\n| Total direct   |                                                                       | 671,545   | 107,449                 |\n| Indirect       | 2.1. Energy                                                           | 1,454,623 | 29,279                  |\n|                | 3.1. Goods and services purchased                                     | 2,384,151 | 247,079                 |\n|                | 3.2. Capital assets                                                   | 0         | 0                       |\n|                | 3.3. Fuel and energy activities not included<br>in Scope 1 or Scope 2 | 209,256   | 10,126                  |\n|                | 3.4. Upstream transport and distribution                              | 53,809    | 1,073                   |\n|                | 3.5. Waste generated in operations                                    | 284,134   | 0                       |\n|                | 3.6. Business travel                                                  | 1,001     | 0                       |\n|                | 3.7. Transport used on the way to and from<br>work                    | 6,594     | 0                       |\n|                | 3.8. Upstream leased assets                                           | 0         | 0                       |\n|                | 3.9. Downstream transport and distribution                            | 316,509   | 6,814                   |\n|                | 3.10. Processing of sold products                                     | 0         | 0                       |\n|                | 3.11. Use of sold products                                            | 0         | 0                       |\n|                | 3.12. End of useful life treatment of sold<br>products                | 1,039     | 27                      |\n|                | 3.13 Downstream leased assets                                         | 0         | 0                       |\n|                | 3.15. Investments                                                     | 0         | 0                       |\n| Total indirect |                                                                       | 4,711,116 | 294,398                 |\n| Total sum      |                                                                       | 5,382,661 | 401,847                 |\n\n{211}------------------------------------------------\n\nImage /page/211/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle. The text is positioned in the upper left quadrant of the circle.\n\n#### **\\_Scopes 1, 2 and 3 group emissions (tCO2e)**\n\n**GRI 305-1 / 305-2 / 305-3**\n\nImage /page/211/Figure/4 description: The image is a bar chart comparing CO2e emissions in tons for stainless steel and high-performance alloys across the years 2021, 2022, and 2023. The chart breaks down emissions into Scope 1, Scope 2, and Scope 3. For 2021 Stainless steel, Scope 1 emissions are 867,639, Scope 2 emissions are 2,124,209, and Scope 3 emissions are 4,803,641. For 2021 High-performance alloys, Scope 1 emissions are 106,409, Scope 2 emissions are 82,513, and Scope 3 emissions are 388,992. For 2022 Stainless steel, Scope 1 emissions are 768,600, Scope 2 emissions are 1,792,901, and Scope 3 emissions are 4,083,456. For 2022 High-performance alloys, Scope 1 emissions are 103,653, Scope 2 emissions are 86,266, and Scope 3 emissions are 329,489. For 2023 Stainless steel, Scope 1 emissions are 671,545, Scope 2 emissions are 1,454,623, and Scope 3 emissions are 3,256,493. For 2023 High-performance alloys, Scope 1 emissions are 107,449, Scope 2 emissions are 29,279, and Scope 3 emissions are 265,119.\n\n\\*Scope 3 emissions data for the high-performance-alloys division for 2022 have been recalculated due to the increased availability of the data used for the calculation. Additionally, the data for Scope 1 and 2 of the high-performance alloys division and Scope 3 of both divisions in 2023 have been estimated based on information available at the date of publication of the report.\n\nIn 2023, Acerinox's CO2 emissions decreased by almost 20% including scopes 1, 2 and 3. This reduction was similar in the stainless steel division and in the high-performance alloys division. It was mainly based on the increase of the use of renewable energy and the reduction of scope 3 by a lower carbon footprint of raw materials due to better scrap management.\n\n#### **\\_Scopes 1+2+3 group emissions intensity (tCO2e/t steel)**\n\n#### **GRI 305-4**\n\nImage /page/211/Figure/9 description: The image is a bar chart comparing the emission intensity (tons of CO2e/tons) of different materials across three years: 2021, 2022, and 2023. The materials compared are Stainless steel (1+2), Stainless steel (1+2+3), and High-performance alloys (1+2), and High-performance alloys (1+2+3). In 2021, Stainless steel (1+2) has an emission intensity of 1.08, Stainless steel (1+2+3) has an emission intensity of 1.77, High-performance alloys (1+2) has an emission intensity of 2.42, and High-performance alloys (1+2+3) has an emission intensity of 4.88. In 2022, Stainless steel (1+2) has an emission intensity of 1.10, Stainless steel (1+2+3) has an emission intensity of 2.84, High-performance alloys (1+2) has an emission intensity of 2.31, and High-performance alloys (1+2+3) has an emission intensity of 6.31. In 2023, Stainless steel (1+2) has an emission intensity of 1.07, Stainless steel (1+2+3) has an emission intensity of 2.70, High-performance alloys (1+2) has an emission intensity of 1.79, and High-performance alloys (1+2+3) has an emission intensity of 5.27.\n\n{212}------------------------------------------------\n\nIn line with the previous graph showing the Group's emissions, emissions intensity decreased for Scopes 1, 2 and 3 of both the stainless steel and the high-performance alloys division. The Acerinox Group is committed to reducing its carbon footprint. To this end, the Sustainability Master Plan set a target for the stainless steel division of reducing by 20% the intensity of its direct and indirect carbon emissions (Scopes 1 and 2) by 2030 with respect to 2015 levels. This target is linked to the variable compensation of senior management and other management bodies, as well as that of the Company's employees.\n\nAs discussed earlier, the drop in steel production in the latter part of the year had a major bearing on this indicator. Despite this, Acerinox almost achieved the stainless steel division's proposed target for 2023 (1,062), achieving an intensity ratio of 1,065 tCO2e/t steel produced. This improvement is due to the increased use of renewable energy and the optimization of plant operations. The stainless steel division also has sustainable loans linked to the reduction of its carbon footprint; these are tied to a 1% annual reduction in emissions intensity (scope 1+2). The 2023 target was met as the ratio was 1.07, below the target of 1.09 tCO2e/metric ton of production.\n\n#### **\\_CO2 emission intensity target and sustainable loans - Stainless steel division scopes 1+2 (tCO2e/t steel produced)**\n\n#### **GRI 305-4**\n\nImage /page/212/Figure/5 description: The image is a line graph comparing three different targets from 2015 to 2030. The y-axis ranges from 0.60 to 1.40, and the x-axis shows the years 2015, 2021, 2022, 2023, 2024, and 2030. The graph includes three lines: a \"2030 target\" line, a \"Real\" line, and a \"Sustainable loan target\" line. The \"2030 target\" line starts at 1.20 in 2015, decreases to 1.11 in 2021, 1.10 in 2022, 1.07 in 2023, 1.05 in 2024, and ends at 0.95 in 2030. The \"Real\" line starts at 1.09 in 2021, increases to 1.10 in 2022, and decreases to 1.06 in 2023. The \"Sustainable loan target\" line starts at 1.08 in 2021, increases to 1.10 in 2022, decreases to 1.09 in 2023, and ends at 1.08 in 2024.\n\nIn 2022, Acerinox committed to the Science-Based Targets Initiative (SBTi). The Group is reviewing its CO2 emission reduction targets in light of this initiative and the recently published steel industry guidance.\n\nImage /page/212/Picture/7 description: The image shows a close-up of a modern building with glass balconies. The balconies are stacked on top of each other, creating a staggered effect. The glass is reflective, and the concrete is a light gray color. The sky is visible in the background.\n\n{213}------------------------------------------------\n\nImage /page/213/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, blue letters, positioned inside of a blue circle.\n\n#### **Responsible energy management**\n\nThe iron and steel sector requires intensive energy use to melt scrap and ferro-alloys in electric arc furnaces to obtain molten material, as well as the use of fossil fuels such as natural gas in the heating processes. For this reason, Acerinox works to continually improve its production processes, promoting innovation and the development of more efficient, cleaner technologies in steel production, fostering advances in less polluting and more sustainable processes.\n\nOther measures include replacing components in existing equipment, increasing the purchase of energy with guarantees of renewable origin (PPAs and GoOs), switching to LED lighting, replacing fossil fuels with hydrogen, and improving furnaces, burners, and recovery boilers.\n\nIn addition, during 2023, the company worked on the preparation of the new \"Beyond Excellence\" efficiency plan for the next three years (2024-2026). The plan was approved by the board of directors in late 2023.\n\nThe plan consists of six pillars, notably including productivity and automation; efficiency; and decarbonization and the environment. This Plan reinforces the company's commitment to the search for solutions that reduce the environmental impact of its factories.\n\n#### **\\_Group energy consumption (GJ)**\n\nImage /page/213/Figure/14 description: This image is a bar chart titled GRI 302-1, comparing natural gas, diesel, and electricity usage for stainless steel and high-performance alloys in 2021, 2022, and 2023. In 2021, stainless steel used 12,416,327 units of natural gas, 182,558 units of diesel, and 10,797,582 units of electricity. High-performance alloys used 1,124,160 units of natural gas, 12,649 units of diesel, and 653,092 units of electricity. In 2022, stainless steel used 11,008,895 units of natural gas, 190,814 units of diesel, and 9,695,075 units of electricity. High-performance alloys used 1,125,563 units of natural gas, 13,297 units of diesel, and 680,244 units of electricity. In 2023, stainless steel used 9,919,946 units of natural gas, 159,676 units of diesel, and 8,704,437 units of electricity. High-performance alloys used 769,518 units of natural gas, 12,447 units of diesel, and 652,025 units of electricity.\n\nImage /page/213/Picture/9 description: The image shows a close-up of a blue and white structure with a series of parallel lines. The lines are arranged diagonally, creating a pattern of alternating blue and white stripes. In the foreground, there are two thick blue beams that intersect at an angle, adding depth and dimension to the composition. The overall effect is abstract and geometric, with a strong emphasis on line and color.\n\nReducing energy consumption is a key issue for Acerinox. Acerinox has therefore set a target of reducing the stainless steel division's energy intensity by 7.5% by 2030 compared to 2015.\n\nThe achievement of this target has been affected by the drop in production caused by the macroeconomic and political environment.\n\nDuring the last two years, the energy crisis, accentuated by the invasion of Ukraine and the subsequent impact on economies around the world, as well as distributors' high inventory volumes in the wake of strong imports, led to a drop in stainless steel production in the last half of the year. This drop in production had a significant impact on the factories' efficiency, worsening the indicator regarding energy intensity per metric ton of steel produced, although the total volume of emissions decreased due to the increased use of renewable energies.\n\n{214}------------------------------------------------\n\n### **\\_Stainless steel division energy intensity target (GJ/t steel produced)**\n\n**GRI 302-3**\n\nImage /page/214/Figure/3 description: The image is a line graph comparing a 2030 target with real data from 2015 to 2030. The 2030 target line starts at 8.71 in 2015, decreases to 8.43 in 2021, and continues to decrease to 8.36 in 2024, ending at 8.05 in 2030. The real data line starts at 8.45 in 2021, increases to 8.94 in 2022, and peaks at 9.41 in 2023.\n\n**Renewable Energy Certificates**\n\n**GRI 302-1**\n\n## **616,880 MWh**\n\n**+ 117% increase on the previous year**\n\nOne of the most important initiatives in the decarbonization process consists of increasing the consumption of renewable electricity through renewable PPA contracts at our factories, according to the features and opportunities available in the different countries where Acerinox operates. In 2023, renewable electricity accounts for 37% of the Group's electricity consumption, up almost 50%.\n\nThese measures will drive the transformation of the value chain by increasing our plants' resilience, strategic autonomy and energy security.\n\nIncreasing renewable energy sources is one of the targets linked to sustainable financing. Specifically, the Company has committed to improving the renewable electricity intensity ratio of the entire Acerinox Group (stainless steel and highperformance alloys divisions) by 4% per year from 2020.\n\n#### **\\_Group's renewable energy intensity (renewable kWh/t steel produced)**\n\n#### **GRI 302-1**\n\nImage /page/214/Figure/13 description: The image is a line graph comparing the 'Group' and 'Sustainable loan target' from 2021 to 2026. The 'Group' line starts at 263 in 2021, increases to 327 in 2022, and reaches 463 in 2023. The 'Sustainable loan target' line starts at 243 in 2021, increases to 252 in 2022, remains at 263 in 2023, increases to 273 in 2024, then to 284 in 2024, and finally reaches 295 in 2026.\n\nImage /page/214/Picture/14 description: A low-angle shot captures the corner of a modern building with a facade of glass panels and dark frames. The building's design features a stepped structure, with one section slightly receding from the other, creating a layered effect. The glass panels reflect the sky, displaying a gradient of light blue to white, suggesting a clear or slightly overcast day. The dark frames provide a strong contrast to the reflective glass, emphasizing the geometric pattern of the building's exterior. The composition is clean and architectural, highlighting the building's contemporary design and use of glass and metal.\n\n\\*Renewable energy consumption (PPAs + GOs), remaining energy from national energy mix (location-based)\n\n{215}------------------------------------------------\n\nImage /page/215/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a gap at the bottom right. The word \"ACERINOX\" is also in blue, matching the color of the circle.\n\n#### **Water stewardship**\n\n#### **GRI 3-3 / 303-1 / 303-2 / 303-3 / 303-4 / 303-5**\n\nWater, in addition to being a vital resource for life on this planet, plays a fundamental role in the steel industry.\n\nThe production of stainless steel and high-performance alloys requires a considerable volume of this natural resource, making its availability a key factor for Acerinox. The Company works to achieve efficient and responsible water management through initiatives such as measuring the water footprint and identifying the level of water stress at each facility.\n\nThe Group ensures water quality through internal and external laboratory analyses that provide information and parameters regarding matters like suspended solids, pH, alkalinity, iron, calcium, phosphorus, and aluminum content, among others.\n\nAcerinox identifies SDG 6 \"Clean water and sanitation\" to be one of the main Sustainable Development Goals and recognizes access to water as a human right. In line with this commitment to sustainability, the Company works in partnership with various stakeholders.\n\nAcerinox's commitment in water catchment areas will enable it to devise water sustainability strategies together with local players, such as launching projects involving water replenishment in natural ecosystems, improving water quality, and reusing waste water within catchment areas.\n\nThe Group provides all its employees with fully operational and safely managed WASH (Water Sanitation Hygiene) services at all sites. It also guarantees access to clean water for drinking, washing, and sanitation systems, ensuring staff health and safety.\n\nDuring the last four years, there have been no incidents related to water management.\n\n#### **\\_Key indicators**\n\n**GRI 303-3 / 303-4 / 303-5**\n\nImage /page/215/Picture/13 description: The image shows the number 7,422 in a bold, dark blue font. There is a short, horizontal orange line underneath the number 7.\n\n**7,422 4,876 2,547**\n\nWITHDRAWAL ML\n\nHARGE ML CON\n\nImage /page/215/Picture/17 description: The image shows the words \"WITHDRAWAL ML\", \"DISCHARGE ML\", and \"CONSUMPTION ML\" in a horizontal arrangement.\n\nImage /page/215/Picture/18 description: This is a wide shot of the Oresund Bridge, a combined railway and motorway bridge across the Oresund strait between Denmark and Sweden. The bridge is long and stretches far into the distance, with a series of concrete pillars supporting the roadway. The bridge also has a cable-stayed section with two tall towers. The water is calm and gray, and the sky is overcast.\n\n#### **\\_Relevant activities**\n\nImage /page/215/Picture/20 description: The image shows a stylized icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or achievement. The person and the podium are depicted with simple lines and a light purple color.\n\n| Milestones 2023                                                              | Challenges 2024                                                        |\n|------------------------------------------------------------------------------|------------------------------------------------------------------------|\n| Development of the water footprint model for the<br>stainless steel division | Development of water footprint model for the special<br>alloy division |\n| Completion of CDP Water questionnaire, obtaining a B<br>score                | Implementation of the water management policy                          |\n| Specific water withdrawal objective met                                      | Improvement of water footprint parameter calculation<br>processes      |\n\n{216}------------------------------------------------\n\nImage /page/216/Picture/1 description: The image shows the words \"Water footprint\" in a bold, purple font.\n\nAcerinox calculates its water footprint as a fundamental environmental parameter at all industrial facilities by measuring the volumes of water used and managed in its processes.\n\nThe water footprint model is based on the WFN (Water Footprint Network) methodology, which estimates the blue and gray water footprint of factories.\n\nThe water footprint allows for more precise traceability of different water flows so that facilities can understand their vulnerability to water scarcity and/or water quality decline.\n\nThis is especially significant in the case of facilities located in areas of high or extremely high water stress.\n\nIn parallel, the Group analyzes its facilities' areas of influence; it identifies the level of water stress of these areas based on the World Resources Institute (WRI) and updates the future projections of the hydrographic basins where it operates.\n\nBased on the classifications provided by this tool, Acerinox considers water-stressed areas to be those in which the ratio of total surface or ground water withdrawn per annum for various uses (civil, industrial, agricultural and livestock) and the total available supply of renewable water per annum is high (40-80%) or very high (>80%). The resulting information allows for comparisons to be drawn between the water required for production and availability in the country or catchment area, determines the relevance of the water risks posed in order to adopt appropriate measures, and facilitates dialogue with stakeholders. Each plant is assessed using the most geographically specific data available. This data, drawn from the Aqueduct Water Risk Atlas, currently four out of the 13 municipalities in which the Acerinox plants are located are in regions of high or very high water stress (Spain, South Africa and the US).\n\nThe impact and risk of each facility are unique, based on the local context.\n\nA climate risk analysis was also conducted in 2023, which included the risk of water stress. To assess these long-term risks (2030 and 2050), Acerinox considered the IPCC, RCP 2.6 and RCP 8.5 scenarios (for further information please refer to section 5.2 Eco-efficiency and climate change mitigation).\n\nFacilities at risk of high or extremely high water stress are already implementing water efficiency measures.\n\nThe Group is working from various angles: reducing water used in manufacturing processes; optimizing and making good use of raw and auxiliary materials; and treating and regenerating water for other uses or to be returned to nature. To that end, the reuse of water at the manufacturing plants is fundamental, as is increasing its possible uses, enhancing the processes that use water and tightening controls over water consumption in order to gain greater knowledge.\n\nImage /page/216/Picture/12 description: The image shows a close-up of a modern bridge structure against a clear blue sky. The structure is primarily white and consists of a thick, vertical support with evenly spaced, horizontal cables extending from it. The cables are also white and appear to be made of metal. The vertical support has a unique design with rectangular cutouts along its length, creating a pattern of light and shadow. The angle of the shot is from below, looking upwards, which emphasizes the height and scale of the bridge. The overall composition is clean and architectural, highlighting the geometric shapes and lines of the bridge design.\n\nImage /page/216/Picture/13 description: The image shows a light purple icon of a badge. The badge is round and has a star in the center. There are ribbons hanging from the bottom of the badge.\n\n**FEATURED CASE**\n\n#### **Global Stainless Steel Industry Gold Award in Sustainability. Wastewater reuse. Palmones**\n\nWater is a critical resource in the Group's operations. For this reason, Acerinox Europa is making significant efforts to minimize its water footprint.\n\nIn this area, the Company has made significant improvements in the reuse of wastewater for different uses, such as street cleaning, industrial cleaning with pump trucks and garden watering.\n\nThe first phase of the project achieved very good results, reducing water consumption by 400 cubic meters per week. The emissions generated by the handling and pretreatment of raw materials also fell.\n\n{217}------------------------------------------------\n\nImage /page/217/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, dark blue letters. The word is positioned inside of a dark blue circle that is open on the left side.\n\n#### **Water management efficiency improvement projects. NAS**\n\nIn 2023, several water management efficiency improvement projects were implemented at the NAS plant, resulting in a 3.3% reduction in water withdrawal intensity compared to 2022.\n\nThis significant improvement aids the corporate sustainability target to reduce relative water withdrawal intensity compared to 2015.\n\n#### **Water collection**\n\n#### **GRI 303-3**\n\nEach of the Company's facilities has water withdrawal control and monitoring systems.\n\nVolumes are accounted for daily through flow meters and verified annually by a third party. This monitoring is not only performed for production processes, but also to ensure compliance with water permit requirements.\n\nThe Acerinox Group is keenly aware of the importance of reducing water collection, including a specific KPI in this regard in its Strategic Sustainability Plan. Specifically, the stainless steel division plans to reduce specific water withdrawal by 20% by 2030 (compared to 2015).\n\nIn 2023, the stainless steel division's water withdrawal intensity fell by 3% compared to 2022, reaching the established annual target. The following graph shows the reduction path established for 2030 and the actual performance of this indicator.\n\n#### **\\_Water withdrawal - Stainless Division**\n\n#### **GRI 303-3**\n\nImage /page/217/Figure/13 description: The image is a line graph comparing the target and real water usage in the Stainless Steel Division. The y-axis represents water usage in m3 per ton of steel produced, ranging from 3.00 to 5.00. The x-axis represents years, from 2015 to 2030. The 'Target' line starts at 4.20 in 2015, decreases to 3.86 in 2021, slightly decreases to 3.80 in 2022, decreases to 3.74 in 2023 and remains at 3.74 in 2024, and decreases to 3.34 in 2030. The 'Real' line starts at 4.20 in 2015, decreases to 3.21 in 2021, increases to 3.56 in 2022, and decreases to 3.44 in 2023.\n\nAcerinox records the water collection source used for plant operations. Water volumes are taken from official and verified data and are measured daily by means of flow meters. The Acerinox Group uses various sources, the quality standards of which are certified by the supplier: surface water (main case), production water and third-party water (municipal water providers).\n\nDistribution of total water withdrawn\nby source: 7.422 ML/tons\n\nImage /page/217/Figure/16 description: The image is a donut chart showing the sources of water. Surface water accounts for 85.7%, rainwater accounts for 3.7%, third-party water accounts for 10.5%, and process water accounts for 0.1%.\n\nImage /page/217/Picture/17 description: The image shows a close-up of a modern building facade with a combination of blue vertical panels and white angled panels. The blue panels are arranged in a rhythmic pattern, creating a textured effect. The white panels are positioned at an angle, adding a dynamic element to the composition. The overall impression is one of contemporary architecture with a focus on geometric shapes and contrasting colors.\n\n{218}------------------------------------------------\n\n#### **\\_Water withdrawal - Stainless Division (ML)**\n\n#### **GRI 303-3**\n\n| ML                   | Total |                       |                   | Stainless             |                   | HPAs                  |                   |\n|----------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|\n| 2023                 | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |\n| Surface<br>water     | 6,364 | 3,877                 | 2,487             | 3,557                 | 2,487             | 320                   | 0                 |\n| Groundwater          | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Seawater             | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Process<br>water     | 5     | 5                     | 0                 | 5                     | 0                 | 0                     | 0                 |\n| Third-party<br>water | 782   | 596                   | 186               | 367                   | 186               | 229                   | 0                 |\n| Rainwater            | 271   | 0                     | 271               | 0                     | 271               | 0                     | 0                 |\n| Total                | 7,422 | 4,478                 | 2,944             | 3,929                 | 2,944             | 549                   | 0                 |\n\n#### **Water discharge**\n\n#### **GRI 303-2 / 303-4**\n\nWater discharges are a key environmental indicator for factory operations. Water volumes and water quality are monitored according to local regulatory requirements and process efficiency parameters.\n\nAll factories have treatment and neutralization plants for stabilization and the removal of contaminants prior to discharge. They also have secondary retention systems that prevent accidental spills and allow for effluent recovery.\n\nAll discharges from the facilities are checked regularly to ensure compliance with Emission Limit Values (ELVs) and other legal requirements.\n\n#### **Distribution of total water discharged by source:**\n\nImage /page/218/Figure/10 description: The image is a donut chart showing the percentages of different types of water. Seawater is 23.0%, third-party water is 6.5%, and surface water is 70.5%.\n\n**4,876 ML**\n\n{219}------------------------------------------------\n\nImage /page/219/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a light blue color. The word is partially encircled by a thick, dark blue arc that starts from the top left, curves around the word, and ends at the top right. The arc gives the impression of a globe or a stylized letter \"C\".\n\n#### **\\_Water discharge (ML)**\n\n#### **GRI 303-2 / 303-4**\n\n| ML                   | Total |                       |                   | Stainless             |                   | HPAs                  |                   |\n|----------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|\n| 2023                 | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |\n| Surface<br>water     | 3,440 | 3,440                 | 0                 | 3,439                 | 0                 | 1                     | 0                 |\n| Groundwater          | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Seawater             | 1,121 | 0                     | 1,121             | 0                     | 1,121             | 0                     | 0                 |\n| Third-party<br>water | 315   | 315                   | 0                 | 26                    | 0                 | 289                   | 0                 |\n| Total                | 4,876 | 3,755                 | 1,121             | 3,465                 | 1,121             | 290                   | 0                 |\n\n#### **Responsible use**\n\nResponsible water consumption is one of the fundamental pillars of the Acerinox Group's operations.\n\nManufacturing requires continuous, intensive cooling and water-intensive surface treatment processes.\n\nProcess efficiency and effluent reuse is a fundamental element of the facilities.\n\nThe Group's factories have neutralization plants and wastewater treatment plants (WWTP) that maximize the recirculation of effluents and reduce our water withdrawal intensity.\n\n### **Other environmental aspects**\n\n#### **GRI 305-7**\n\nIn line with climate change mitigation and environmental impact minimization, Acerinox focuses its efforts on improving the efficiency of its operations by monitoring and controlling the emission of pollutants by its processes.\n\n#### **\\_Key indicators**\n\n| 663<br>metric tons | 15<br>metric tons | 191<br>metric tons | 16<br>metric tons |\n|--------------------|-------------------|--------------------|-------------------|\n| NOx                | VOCs              | Particulate matter | SOx               |\n| t                  | 2023<br>Total     | Stainless          | HPAs              |\n| NOx                | 663               | 618                | 45                |\n| VOCs               | 15                | 15                 | 0                 |\n| Particulate matter | 191               | 191                | 0                 |\n| SOx                | 16                | 13                 | 2                 |\n\n{220}------------------------------------------------\n\nImage /page/220/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the word. The circle is not complete, with a gap at the top.\n\nImage /page/220/Picture/2 description: A long exposure shot shows a large bridge over water. The bridge is made of gray concrete and has orange arches. The water is calm and reflects the bridge. In the background, there is a city skyline. The sky is overcast and gray.\n\nImage /page/220/Picture/3 description: The image shows a light purple icon of a badge with a star in the center. The badge is round with small dots around the edge. A ribbon hangs down from the bottom of the badge.\n\n## **FEATURED CASE**\n\n#### **Control of particulate emissions. Palmones**\n\nThe Acerinox factory in Palmones (Spain) has implemented various environmental control measures aimed at reducing emissions of particulate matter and dust. Among others, the following stand out:\n\n- Installation of water misters and intensive use of the vacuum sweeper on internal roads\n- Modification of the smoke scrubber dust discharge system into trucks for management (sleeve system), using an airtight tank.\n- Enclosure of aerators in the melting shop, preventing leaks to the outside.\n- Improvements in the efficiency of melting shop fume exhaust systems.\n- New slag treatment plant in an enclosed building with coverage at potential dust generation points.\n\nAll these initiatives have led to a 65% reduction in the number of incidents detected by the immission monitoring system.\n\n### **Biodiversity**\n\n#### **GRI 3-3**\n\nThe Group helps preserve biodiversity by minimizing its environmental impact through increased recycling rates, reduced greenhouse gas emissions and efficient water management.\n\nAcerinox is committed to recycling 90% of its material by 2030. The increased use of scrap decreases the extraction of raw materials, such as ferro-alloys, reducing our land use, water, and air pollution impacts.\n\nThe stainless steel division has also set a target of a 20% reduction in the emissions intensity ratio by 2030 (baseline 2015). To this end, the company has a decarbonization roadmap. These measures contribute to improving the air quality of the ecosystems adjacent to the facilities.\n\nThe stainless steel division set the target of a 20% reduction in water withdrawal intensity by 2030 (baseline 2015). Acerinox implemented best available techniques to optimize the use of recycled water with a view to attaining Zero Waste Status at all its plants (100% reuse of water). Several of the Group's facilities have already implemented zerowaste measures.\n\nAware of the urgency of halting rapid species loss, the Company has undertaken an in-depth review of its commitment to strengthening the preservation of ecological diversity and minimizing its impact on flora and fauna.\n\n{221}------------------------------------------------\n\n## **5.3 Circular economy and sustainable products**\n\n#### **Circular economy**\n\n#### **GRI 3-3 / 306-1 / 306-2**\n\nIn a context of increasingly limited resources, the circular economy plays a crucial role in environmental preservation. Aware of this reality, Acerinox seeks to achieve the highest possible recyclability ratio, positioning itself as a leader in circular economy. In steel production, the Group uses scrap as its main raw material, reaching values of over 90% recycled material in process inputs, depending on the final specifications of the product.\n\nImage /page/221/Figure/5 description: The image shows a diagram of the life cycle of stainless steel. The diagram is circular, with the Acerinox logo in the center. The diagram begins with raw materials, which are transported by truck. The raw materials are then processed into scrap. The scrap is then melted in a melting shop. The molten metal is then hot rolled and cold rolled. The cold rolled metal is then formed into coils. The coils are then used to manufacture household appliances and kitchenware, transport vehicles, industrial equipment, construction materials, and food industry equipment. The diagram also shows that stainless steel is used in energy and environmental technology.\n\nThe Group is working to find more efficient methods to recover, recycle and reuse all kinds of metals and alloys during and at the end of the manufacturing process. The effectiveness and feasibility of each initiative is assessed.\n\nAs a result of the Company's commitment to circular economy, a Group-wide target has been set to recycle 90% of all waste generated by 2030. This target is monitored on a monthly basis by the sustainability managers of each factory and reviewed by the corporate sustainability team. Likewise, the Sustainability Committee monitors this target on a quarterly basis and, if necessary, takes any necessary measures.\n\nIn order to promote sustainable growth and the responsible use of resources, Acerinox has sustainability and responsible purchasing policies, accessible on the company website, which establish the Group's general principles in the procurement of goods and services, production, and distribution.\n\nAcerinox provides customers and other interested parties with Environmental Product Declarations (EPDs), where it offers quantitative, verified information on the environmental impact of different products for transportation, construction, engineering, the food industry, and energy and environmental technology.\n\nThis material, available on the company website, provides detailed information about products' environmental impact and estimate how they affect the life cycle of the structures or solutions being manufactured.\n\n{222}------------------------------------------------\n\n**98**\n\n#### **2023 Integrated Annual Report**\n\n#### **\\_Key indicators**\n\n**GRI 301-2 / 306-4**\n\n## **2,033,855 metric tons 80%**\n\nRaw materials from recycled material Recycled waste\n\nACERINOX participated in the \"First Conference on Circular Economy for Andalusian Industry,\" reaffirming its commitment to the circular economy, a fundamental pillar of the company's strategy to ensure sustainable growth over time.\n\n#### **\\_Relevant activities**\n\nImage /page/222/Picture/8 description: The image shows a light purple icon of a three-tiered structure. The structure has a rectangular base, a smaller rectangular middle tier, and a small rectangular top tier with three vertical lines extending upwards from it.\n\nImage /page/222/Picture/9 description: The image shows a winding path leading to a flag. The path is drawn with a light purple line and consists of several curves and bends. The flag is located at the end of the path, indicating the destination or goal. The path starts from the bottom left corner and ends at the top right corner.\n\n| Milestones 2023                                                                | Challenges 2024                                                                 |\n|--------------------------------------------------------------------------------|---------------------------------------------------------------------------------|\n| Obtaining CE certification for slag from the Algeciras<br>plant (various uses) | R+D+i studies for the valorization of slag in different<br>factories            |\n| Valorization and local uses of waste (slag, neutralization<br>sludge)          | Industrial application of slag as construction aggregate                        |\n| Scrap segregation plan at service centers                                      | Increase the value-added of scrap recovered at factories<br>and service centers |\n\n#### **\\_Raw materials (metric tons)**\n\n#### **GRI 301-1**\n\nThe Company is aware of the environmental impact generated by the extraction of raw materials, including soil degradation, water pollution, and biodiversity loss. For this reason, one of the lines of action of the Group's decarbonization strategy is to reduce the purchase of raw materials by increasing the use of scrap. In addition, the Company has implemented different initiatives such as the improvement of machinery, to minimize losses of the products that are manufactured, or the improvement of the AOD process, to reduce the consumption of chemical components.\n\n## **2,033,855 536,758 276,823 33,969 14,092**\n\n330,\nAlloys\n\n823\n\n33,90\nAcids\n\n9,909\nds\n\nRecycled material\\* Alloys Gases Acids Recycled acid\\*\\*\n\n\\*Recycled material is defined as purchased scrap, process and internal scrap, as well as metal recovered from slag and other recycled waste. \\*\\*Recycled acid: total amount of nitric and hydrofluoric acid recovered.\n\n#### **\\_Waste management**\n\n#### **\\_Waste generated, sorted by type of management and composition**\n\n#### **GRI 306-3 / 306-4 / 306-5**\n\nWaste is managed independently at each factory, complying with the legislative requirements of each location. At all of them, waste is monitored and traced by type using computer programs or internal monitoring. The data is then entered into a global tool for the entire Group, then reviewed and consolidated by the corporate sustainability team.\n\nAt some facilities, annual reports on hazardous and non-hazardous waste are prepared and submitted to the relevant governmental authorities.\n\nAlthough most of the waste generated by the Company is recycled, other waste is also generated for landfill. Landfilled waste is managed by an authorized manager in accordance with the regulations applicable in each country.\n\nImage /page/222/Picture/28 description: The image shows a close-up of several metal rods or pipes arranged diagonally. The rods are shiny and reflect light, creating a pattern of highlights and shadows. The background is blurred, which makes the rods stand out. The rods are all parallel to each other and are evenly spaced.\n\nRecycled\n\nRecycled waste\n\n{223}------------------------------------------------\n\n| t                       | 2023      | %      | 2022      | %      | 2021      | %      |\n|-------------------------|-----------|--------|-----------|--------|-----------|--------|\n| Total waste             | 1,298,793 |        | 1,572,090 |        | 1,669,375 |        |\n| Landfill                | 262,827   | 20.24% | 333,534   | 21.22% | 471,076   | 28.22% |\n| Recycled/<br>Recovered  | 1,035,966 | 79.76% | 1,238,556 | 78.78% | 1,198,299 | 71.78% |\n| Total non-<br>hazardous | 1,182,735 | 91.06% | 1,432,963 | 91.15% | 1,521,645 | 91.15% |\n| Landfill                | 203,578   | 17.21% | 252,595   | 17.63% | 385,541   | 25.34% |\n| Recycled/<br>Recovered  | 979,157   | 82.79% | 1,180,368 | 82.37% | 1,136,104 | 74.66% |\n| Total<br>hazardous      | 116,058   | 8.94%  | 139,127   | 8.85%  | 147,730   | 8.85%  |\n| Landfill                | 59,250    | 51.05% | 80,939    | 58.18% | 85,535    | 57.90% |\n| Recycled/<br>Recovered  | 56,809    | 48.95% | 58,188    | 41.82% | 62,195    | 42.10% |\n\nIn 2023, the Group worked towards the goal of increasing its waste recycling by 2030, employing its best practices at its various factories and managing to recycle almost 80% of the waste generated, increasing the percentage of waste recycled compared to previous years.\n\nImage /page/223/Picture/3 description: The image shows a close-up of a building under construction. The building is made of steel beams and columns, and the beams are connected to the columns with bolts. The steel is painted gray, and the sky is visible through the open framework of the building.\n\nImage /page/223/Figure/5 description: The image is a graph comparing \"Target\" and \"Real\" values over time, from 2021 to 2030. The y-axis represents percentage values, ranging from 25.00% to 100.00%. The \"Target\" values are as follows: 79.20% in 2021, 80.40% in 2022, 81.60% in 2023, 82.80% in 2024, and 90.00% in 2030. The \"Real\" values are: 71.50% in 2021, 78.80% in 2022, and 79.76% in 2023.\n\n{224}------------------------------------------------\n\nImage /page/224/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right.\n\nAcerinox operates by maximizing the use and valorization of generated waste. The Group's production centers have environmental management systems that include the following measures:\n\n- Education and awareness-raising for employees and contractors on environmental impact and waste segregation.\n- Employee training in handling hazardous substances.\n- Segregation, labeling, storage, handling, and transportation of waste and hazardous substances.\n- Stabilization, neutralization, and sedimentation plants for liquid effluents.\n- Heat recovery boilers with combustion, steam generation, and electric power.\n\nImage /page/224/Picture/8 description: The image shows a logo with a badge icon on the left, a vertical line in the middle, and the words \"FEATURED CASES\" on the right. The badge icon is a circle with a star in the center and a ribbon at the bottom. The words \"FEATURED CASES\" are in a bold, sans-serif font.\n\n#### **\"Sludge To Brick\" project. Bahru**\n\nBAHRU shipped 1,071 metric tons of acid neutralization sludge for a waste valorization project that transforms sludge from the neutralization plant into unfired bricks used for ornamental building.\n\nThe \"Sludge to Brick\" project was awarded the Ecological Product label in Malaysia and registered with MyHIJAU Mark, the Malaysian government's official green recognition for environmentally-friendly products and services.\n\n#### **Valorization of WWTP sludge. NAS**\n\nThe NAS plant in Kentucky (US) managed to reduce waste sent to landfills from the WWTP by more than 60%. This sludge was reused as backfill aggregate in mines.\n\nImage /page/224/Picture/14 description: The image shows a close-up of a perforated metal surface. The metal is a light blue-gray color, and it is covered in small, oval-shaped holes. The holes are arranged in a regular pattern, and they are all the same size. The metal surface is slightly curved, and there are some shadows on it. The overall effect is one of texture and pattern.\n\n{225}------------------------------------------------\n\n## **Sustainable solutions**\n\nAcerinox offers a wide variety of efficient and durable solutions for customers who manufacture all kinds of products that are essential in everyday life, products that are a benchmark in economy and that comply with the so-called three Rs rule of sustainability: reduce, reuse, recycle. For this reason, the materials manufactured by the Group stand out for their lower environmental impact, both in their production and in their processes and useful life, as well as for their lower carbon footprint.\n\nImage /page/225/Figure/4 description: The image is an infographic illustrating various applications across different sectors. The sectors include household appliances and kitchenware, energy and environmental technology, the food industry, transport, construction and infrastructure, and industrial equipment and engineering. Each sector is represented by relevant imagery and a list of specific applications or components within that sector. For example, the household appliances and kitchenware sector includes refrigerators, washing machines, microwaves, ovens, kitchen sinks, extractor hoods, catering, and kitchens. The energy and environmental technology sector features power plants, while the food industry includes storage, barrels, food industry, and agri-food. The transport sector lists car, railway, aerial, maritime, and aerospace transport. Construction and infrastructure covers facades, coatings, elevators, structures, climate and heating, swimming pools, and street furniture. Finally, industrial equipment and engineering includes water, energy and petrochemical, batteries, pharmaceutical and medical, and trash and cement.\n\n{226}------------------------------------------------\n\nImage /page/226/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The text is positioned inside a blue circle that is open on the left side.\n\n#### **Process and product certifications and controls**\n\n#### **GRI 416-1**\n\nIn addition to the legal requirements applicable in each country, all the Group's factories are subject to strict quality and environmental controls. They also have, as a whole, environmental management systems in line with the ISO 14001:2015 standard. Similarly, each subsidiary has established standards that exceed legal requirements in areas such as quality, safety, and the environment.\n\nMoreover, Acerinox undergoes annual external audits of the Group's information systems, both at the Parent and at all subsidiaries. These are carried out both by external entities and by customers.\n\n#### **LINKS**\n\n#### **ACX Europa:**\n\nhttps://acerinox.com/es/acerinox/fabricas/acer inox-europa/certificados-acerinox-europa/\n\n#### **NAS:**\n\nhttps://www.northamericanstainless.com/quali ty/qms-iso/\n\n#### **Roldán:**\n\nhttps://acerinox.com/es/acerinox/fabricas/rold an/certificados-de-roldan/\n\n#### **Inoxfil:**\n\nhttps://acerinox.com/es/acerinox/fabricas/inox fil/certificados-de-inoxfil/\n\n#### **Columbus:**\n\nhttps://www.columbus.co.za/products/certificationmarkings.html\n\n**Bahru:** \n\nhttps://bahrustainless.com/en/products/certification/\n\n#### **VDM Metals:**\n\nhttps://www.vdm-metals.com/es/\n\nImage /page/226/Picture/21 description: The image shows a close-up of a stack of metal bars. The bars are arranged in parallel, with small gaps between them. The bars are made of a dark metal, and they have a rough, textured surface. The bars are stacked on top of each other, and they are slightly offset, creating a staggered effect. The image is well-lit, and the metal bars are in focus.\n\n{227}------------------------------------------------\n\n## **Technological innovation**\n\n#### **Investment in fixed assets**\n\nInvestments made in 2023 in both property, plant, and equipment and intangible assets amounted to EUR 175 million. These investments include both the acquisition and installation of new equipment and recurrent maintenance investments. In many cases, they are investments to improve efficiency and productivity, but they are also of a strategic nature and geared towards sustainability, as they entail reductions in energy consumption.\n\nIn the case of Acerinox Europa, the total sum of investments (including maintenance) amounts to EUR 39 million, related to improvements and expansions made in several production lines.\n\nInvestments made by North American Stainless amount to EUR 73.9 million, of which EUR 21 million correspond to the investment plan approved at the beginning of this year and EUR 27 million to recurring maintenance investments.\n\nIn the case of Columbus Stainless, investments for the year amounted to EUR 21.2 million. Finally, the VDM Group invested EUR 27.2 million over the year.\n\nThe December 2023 board meeting also approved an EUR 67 million investment plan for the high-performance alloys division at its German plants in Unna, Altena and Werdohl, which will enable it to gradually increase its production capacity in precision strips, bars, and wires, as well as lifting sales by 15%. The planned investments include the expansion of three remelting furnaces, the upgrade of an annealing and pickling line, another flaw detection line for bars, and a sprayer for the production of stainless-steel and highperformance-alloy powders for additive manufacturing.\n\n#### **R&D&i**\n\nInnovation is one of Acerinox's corporate values, and a source of improvement in order to compete in a market as globalized and competitive as the stainless steel market.\n\nSince 2021, Acerinox has an innovation and technology committee. Led by the Group's CEO and comprising the heads of various business areas, the aim of this Committee is to review the Company's capabilities, define the R&D&i strategy, provide sufficient funding, identify the risks that could affect the Group's operations and define long-term objectives.\n\nThree work groups were also created, focusing their efforts on the development of materials, improvement of production processes, implementation of new processes, and the promotion of innovation processes, which includes, inter alia, the management of Group patents and push for sustainable processes. Some examples of projects underway in 2023 are related to the use of stainless steel for renewable hydrogen applications.\n\nThis exchange of experiences between the Group's business units is open to the contribution of any employee with the aim of making the most of the extensive know-how of Acerinox staff.\n\nCollaboration with public and private research bodies is essential, since almost half of the investments in this field are carried out in partnership with entities, universities and research centers of this nature.\n\nMore than 40 people in the Group, distributed across different production plants, dedicate their knowledge and efforts to research and development work, without counting the staff who, at the laboratories of each Group plant, work on searching for new alloys and improving the properties of the current ones. During 2023, collaboration on R&D tasks between the different Group units has deepened, resulting in an increase in knowledge generation synergies and an increase in the value-added of our products.\n\nAcerinox also promotes the participation of all employees in this field with the annual Rafael Naranjo Awards, aimed at recognizing workers who have stood out for their innovative projects in the areas of safety, the environment and quality.\n\nImage /page/227/Picture/16 description: The image shows a close-up of a modern building facade with a pattern of vertical metal beams and glass windows. The beams are light gray and run parallel to each other, creating a sense of verticality. The windows are dark blue and reflect the sky, adding depth and contrast to the image. The overall effect is one of sleekness and sophistication.\n\n{228}------------------------------------------------\n\nImage /page/228/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle that is open on the right side.\n\nProjects in 2023 included the AUSTRONG project, a European project carried out with Italian, Spanish and Finnish entities, which aims to develop a new steel to withstand the most demanding hydrogen working conditions, even in a liquid state. Related to hydrogen, at the national level, the H2 EPA, FORNAX, and HYADES projects, focused on the development of stainless steel for its safe storage and transport and its use as fuel in heating furnaces, should also be highlighted. Also worth mentioning at the national level is the CERES project. Led by Acerinox Europa, this project aims to evaluate the development of a **circular economy** based on mineral waste from iron and steel plants. The project analyzes the main challenges of these materials and their recovery in a safe legal environment that is sustainable in the long term.\n\nIn addition, the \"Materials for the future\" initiative brings together a selection of 20 professionals from various disciplines of the Acerinox Group with representatives from the different factories (Acerinox, NAS, Columbus, Bahru and VDM). The goal of this initiative is to work together on possible scenarios that may arise in the future, anticipating emerging market trends. This promotes both synergies within the Group and the correct alignment with the company's strategy. This program includes specific initial training and a final challenge in which each working group will present the conclusions of their study to management.\n\n### **\\_2023 R&D&i investments and expenditure**\n\n**Group total:**\n\n## **EUR 17,652,563**\n\nImage /page/228/Figure/7 description: This bar chart titled \"Divisions\" shows the values for stainless steel and high-performance alloys. The value for stainless steel is €13,360,997, and the value for high-performance alloys is €4,291,566.\n\nImage /page/228/Picture/8 description: A high-angle, close-up shot captures a section of a metal railing, likely part of a staircase or barrier. The railing is constructed from a combination of polished silver and dark gray metal components. The silver elements consist of smooth, rounded bars that run horizontally, providing a sleek and modern aesthetic. These bars are supported by vertical posts and angled supports made of dark gray metal, which add structural integrity and a contrasting visual element. The gray metal parts are connected with visible bolts and fasteners, giving the structure a somewhat industrial appearance. The background consists of gray paving stones or tiles, suggesting an outdoor or public space. The lighting is soft and diffused, creating subtle shadows and highlights on the metal surfaces, enhancing their texture and form.\n\n{229}------------------------------------------------\n\nImage /page/229/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue, circular shape. The word is in a lighter color, possibly white or a light shade of blue, which contrasts with the darker blue of the surrounding circle. The circle is not fully closed, leaving a gap at the bottom.\n\n#### **CEDINOX**\n\nThrough its commitment to the dissemination of knowledge, Acerinox supports and promotes the work of CEDINOX, the Spanish Association for the Research and Development of Stainless Steel.\n\nThis not-for-profit association bases its activity on four fundamental pillars: research, advice, dissemination and training on stainless steels. Founded in 1985, it collaborates actively with the main Acerinox factories, users and universities.\n\nAmong the Association's research activities, worthy of note is its participation in different projects, the search for new applications and the detection of opportunities for the development of this material in sectors as varied as industry, energy, architecture and transport, to name a few.\n\nCEDINOX advises companies and professionals on the correct selection and maintenance of stainless steels, as well as their transformation and cleaning. It has an extensive library on its website and responds to the technical queries through its online channel. The association has also been involved in international reference projects such as the Hong Kong Macao bridge, the Sagrada Familia, the Santiago Bernabeu stadium and the extension of the port of Monaco, as well as different projects related to renewable energies and the industry in general. CEDINOX also participates and collaborates in the drafting of various regulations on stainless steel, such as the recent building code. Likewise, it stands up for steel's advantages in different forums.\n\nThe preparation of numerous technical documents on stainless steels, together with its magazine \"Acero Inoxidable\", is an excellent way of making the material known among professionals and users. CEDINOX also translates technical documentation into Spanish, positioning the company as a leading source of information on stainless steel in Spanish. Its participation in fairs such as the Stainless Steel World Exhibition and Conference in Maastricht, the Metal Madrid Fair and the Tube and Wire Fair in Düsseldorf allows CEDINOX not only to know the market and the sector in depth, but also to take part in lectures and forums. It also collaborates in activities from the World Stainless (International Stainless Steel Forum) and its working groups. Its growing presence on social media such as LinkedIn, Instagram, and YouTube, is another way of bringing the material closer to all kinds of audiences. The association's initiatives are not limited to Spain, as it is also operates globally through International Advisory Centers (IACs).\n\nAmong the activities with the greatest social impact are, without a doubt, the trainings carried out at universities and companies. In 2023, it offered a total of 35 courses at various Spanish universities - including two at high schools - in order to make stainless steel more familiar to almost 1,500 engineering and architecture students, 95 high school students, 74 university professors and 8 high-school teachers. Courses have also been held at 4 companies, with a total of 42 attendees.\n\nIt has a very close relationship with universities and the main research centers, and as a result of this link, the Acerinox Award was created for the best university engineering or architecture project related to stainless steels, already in its 7th year.\n\nIn short, the association's work supports the stainless steel sector by connecting professionals, seeking out and promoting the various synergies that may arise.\n\nhttps://www.cedinox.es/en/cedinox/que-es-cedinox/\n\nImage /page/229/Picture/12 description: The image shows a low-angle view of a modern building with a curved glass facade. The building's design features a series of interconnected glass panels that create a wave-like pattern against the sky. The sky is visible through the glass, with a gradient of light blue to white, suggesting a clear or slightly overcast day. The building's structure is partially visible, with the framework supporting the glass panels adding depth and dimension to the image. A purple rectangle is in the upper right corner.\n\n{230}------------------------------------------------\n\nImage /page/230/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside a partial circle, also in dark blue, that curves around the top and right side of the word. The background is white.\n\n## **5.4 Committed team, culture, diversity, and safety**\n\nAcerinox's culture includes its mission, vision, and values with guidelines and policies for people management and, specifically, the Group's commitment as a leading employer in its industry.\n\nIts priority is to attract and retain the best talent, promoting and implementing measures that promote equal opportunities, diversity, and inclusion of all professionals.\n\n#### **Attracting and retaining talent**\n\n#### **GRI 3-3**\n\nThe Group's selection and promotion policy establishes the basic principles of action deployed at all its subsidiary companies.\n\nAcerinox, with its presence on five continents, offers qualified employment opportunities and prospects for professional development and growth. It fosters a work environment based on trust and ensures stable, high-quality, safe, and healthy jobs.\n\n#### **\\_Key indicators**\n\n#### **GRI 2-7 / 404-1 / 404-3**\n\n**8,229 73.52** Employees h training/employee \\*The staff figure in this Appendix does not include 10 members of senior management.\n\nImage /page/230/Picture/12 description: The image shows a curved structure made of repeating geometric shapes, possibly squares or rectangles, creating a pattern that leads the eye towards a bright, light blue sky visible at the top of the frame. The structure appears to be part of a building or an architectural installation, with the geometric shapes casting shadows that add depth and texture to the overall design.\n\n#### **\\_Relevant activities**\n\nImage /page/230/Picture/14 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or success. The person is a simple stick figure, and the podium is also depicted in a minimalist style with three rectangular blocks of varying heights.\n\n## **Milestones 2023 Challenges 2024**\n\nCompletion of the management by objectives (MBO) policy Consolidation of the Group's positioning in a culture of roll-out for the entire workforce and its inclusion in the target-based variable remuneration.\n\nrecognition and pay for performance.\n\n| Inclusion of women executives or women with high<br>potential in the Progress-Promotion programs rolled out by<br>CEOE-ESADE.                                                                                                | Raising awareness of female leadership in different socio-<br>cultural environments to support female talent attraction<br>in the industry.                                                                                     |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Carrying-out of various publicity initiatives, such as \"Get<br>to Know Stainless Steel.\"                                                                                                                                     | Strengthen internal and overall communication through<br>digital transformation.                                                                                                                                                |\n| Implementation of measures to continue strengthening<br>leadership and professional development with Acerinox's<br>development plans, continuing with the \"Ignite Next<br>Generation\" and the “Leadership Academy” programs. | Extend the \"Leadership Academy\" program to the entire<br>Acerinox Group and strengthen our know-how, best<br>practices, and synergies across factories within the Group<br>through technology, training, and knowledge sharing. |\n| Appraising all the organization's job positions under the<br>certified system.                                                                                                                                               | Improve effectiveness, efficiency, and decision-making<br>through digital systems and tools for people management.                                                                                                              |\n| Establishment of initiatives and roadmap to comply with<br>parity regulations of the board of directors and the<br>Management Committee.                                                                                     | Continue to enhance our leadership in diversity, equality,<br>and inclusion and comply with the principle of parity.                                                                                                            |\n\n{231}------------------------------------------------\n\nImage /page/231/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, enclosed within a blue circle. The circle is not fully closed, with a gap at the bottom.\n\nAs of December 31, 2023, Acerinox had a global staff of 8,229 professionals, 33% (2,660 people) of whom work in Spain.\n\n| Acerinox | Acerinox | Bahru | Columbus | Inoxfil | NAS   | Roldán | VDM   | Subsidiaries and<br>service centers | Total |\n|----------|----------|-------|----------|---------|-------|--------|-------|-------------------------------------|-------|\n| Europa   | S.A.     |       |          |         |       |        |       |                                     |       |\n| 1,746    | 114      | 427   | 1,248    | 96      | 1,606 | 361    | 2,047 | 584                                 | 8,229 |\n\n\\*The staff figure in this appendix does not include 10 members of senior management.\n\nAgainst the current transformation and uncertainty backdrop, the Group's commitment to its employees can be observed in its efforts to safeguard jobs and in the high percentage of permanent employment contracts (97%).\n\nImage /page/231/Figure/6 description: The image is a bar graph titled \"N° employees\" showing the distribution of the workforce by gender and type of contract. The x-axis shows the years 2021, 2022, and 2023. The y-axis shows the number of employees, ranging from 0 to 10,000. For 2021, the number of women employees is 1,039 and the number of men employees is 7,089. For 2022, the number of women employees is 1,041 and the number of men employees is 7,083. For 2023, the number of women employees is 1,093 and the number of men employees is 7,136.\n\n#### **GRI 2-7**\n\nImage /page/231/Figure/8 description: The image contains two donut charts. The chart on the left is titled \"Number of employees by type of contract\". It shows that 97% of employees have indefinite-term contracts and 3% have temporary contracts. The chart on the right is titled \"% Employees\". It shows that 86.7% of employees are men and 13.3% are women.\n\nAcerinox is implementing initiatives to develop flexibility, foster the hiring of highly-skilled professionals and young university graduates (e.g. \"Commercial Graduate Program\"), which brings young people onto staff, ensures that knowledge is transferred and increases the presence of women (13.28%).\n\n#### **\\_Changes over time in workforce**\n\n{232}------------------------------------------------\n\nImage /page/232/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in bold, blue sans-serif font. The word is positioned within a blue circle, which appears to be a thick ring. The background is white.\n\nSome of the initiatives include international internships for students and recent graduates, the Group's collaboration agreements with more than 30 universities and training centers to bring in new talent, renew and extend knowledge, and facilitate generational coexistence.\n\nIn parallel, the Group continues to increase its presence at universities by participating at jobs fairs in major international locations.\n\nThe Company promotes a training model that is adapted to the needs of each job position in order to enhance performance. The number of training hours per employee has increased significantly with respect to the prior year (73.52 hours).\n\nToday's environment is complex, changing and digitalized, and requires quick adaptation to new challenges. The industry is in continuous transformation, which requires continuous learning about the digital context, together with the use of agile methodologies to train professionals. Acerinox is therefore committed to continuing to develop the technical and managerial skills of all our employees.\n\nImage /page/232/Picture/6 description: The image shows a low-angle view of two modern buildings with glass facades against a clear blue sky. The building on the left has a unique, spiraling design, while the building on the right has a more conventional, curved shape. The glass reflects the sky, creating a sense of openness and height. The composition emphasizes the architectural details and the contrast between the two buildings.\n\nImage /page/232/Figure/7 description: The image shows the text \"\\_Hours of training per year per employee\".\n\nImage /page/232/Figure/8 description: The image is a bar chart titled GRI 404-1. The x-axis is labeled 'Year' and shows the years 2021, 2022, and 2023. The y-axis ranges from 0 to 150 in increments of 25. There are six categories of data: Director, Analyst, Administrative staff, Manager, Specialist, and Operator. In 2021, the values are 9 for Director, 15 for Analyst, 14 for Administrative staff, 22 for Manager, and 71 for Operator. In 2022, the values are 7 for Director, 26 for Analyst, 17 for Administrative staff, 23 for Manager, and 75 for Operator. In 2023, the values are 11 for Director, 30 for Analyst, 31 for Administrative staff, 26 for Manager, 29 for Specialist, and 132 for Operator.\n\n## **Leadership and global positioning initiatives**\n\nThe Acerinox Group's leadership in the industry is based on promoting talent development, because the Acerinox of the future must be based on the commitment and involvement of its employees.\n\nIn 2023, the \"Ignite Next Generation\" program, our executive program for the Group's future leaders, drew to a close. The participants presented major advances in the implementation of their innovation projects in face-to-face meetings with members of senior management in the United States, South Africa, and Spain.\n\nThe NAS factory served as a pilot for the launch of the new \"Leadership Academy\" program, aimed at the entire chain of middle managers and team managers at production facilities. The program covered various matters, from communication skills and effective feedback to problem solving, teamwork, and more.\n\nIn 2023, the Group completed the full implementation of the Management by Objectives program for the entire target group (a total of approximately 1,000 employees), which represents a qualitative and quantitative leap in individual and global performance. In this way, individual objectives contribute to the Company's strategic targets. This program structures the variable compensation policy based on individual and company performance.\n\n{233}------------------------------------------------\n\nImage /page/233/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not a solid line but appears to be made of a thicker line that gives the impression of depth.\n\n### **Talent attraction and retention initiatives**\n\n#### **GRI 401-2**\n\nIn terms of attracting young talent, in 2023, participants in our programs for recent graduates developed a continuousimprovement project that they presented to management. This experience allowed them to gain business knowledge and improve their analytical, communication, and management skills, as well as gain exposure and visibility at all levels of the organization.\n\nIn addition to individual development plans, the \"Excellence Talent Program,\" which helps our professionals in their development, has been continued. This program also fosters alignment with Management by Objectives and therefore with the Company's strategy to ensure the successful performance of people and the business.\n\nAlso, during the year, all the Company's job positions were evaluated under a certified system, which allows for the consolidation of the organizational structure and the provision of greater transparency in all people management processes.\n\nAdditionally, the company offers a range of employee benefits, including life insurance, health insurance, disability and invalidity coverage, a pension fund, travel allowance, scholarships for employees and their children, disability benefits, death benefits, school and daycare subsidies, meal subsidies and parental leave.\n\n#### **Communication initiatives**\n\nDuring 2023, the \"Acerinox Insights\" sessions have continued through regular talks given by the top managers in different areas to all Group employees. In these sessions, the company's strategy in terms of sustainability, digital transformation, product, business, financial results, and production processes were presented.\n\nLikewise, the different specific Management Committees have strengthened strategic communication with their teams with the aim of reaching all levels of the organization to generate greater overall alignment, together with the improvement of communication channels in the production centers through digital tools.\n\nA case in point is the \"Get to Know Stainless Steel\" initiative at NAS, our factory in Kentucky (USA), where bimonthly online information sessions are held for the entire workforce on matters related to the product and the manufacturing process.\n\n#### **Collective bargaining**\n\nThe Group has collective bargaining agreements in force in all production centers, maintaining an open, fluid, and cooperative dialogue with the workers' representatives . Issues related to working conditions and health and safety, among others, are addressed. Meetings with workers' representatives are held regularly or whenever required to address a specific issue.\n\n#### **Employee satisfaction**\n\nIn 2023, various measures were implemented to improve the working environment and employee satisfaction.\n\nThe initiatives that have been implemented include everything from flexibility measures that help with work-life balance and co-responsibility to measures that have improved communication and collaboration between different teams.\n\nThe various team-building initiatives used sustainable values, promoting teamwork and effective communication between different departments.\n\nAdditionally, an Innovation Committee has been created for the company's departments to collect all suggestions for continuous improvement through different channels accessible to all workers, providing continuity and supporting implementation.\n\nWe continue to position ourselves as a leading employer in all our business units through various certifications such as EcoVadis. In this regard, the Great Place To Work certification of our high-performance alloys division, VDM Metals in Germany, is noteworthy.\n\nAdditionally, as part of the actions aimed at employee satisfaction, Acerinox has continued with its Scholarship Policy, offering university scholarships every year for the children of our employees in order to encourage their personal and professional development.\n\n{234}------------------------------------------------\n\n## **Equality, diversity, and inclusion**\n\n#### **\\_Relevant activities**\n\nImage /page/234/Picture/3 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or success. The person is a simple line drawing, and the podium is also depicted with simple lines, suggesting a minimalist or symbolic representation of achievement.\n\nImage /page/234/Picture/4 description: The image shows a winding path leading to a flag. The path is drawn with a light purple line and consists of several curves and bends. The flag is located at the end of the path, indicating the destination or goal. The path starts from the bottom left corner and ends at the top right corner.\n\n| Milestones 2023                                                                                                  | Challenges 2024                                                                                                    |\n|------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|\n| Monitoring and evaluation of the equality plans in force<br>(91% of execution).                                  | Complete the initiatives agreed in the equality plans.                                                             |\n| Provision of more impetus to female leadership initiatives<br>(progress, promotion and women of steel programs). | Comply with the new legislation on parity in<br>management bodies and management committees.                       |\n| Female leadership initiative with involvement in specific<br>development tasks.                                  | Promote an awareness campaign for comprehensive<br>protection against harassment and violence in all its<br>forms. |\n\nThe Equality, Diversity, and Inclusion Policy, accessible on the Acerinox company website, sets out the Group's basic principles in this area, which are implemented across all Group companies. It includes management procedures to prevent all kinds of discrimination and promote diversity.\n\nAcerinox continues to develop various initiatives in place to promote the participation of women, especially at professional levels and for positions in which women are under-represented.\n\n#### **\\_Key indicators**\n\n#### **GRI 2-7 / 404-1**\n\n**13.28**\n\n## **13.28 % 91% 259**\n\nWomen\n\nWomen Equality plan actions completed disabilities Employees with\n\nImage /page/234/Picture/15 description: The image shows a low-angle view of two modern skyscrapers with glass facades. The buildings are positioned close to each other, creating a narrow gap through which the sky is visible. The glass reflects the sky and surrounding buildings, creating a shimmering effect. The buildings have a sleek, modern design with clean lines and sharp angles. The overall impression is one of height, grandeur, and technological advancement.\n\nThe percentage of women in the workforce is up slightly on the previous year to represent 13.28% of the entire Acerinox staff. If operators are removed from the equation, women represent 32.76% of the workforce.\n\n#### **\\_Women in the workforce (%)**\n\n#### **GRI 2-7**\n\nImage /page/234/Figure/19 description: The image is a bar chart showing the percentage of women in 2021, 2022, and 2023. In 2021, the percentage of women was 12.80%. In 2022, the percentage of women was 12.81%. In 2023, the percentage of women was 13.28%.\n\nImage /page/234/Figure/21 description: The image shows a line graph with data points for the years 2021, 2022, 2023, 2024, and 2030. The y-axis represents percentages. The data points are as follows: 12.80% in 2021, 12.81% in 2022, 13.08% and 13.28% in 2023, 13.53% in 2024, and 15.00% in 2030.\n\n{235}------------------------------------------------\n\nAcerinox reviewed its target of adding women to the workforce, setting a target of 15% by 2030.\n\nAcerinox has equality plans negotiated with the representatives of workers at all the Group's companies in Spain while continuing to promote specific initiatives adapted to the reality of each country where it operates.\n\nIn 2023, 91% of the measures established in the equality plans were carried out, compared to 75% in 2022. Among them, various initiatives taken by suppliers and providers are noteworthy, as well as those related to equality, communication, and awareness-raising.\n\nIn this regard, the unbiased assessment of all job positions is of particular significance, and it is based primarily on the factors of competence, responsibility, and problem-solving ability, as well as their contribution to the business. This initiative ensures that positions of equal value are compared regardless of their occupants, co-responsibility measures can be monitored, and so on. With these projects, Acerinox has facilitated the progressive development of the incorporation of women to the Group, reaching 13.28%.\n\nAcerinox manages diversity and non-discrimination arising from any circumstance of a personal or social nature, through the code of conduct, the general equality, diversity and inclusion policy, the general human rights policy, and the general selection and promotion policy, taking into account the specific conditions of all the locations where it operates which, due to their geographic dispersion, present major cultural differences. Specifically, it fosters the workplace inclusion of people with different abilities. As of 2023, the Group had 259 employees with some form of disability (2022: 256 employees).\n\nAcerinox's remuneration model promotes fair and transparent pay that is not skewed by any discriminatory or gender-based bias. The pay gap between men and women stood at 9.2% in 2023, which is down 5.46% with respect to the previous year. This difference is primarily due to the later addition of women to the workforce and their under representation more broadly in the industry. These factors have an adverse effect on women in terms of receiving salary items associated with concepts such length of service, experience, specialization or shift work.\n\nIn 2023, total remuneration paid to members of the board of directors was EUR 4,167 thousand. The four female members of the Board were paid EUR 600 thousand. Remuneration to the senior management team, excluding the CEO, totaled EUR 12,044 thousand. At the Annual Shareholders' Meeting held on May 23, 2023, the directors' remuneration policy was endorsed by 90.67% of the votes.\n\nAcerinox supports the work-life balance and well-being of its employees through flexibility measures and social benefits such as life insurance, medical insurance, flexible working hours, intensive working days, and remote work, among others.\n\nOver the course of 2023, 305 employees took maternity and paternity leave, after which return-to-work (99%) and retention rates remained high (88%).\n\nImage /page/235/Picture/10 description: The image shows a low-angle view of several tall buildings with glass facades, creating a modern and urban architectural scene. The buildings are angled towards the center of the frame, converging towards a patch of blue sky with scattered clouds visible between the structures. The glass reflects the sky, adding depth and a sense of openness to the composition. The overall impression is one of height, scale, and contemporary design.\n\n## **CEO for Diversity**\n\nBernardo Velázquez, the company's CEO, has joined the CEO Alliance for Diversity backed by the Adecco Foundation and the CEOE Foundation. This initiative's mission is to unite companies around a common and innovative vision of diversity, equity, and inclusion (DEI), as well as to accelerate the development of strategies that contribute to business excellence, the competitiveness of talent, and the reduction of inequality and exclusion in Spanish society.\n\nImage /page/235/Picture/13 description: The image shows the logo for CEO x LA DIVERSIDAD. The word \"CEO\" is in large, bold, black letters on the top line. To the right of \"CEO\" is a teal-colored symbol that looks like two intertwined infinity symbols. To the right of the symbol are the letters \"LA\" in black. On the second line, below \"CEO\", is the word \"DIVERSIDAD\" in large, bold, black letters.\n\n{236}------------------------------------------------\n\nImage /page/236/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The text is positioned to the left of a circular shape, which is also in dark blue. The circular shape appears to be a stylized representation of a globe or a ring, with a thick outline and a hollow center.\n\n## **Health and safety**\n\n**GRI 403-1 / 403-2 / 403-3 / 403-4 / 403-5 / 403-6 / 403-7 / 403-8 / 403-9 / 416-1**\n\n#### **\\_Relevant activities**\n\nImage /page/236/Picture/5 description: The image shows a line drawing of a person standing on a podium with their arms raised in a gesture of victory. The person is drawn with simple lines, and the podium has three levels. The drawing is in a light purple color.\n\n|   | 1 |\n|---|---|\n|   |   |\n|   | O |\n|   |   |\n| 0 |   |\n\n### **Milestones 2023 Challenges 2024**\n\n| A significant reduction in the Group's accident rates: 24%<br>LTIFR and 18.5% TRIR            | Accident performance improvement pathway. TIR<br>reduction target -26% compared to 2023 |\n|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|\n| ISO 9001, 14001 and 45001 certification of our main<br>production centers                     | Consolidation of HSE management system integration                                      |\n| Monitoring of a leading indicator panel on HSE<br>performance                                 | Proactive HSE and process safety indicators dashboard                                   |\n| Variable compensation linked to reduction of the LTIFR<br>(group) / IRR (business unit) ratio | Variable compensation linked to reduction of TIR (group /<br>business units)            |\n| Launch of the cardinal safety and environmental rules                                         | Deployment of safety culture and leadership model                                       |\n\nSafety is one of Acerinox's company values and defines the way the Group works. The commitment to employee health and safety is woven into every level of the Company, from senior management to the entire workforce. These same stringent levels are also demanded of third-party contractors.\n\nThe Group has an occupational health and safety policy, the aim of which is to reach zero accidents in operations. Accessible on the company website, it sets out the basic principles for action and application across all companies.\n\nIn 2023, the Group worked on the roll-out of its health, safety and environment strategy for the coming five years, based on six fundamental pillars:\n\n- Integration of the health, safety and environment management system.\n- Safety-focused corporate culture.\n- Health, safety and environment corporate processes.\n- Structure of safety processes.\n- Reduction in the environmental footprint.\n- Health, safety and environment in Industry 4.0.\n\n**\\_Key indicators GRI 403-9**\n\n**3.47 7.91**\n\nLTIFR\\* × 1,000K TRIR\\*\\* × 1,000K\n\n\\*LTIFR: Lost time injury frequency rate \\*\\*TRIR: Total recordable injury frequency rate\n\nImage /page/236/Picture/23 description: The image shows a low-angle view of a modern bridge pylon against a clear blue sky. The pylon is white and cylindrical, with a slightly flared top. Numerous steel cables are attached to the top of the pylon, fanning out in a symmetrical pattern towards the edges of the frame. The cables are evenly spaced and appear taut, suggesting they are under tension. Small, dark-colored dampers or connectors are visible along the length of the cables. The sky is a gradient of light blue, with a few wispy clouds visible in the upper right corner. The composition emphasizes the height and structural elements of the bridge, creating a sense of scale and engineering precision.\n\n{237}------------------------------------------------\n\nHealth and safety performance continued to improve in line with the trend from previous years, recording an LTIFR reduction of 24% and TRIR reduction of 18.5% at Group level compared with 2022.\n\nFor 2024, we are being even more ambitious, setting an accident rate reduction target of 26% for the TIR vs. 2023 for employees and contractors.\n\nProcess safety is a critical aspect of operations to prevent industrial accidents.\n\nAcerinox applies the WorldSteel process safety model based on six fundamental principles:\n\n- Ensuring commitment to process safety management.\n- Establishing a hazard assessment and risk analysis program.\n- Implementing and maintaining a risk monitoring and management system.\n- Striving for excellence and learning from experience.\n- Using continuous improvement to ensure the effectiveness of process safety management.\n- Maintaining a sense of vulnerability in the safety management of each process.\n\nRisk analyses are performed when there is a change in facilities or operations. Hazard reporting is done through the preventive observations and the whistleblowing channel, if applicable, for anonymized reports.\n\nAcerinox monitors all safety incidents in its operations, also investigating and implementing corrective and preventive measures to mitigate their recurrence.\n\nImage /page/237/Picture/13 description: The image shows a stylized icon of a presentation or training session. A figure stands to the right, gesturing towards a screen displaying a bar graph. Three stylized figures are seated in front of the screen, presumably as the audience.\n\n**The Group has sustainable loans linked to the improvement of its employees' accident rate. Specifically, its target is to improve the LTIFR x 1,000k indicator by 2% compared to 2022 in the factories of Acerinox Europa, North American Stainless, Columbus Stainless and Bahru Stainless; this is 3.3, and the target has already been met.**\n\nImage /page/237/Picture/15 description: The image is a close-up of a modern building with a unique architectural design. The building features a grid-like pattern of horizontal and vertical lines, creating a series of rectangular shapes. The lines are a dark blue color, and the spaces between them are filled with white. The overall effect is one of clean lines and geometric shapes. The image is taken from a low angle, looking up at the building. The sky is not visible, and the focus is on the building's design.\n\n{238}------------------------------------------------\n\nImage /page/238/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters, positioned within a partial blue circle. The circle appears to be incomplete, arching over and around the text.\n\n#### **\\_Lost time injury frequency rate (LTIFR)**\n\n#### **GRI 403-9**\n\nAcerinox is continually working to fuse safety culture into operations by tying the variable remuneration of senior management and plant managers to an improvement in these rates.\n\nThe proactive HSE indicators, deployed in all production centers, are a fundamental tool for monitoring performance. Acerinox has met its loan-linked target.\n\nImage /page/238/Figure/6 description: The image is a line graph comparing three different categories across four years (2021-2024). The y-axis ranges from 2.50 to 10.00. The three categories are \"Group (employees and contractors)\", \"Sustainable loan target\", and \"ACX EU, NAS, CLB, BHR\". In 2021, the \"Sustainable loan target\" is at 7.42, \"Group (employees and contractors)\" is at 4.53, and \"ACX EU, NAS, CLB, BHR\" is at 2.92. In 2022, the \"Sustainable loan target\" is at 4.57, \"Group (employees and contractors)\" is at 4.44, and \"ACX EU, NAS, CLB, BHR\" is at 2.73. In 2023, the \"Sustainable loan target\" is at 3.47, \"Group (employees and contractors)\" is at 4.35, and \"ACX EU, NAS, CLB, BHR\" is at 3.30. In 2024, the \"Group (employees and contractors)\" is at 3.30.\n\n#### **\\_Absenteeism rate own personnel (%)**\n\n#### **GRI 403-9**\n\nDespite the increase experienced in 2023, the reduction of absenteeism is another major focus of action and effort through the monitoring of cases and consultation with accident insurance companies in order to achieve better reporting and management.\n\nTeam initiatives in health, safety and environmental matters are drivers of change that allow us to identify operational improvements.\n\nSeveral innovations have received industry awards, such as the World Stainless Industry Awards in Safety: Gold and Bronze for the Bahru plant, the World Stainless Industry Awards in Sustainability for the Palmones plant, and the World Steel Occupational Safety and Health Excellence Recognition for the Columbus plant.\n\nImage /page/238/Figure/12 description: This bar chart shows the values for 2021, 2022, and 2023. The value for 2021 is 4.93%, the value for 2022 is 5.25%, and the value for 2023 is 6.32%.\n\n#### **Health and well-being**\n\nOne of the Company's priority objectives is to promote the well-being of people in order to achieve a healthy working environment in which employees feel comfortable, satisfied and have a good quality of life. We understand well-being management as a state of balance that encompasses mental, physical, and emotional health.\n\nAcerinox has an employee assistance program (EAP), a psychological counseling service to help employees resolve and manage situations that may affect them emotionally in their daily lives. All employees have a psychologist available to them in real time, 24 hours a day, 7 days a week.\n\nThe EAP also offers thematic workshops on different matters related to health and wellness, such as workshops on managing mental blocks, stress control, relaxation and mindfulness techniques, and nutrition workshops.\n\nImage /page/238/Picture/18 description: The image shows a low-angle view of several modern skyscrapers against a blue sky with scattered clouds. The buildings are primarily blue and glass, reflecting the sky. The composition emphasizes the height and scale of the buildings, with converging lines leading the eye upwards. The lighting is bright, highlighting the reflective surfaces of the buildings.\n\n{239}------------------------------------------------\n\nImage /page/239/Picture/1 description: The image shows a partial view of the Acerinox logo. The logo features the word \"ACERINOX\" in bold, sans-serif font, with the letters partially obscured by a blue circular shape that surrounds the text. The blue circle is thick and prominent, adding a sense of enclosure and emphasis to the brand name.\n\nImage /page/239/Picture/2 description: The image shows a badge icon with a star in the center and the words \"FEATURED CASES\" in large, bold letters to the right of the badge. A vertical line separates the badge from the text.\n\n### **Launch of the HSE Cardinal Rules**\n\nIn 2023, the Group launched its Cardinal Rules, providing a framework for ensuring safety as a common value for employees and contractors in each and every operation.\n\nThese rules are based on Acerinox's history and are simple instructions to prevent high-risk situations.\n\nImage /page/239/Picture/6 description: The image shows a diagram of Cardinal Rules. The diagram is arranged in a circular fashion, with the words \"Cardinal Rules\" in the center. Around the center are various safety rules, including \"Control of work\", \"Moving machinery\", \"Confined spaces\", \"Work at heights\", \"Lifting and hoisting\", \"Safe driving\", \"Substance abuse\", and \"LO(TO)2\".\n\n## **Gold World Stainless Industry Award in Safety, intelligent sensors. Bahru**\n\nThe implementation of smart sensors on coil turrets increases worker safety by reducing the risk of unintended strikes or entrapment. Upon detecting the presence of employees and obstacles in the safety area, the turret movement locks down. These sensors improve productivity by reducing accidents and overall production efficiency.\n\nImage /page/239/Picture/9 description: The image shows an industrial setting with heavy machinery. The floor is marked with red and white striped safety lines. There are two red painted areas on the floor, one larger and one smaller, both outlined with yellow dotted lines. The larger area has several rectangular markings on it.\n\n## **Bronze World Stainless Industry Award in Safety.**\n\n### **NAS ergonomic lifting equipment**\n\nA detailed analysis of the loads handled at each of the workstations made it possible to establish different mechanical lifting systems to minimize ergonomic risks.\n\n## **World Steel Occupational Safety and Health Excellence Recognition.**\n\n#### **Columbus**\n\nFollowing the spontaneous breakage of a hot roll, which caused particles to shoot out with no personal or material consequences, the Columbus team developed an innovative safety hood solution during the cooling process, improving safety and efficiency in hot rolling operations.\n\nImage /page/239/Picture/16 description: A worker wearing a hard hat and ear protection stands near a blue container, looking towards a large industrial machine with a cylindrical component. Above the machine, a gray rectangular object is suspended by a yellow crane hook. The industrial setting includes visible pipes and structural elements in the background.\n\nImage /page/239/Picture/17 description: The image shows a complex network of blue metal beams forming a ceiling structure. The beams are arranged in a triangular pattern, creating a sense of depth and complexity. At regular intervals, there are light fixtures hanging from the structure, providing illumination. The background is a light color, possibly the sky or a translucent material, which allows light to filter through the structure.\n\n{240}------------------------------------------------\n\nImage /page/240/Picture/1 description: The image shows the text '5.5 Supply chain' in a purple sans-serif font.\n\n## **Supply chain management**\n\n**GRI 2-6 / 204-1 / 308-1 / 308-2 / 414-1 / 414-2**\n\n#### **\\_Relevant activities**\n\nImage /page/240/Figure/5 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in the air. The person is represented by simple lines, and the podium is also depicted in a minimalist style.\n\n|  | 2 |\n|--|---|\n|  | O |\n|  |   |\n|  |   |\n\n| Milestones 2023                                                                                                                                     | Challenges 2024                                                                                                         |\n|-----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|\n| Approval of the code of conduct for business partners.                                                                                              | Definition of the Company's core procurement processes,<br>thus ensuring good management of responsible<br>procurement. |\n| Approval of the procedure for assessing risks in the<br>supply chain.                                                                               | Assessment and first report on supply chain risk status                                                                 |\n| Definition of the supplier audit methodology and<br>execution of a pilot test                                                                       | Audits of critical suppliers and sampling of non-critical<br>suppliers to build a resilient, sustainable value chain    |\n| Optimization of procurement and contract arrangement<br>processes and the associated costs. Deployment of the<br>first offline electronic catalogs. | Launch of a supplier portal to ensure harmonized<br>purchasing management at global level.                              |\n| Awarding of the most prestigious sustainability accolade,<br>the EcoVadis award (platinum)                                                          | Promote compliance with ESG standards in the supply<br>chain through the Global Compact training program.               |\n\nThe management of a sustainable supply chain is a priority for Acerinox, and one of the five pillars of the Positive Impact 360º sustainability plan. The Group works continuously to optimize monitoring in the face of increasing customer demands and in order to generate a positive impact on society.\n\nThe acquisition of raw materials, products and services is pivotal for Group activity and for the compliance with the required market standards on quality, pricing, logistics, and sustainability. Due to the very nature of Acerinox, supply activities are divided into two large groups: general purchases, which encompasses both productive and non-productive services and goods, and the acquisition of raw materials.\n\nImage /page/240/Picture/10 description: A low-angle shot captures a modern building with a glass facade under a clear blue sky. The building's exterior is composed of numerous rectangular glass panels, framed by a grid of white or light-colored material. Some of the windows are slightly ajar, revealing a glimpse of the interior. The angle of the shot emphasizes the height and geometric design of the building, with the lines of the facade converging towards the top right corner of the frame. The sky is a uniform, bright blue, providing a stark contrast to the reflective glass surface of the building. A portion of the bottom of the image is obscured by a solid purple block.\n\nImage /page/240/Picture/11 description: The image shows the logo for Acerinox. The logo is a blue oval with the word \"ACERINOX\" in white letters inside the oval. The letters are bold and sans-serif.\n\n{241}------------------------------------------------\n\nImage /page/241/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, enclosed within a blue circle. The circle is not fully closed, with a gap at the top.\n\n#### **Regulatory framework of the purchasing management model**\n\nThe Group's procurement activities are guided by the rules and principles that must govern the actions of all its companies.\n\nFirstly, Acerinox has general contracting conditions for the provision of services and the procurement of goods.\n\nSince 2021, the Group has also had a responsible purchasing policy aimed at consolidating suppliers, maintaining stable and lasting relationships, sharing ethical criteria, and promoting sustainable value creation. This policy, accessible on the company website, includes the general principles of purchasing goods and services related to economic, competitive, social, and environmental matters. It also sets out the Group's objectives and basic principles of action for all its companies.\n\nIn 2023 the code of conduct for business partners was approved, which defines Acerinox's principles and requirements with respect to its suppliers of goods and services, and vis-à-vis intermediaries, advisors and other business partners. This code is a fundamental requirement for any of the Group's contractual relationships. The principles and requirements included in it are based on the Acerinox code of conduct and good practices, the Group's general contracting conditions, the general purchasing policy, and other corporate policies. At the same time, they are aligned with the 10 principles of the United Nations Global Compact, the International Bill of Human Rights, and the principles and guarantees included in the eight Conventions of the International Labor Organization, as well as the Organization for Economic Cooperation and Development's Due Diligence Guidance for responsible supply chains of minerals from conflict-affected and highrisk areas.\n\nThe Group's procurement activities are also guided by the principles set out in the internal instruction on the prevention of money laundering, which establishes the minimum requirements that must be met by any process for the purchase of goods and services at Group companies.\n\n### **Purchasing strategy 2023-2027**\n\nThe Group has defined a purchasing strategy for the next five years based on three pillars:\n\n#### **1. ESG as the core of supply chain risk management**\n\nCompliance with the latest regulatory standards relating to ESG standards, as well as the management of other risks inherent in the supply chain, is key; it is also complex, as it involves a large number of activities and criteria. As a result, the process has been updated and digitalized, while at the same time deepening a more exhaustive evaluation of suppliers, making them end-to-end and with an established frequency, verifying various risk areas and establishing action and training plans. The process also includes the creation of a thirdparty risk committee to review the status of the risk and any associated measures.\n\nBased on this robust process, a digital tool has been deployed which, with the help of artificial intelligence, is capable of managing, processing and evaluating all data related to performance, management, compliance with ESG criteria, and impact on business continuity of each supplier that forms part of the supply chain. In this way, Acerinox can regularly monitor the status of its risks, design and set out action plans that it shares with the supplier, and, finally, report this information according to regulatory standards.\n\nIn 2023, other digitalization projects were launched to improve cost control processes and projects. Both are aimed at increasing the efficiency of the procurement process. These projects range from a supplier portal and the deployment of electronic catalogs and purchases by marketplace to the redefinition of the category strategy through the development of tools that facilitate decision-making using massive data processing.\n\nImage /page/241/Picture/14 description: The image shows a close-up of a blue metal structure, possibly a fence or part of a playground. The structure is made of cylindrical bars arranged in a grid-like pattern. The bars are painted in a bright blue color. The background is white.\n\n{242}------------------------------------------------\n\n## **2. Talent development**\n\nTalent development is a key lever for the Company's competitiveness and future. The changing needs of the environment mean that procurement professionals' skills must be identified, captured, and developed. It builds digital skills as a driver of innovation and places people at the center of value creation. To this end, the skills map has been redrawn, and individualized development and training plans have been designed to boost motivation, build potential, and promote multidisciplinary teamwork as a gateway to creativity, commitment, and optimal solutions at the corporate level.\n\n## **3. Fostering supplier relationships and focusing on value creation**\n\nTrust is a critical factor in establishing solid relationships with suppliers, which is very necessary in a highly volatile context. The closer, more robust, and more transparent this relationship is, the easier it will be to work towards common goals and, therefore, to achieve them.\n\nTo this end, Acerinox is building its partnerships with key suppliers, not only in the interests of operational efficiency, but also to foster innovation and value creation for customers and the Company.\n\n#### **Supplier relationship management**\n\nThe supplier approval process includes global and local regulations in areas such as the environment, health and safety, labor practices, compliance with international declarations on human rights, and quality standards, as well as a supplier risk assessment. Specifically, the group's suppliers must sign the Acerinox code of conduct; as of 2023, 1,061 suppliers had signed it. Of them, 773 were new suppliers.\n\n20% of the Group's strategic suppliers have already been evaluated according to ESG criteria, and 5% have been evaluated on the basis of capacity criteria.\n\nMoreover, minimum requirements have been defined, and those suppliers that do not meet the specified thresholds must devise improvement plans if they are to continue working with the Group. In this regard, 20 suppliers have been audited under ESG criteria (comparative information is not provided since this is the first year that non-critical suppliers evaluated are reported), 14 of these audits were on-site and of critical suppliers (2 audits in 2022), improvement plans were agreed for 3 of them. It should be noted that 100% of the audits carried out in 2023 obtained a favorable result and that no critical supplier has been terminated for non-compliance with ESG criteria.\n\n### **The supply chain in figures**\n\nAcerinox collaborates with over 7,000 suppliers worldwide, 773 of which are new. Almost 80% of suppliers are local, from the same country as the production unit (in the case of NAS, this refers to the states of Ohio, Indiana, and Kentucky) with revenue amounting to approximately EUR 3,000 million in 2023, thus facilitating and fostering the economic and social development of the communities in which the Group operates.\n\nImage /page/242/Picture/12 description: The image shows a view of several tall buildings in a city. The buildings are of different architectural styles, with some being older and made of brick, while others are modern with glass facades. The sky is visible between the buildings, and there are some clouds in the sky.\n\nImage /page/242/Picture/13 description: The image shows a low-angle shot of several skyscrapers against a light blue sky. The buildings are modern, with glass and steel facades. The tallest building is on the right side of the image and is angled towards the viewer. The building has a grid-like pattern of windows that reflect the sky and other buildings. The building in the center is slightly shorter and has a similar design. The building on the left is the shortest and has a darker glass facade. The sky is clear and provides a backdrop for the buildings.\n\n{243}------------------------------------------------\n\n## **\\_No. of suppliers and expenditure GRI 204-1**\n\n|                   | 2023          |         | 2022          |         |\n|-------------------|---------------|---------|---------------|---------|\n|                   | Total         | % Local | Total         | % Local |\n| No. of suppliers  | 7,702         | 78.59%  | 8,019         | 70.69%  |\n| Expenditure (EUR) | 4,966,502,847 | 59.12%  | 5,046,443,530 | 70.04%  |\n\n## **\\_No. of suppliers evaluated with ESG criteria**\n\n#### **GRI 308-1 / 414-1**\n\n|                                              | 2023  |        | 2022  |        |\n|----------------------------------------------|-------|--------|-------|--------|\n|                                              | Total | %      | Total | %      |\n| No. of critical suppliers* (category A)      | 267   | 3.47%  | 73    | 0.91%  |\n| No. of ESG evaluated critical<br>suppliers   | 54    | 20.22% | 23    | 31.50% |\n| No. of ESG evaluated critical<br>suppliers** | 292   | 38%    |       |        |\n\nImage /page/243/Picture/6 description: The image shows a close-up view of a modern architectural structure, possibly a roof or a dome, constructed with a network of metal beams and glass panels. The beams are arranged in a crisscrossing pattern, creating a geometric design. The glass panels are set between the beams, allowing light to filter through. The sky is visible through the glass, suggesting an outdoor setting. The overall impression is one of contemporary design and engineering.\n\n\\*Critical suppliers are defined as companies that supply products considered critical to Acerinox operations, safety, and ESG compliance.\n\n\\*\\*Comparative information is not provided since this is the first year that non-critical suppliers evaluated are reported.\n\nImage /page/243/Picture/9 description: The image shows a light purple icon of a badge or medal. The badge is circular with a star in the center. Ribbons hang down from the bottom of the circle.\n\n## **FEATURED CASE**\n\n#### **Sustainable supplier training program**\n\nSustainable supplier management requires a commitment to responsible performance that ensures sustainability throughout the value chain. Standing with and supporting the companies that form part of our supply chain is a key aspect of ensuring the company's sustainability. For this reason, Acerinox is participating in the second iteration of the \"Training Program: sustainable suppliers\". This global program is led by the Spanish Global Compact Network, whose goal is to provide sustainability training to SMEs that supply large companies such as Acerinox, one of the initiative's partners. At the end of the program, companies will be able to identify the risks and opportunities of corporate sustainability, the environmental and societal impacts generated by their activities, analyze priority sustainability issues for their activity and sector, and develop and implement sustainability actions and/or strategies that will enable them to improve their performance in this area.\n\n#### **\\_Recognitions**\n\nA commitment to sustainable purchases, helping to ensure sustainability principles are present throughout the life cycle of its products, was highlighted as a strength by EcoVadis. The measures and improvements implemented increased our \"responsible purchasing\" score by 10%, reaching 70 points. Progress in the management of this area has contributed to our maintaining the EcoVadis Platinum medal.\n\n#### **\\_Participation in forums**\n\nThe Acerinox Purchasing Department is actively participating in leading forums and congresses to share experiences and best practices in this area. The aim is to place us at the forefront and promote sustainability based on the sustainable management of the supply chain.\n\n{244}------------------------------------------------\n\n**\\_Purchases from suppliers**\n\n**EUR 4,967**\n\n**million**\n\n## **79% of suppliers are local**\n\nEncouraging local development of the communities in which the Group operates.\n\nImage /page/244/Picture/6 description: The image shows a close-up of a blue steel framework against a bright blue sky. The sun is shining through the framework, creating a starburst effect. The framework is made up of many different beams and supports, all connected together. The Acerinox logo is visible in the top right corner of the image.\n\n### **Contribution to the community**\n\n#### **GRI 3-3 / 2-28**\n\nAcerinox is committed to creating value and helping build a more prosperous and sustainable environment in the local communities and countries where it is present in order to increase its positive social impact.\n\nTo achieve this goal, in 2023, the company established its social action framework to harmonize activities along five priority lines for economic growth, social sustainability and environmental protection:\n\n- Socio-economic development. Initiatives that support the progress of the communities where the Group operates and that generate opportunities to create value.\n- Social well-being of people. Social initiatives focused on well-being and improving the quality of life of communities, particularly the most vulnerable people.\n- Environmental protection and recovery. Projects that actively help to improve the environment, mitigate climate change and preserve local biodiversity.\n- Commitment to quality education. Collaboration on initiatives that promote lifelong learning, talent development among future professionals, and their incorporation to the labor market.\n- Inclusive development. Initiatives that encourage social and labor integration among disadvantaged groups to promote a more inclusive world and ensure that nobody is left behind. In this regard, special attention is paid to groups such as women, the unemployed elderly, and disabled people, to help close the inequality gap.\n\nSocial action management is based on dialogue with stakeholders to respond to their needs and priorities. To identify actions, priority is given to local initiatives with tangible benefits at the municipal or regional level where the facilities are located.\n\n#### **\\_Key indicators**\n\n**EUR 539,763.00 Invested in social actions**\n\nImage /page/244/Figure/20 description: The image is a bar graph comparing values for the years 2021, 2022, and 2023. The value for 2021 is 415, the value for 2022 is 605, and the value for 2023 is 540.\n\n{245}------------------------------------------------\n\nImage /page/245/Picture/1 description: The image is a donut chart titled \"Contribution to the community\". The chart contains four categories: \"Contributions to foundations and nonprofit organizations\" with a value of 101,873, \"Association or sponsorship actions\" with a value of 35,046, \"Social action\" with a value of 206,949, and \"Institutional\" with a value of 195,895.\n\nFor us, investing in the community is a strategic instrument for the development of society and the local environment where we carry out our activity.\n\n| Milestones 2023                                                                  | Challenges 2024                                                                                        |\n|----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|\n| Roll-out of the Social Action Plan to all of the Group's<br>business units.      | Modification of action implementation to fit the new<br>context of the Group's various business units. |\n| Identification of new lines of collaboration to maximize<br>the positive impact. | Development of strategic alliances with other<br>organizations to maximize impact in different areas.  |\n\n#### **Corporate volunteering**\n\nAs part of our culture and social calling, we encourage collaboration and solidarity among our employees, promoting participation in projects aimed at improving the environment and the lives of disadvantaged groups to contribute to a more egalitarian society, as well as caring for nature.\n\nImage /page/245/Picture/6 description: The image shows a graphic with a light purple color scheme. On the left is a circular badge with a star in the center and ribbons hanging down. A vertical line separates the badge from the text on the right, which reads \"FEATURED CASES\" in a bold, dark purple font.\n\n#### **Socio-economic development**\n\nThe Columbus Stainless Techno Girls program offers selected girls the opportunity to experience the working world first-hand, receive an allowance and have on-site mentoring sessions for three years. After completing the program, the beneficiaries become part of the alumni association, where they are provided support and guidance to pursue higher education,\n\nImage /page/245/Picture/9 description: A group of students and adults are posing for a picture in front of a backdrop with the words \"Columbus Stainless\" on it. The students are wearing school uniforms, and the adults are dressed in business casual attire. The group is smiling and looking at the camera.\n\n{246}------------------------------------------------\n\n#### **Social well-being**\n\nVDM Metals supports the Balthasar Children's and Youth Hospice. For the first time since the pandemic, the traditional charity run around the Altena plant was held. The participants covered a total distance of about 400 km. The proceeds were donated to the hospice to strengthen its services.\n\n#### **Biodiversity preservation**\n\nAcerinox Europa employees and their families participated in a reforestation day in the Los Alcornocales National Park, Europe's only subtropical forest, which is threatened by serious problems such as drought. The \"Sowing the Future\" solidarity initiative promotes environmental awareness among our employees and children.\n\n#### **Commitment to education**\n\n#### Collaboration with the A LA PAR Foundation\n\nAcerinox continues to collaborate with the A LA PAR Foundation to jointly carry out activities that improve the quality of life of people with intellectual disabilities. Such initiatives notably include Funda Market, a solidarity market where products made by members from the Foundation combine with more than 50 brands to produce a weekend agenda for the whole family. In addition, we also held Family Day, where employees and their families participated in various activities at the foundation.\n\nFor the first time, Acerinox participated in the CAMPVS program, which aims to facilitate access to the workforce for students with intellectual disabilities. Company volunteers mentored the students in one-onone meetings to help bring the working world closer.\n\nWith this initiative, Acerinox wants to play a leading role in the project and contribute to closing the inequality gap.\n\nImage /page/246/Picture/10 description: A group of ten people are standing together indoors. The group is diverse in age and gender. The person in the center is holding a white sign with black text and a logo on it. The people are dressed in casual clothing, including jeans, sweaters, and jackets. The background is a light color, and there are some decorations hanging from the ceiling.\n\n#### **Collaboration with associations**\n\n#### **GRI 2-28**\n\nThe Acerinox Group partners with many national and international associations and organizations in order to publicize key aspects of its work, promote knowledge and positioning and share best practices in the sector. Particularly notable are its participation in the Worldsteel Association, UNESID, EUROFER, Responsible Steel, AEGE, AGI, the SERES Foundation, and others.\n\nImage /page/246/Picture/14 description: Three people are holding a large check. The person on the left is a woman with glasses and a white shirt. The person in the middle is a woman with dark hair and a dark top. The person on the right is a man in a suit jacket and white shirt. The check is made out to Kinder-und Jugendhospiz Balthasar for EUR 5,500.00. The check is dated Werdohl, 29.08.2023 and has the VDM Metals logo on it.\n\nImage /page/246/Picture/15 description: A group of people are gathered outdoors, seemingly listening to a speaker. The group consists of adults and children, some of whom are being held by adults. They are standing on a dirt or gravel area, surrounded by trees and foliage. In the background, there is a white vehicle with its trunk open, suggesting that they may be on a field trip or outdoor activity. The overall scene suggests an educational or recreational event taking place in a natural setting.\n\n{247}------------------------------------------------\n\nImage /page/247/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle partially surrounding the text. The text is in a bold, sans-serif font.\n\n## **6. Appendices**\n\n## **6.1 Scope of the report**\n\n#### **Standards and principles used**\n\nThe information included in this report relates to both financial and non-financial information and was prepared by the board of directors on February 28, 2024. The non-financial information statement has been favorably evaluated by the Sustainability Committee of the board of directors.\n\nThis 2023 Integrated Annual Report has been prepared taking into account the following reporting standards and principles:\n\n- In accordance with GRI Standards 2021, tailored to specific GRIs in compliance with Spanish Law 11/2018 and voluntarily to other GRI standards on material issues. See GRI table of contents appendix.\n- The Sustainability Accounting Standards Board (SASB) reporting standard for the SASB Iron & Steel Producers indicators. See SASB table of contents appendix.\n- The recommendations of the Task Force on Climate-Related Disclosures (TCFD). See TCFD table of contents appendix.\n- The Sustainable Development Goals (SDGs) approved by the United Nations General Assembly, which Acerinox includes in its strategy and which are detailed in the Contribution to the 2030 Agenda section.\n- The Ten Principles of the United Nations Global Compact, which are mentioned in chapter 5 Sustainable management model.\n- The recommendations in the Spanish Securities Market Commission's Guide for the Preparation of Management Reports of Listed Companies.\n\nAlso including:\n\n- **a)** Directive 2014/95/EU as regards disclosure of non-financial and diversity information, as well as related Spanish legislation (Law 11/2018).\n- **b)** In its first delegated act, Regulation (EU) 2020/852 of the European Parliament and of the Council of June 18, 2020 on the establishment of a framework to facilitate sustainable investment lays down the obligation to disclose information on how and to what extent the undertaking's investments are associated with economic activities deemed to be environmentally sustainable in relation to the objectives of climate change mitigation and climate change adaptation. See chapter 4.6 European taxonomy on sustainable finance.\n\n## **Scope of information in this report**\n\n#### **Timescale**: 2-3\n\n2023. The report is published annually.\n\n#### **Organizational scope**: 2-1 / 2-2\n\n#### Acerinox, S.A. and subsidiaries\n\nIn order to check and guarantee the reliability of the information provided to the various stakeholders, the Acerinox Group has submitted this report to external verification, through the professional services firm PwC, with a **limited level of assurance**. As a result of the verification process, an independent review report is produced, which includes the objectives and scope of the process, as well as the verification procedures used and the related conclusions. This report is included in chapter Appendices (6.8) to this report.\n\nImage /page/247/Picture/22 description: The image shows a close-up of a modern bridge structure with a network of white cables forming a grid pattern. The cables are thick and appear to be coated in a white material. They run diagonally across the frame, creating a sense of depth and perspective. To the left, a curved gray metal beam is visible, connected to a vertical white support structure with a series of bolts. The background is a bright, overcast sky, which provides a stark contrast to the geometric patterns of the bridge.\n\n{248}------------------------------------------------\n\nImage /page/248/Picture/1 description: The image shows the text \"6.2 Supplementary information (indicators)\". The text is in a purple color.\n\n#### **Sustainable use of resources**\n\n#### **\\_Main raw materials (metric tons)**\n\n#### **GRI 301-1 / 301-2**\n\n| t                  | 2023      | 2022      | 2021      |\n|--------------------|-----------|-----------|-----------|\n| Alloys             | 536,758   | 697,324   | 714,075   |\n| Gases              | 276,823   | 316,862   | 355,466   |\n| Acids              | 33,969    | 39,968    | 43,726    |\n| Recycled material* | 2,033,855 | 2,259,217 | 2,500,852 |\n| Recycled acid**    | 14,092    | 16,264    | 16,104    |\n\n\\*Recycled material is defined as purchased scrap, process and internal scrap, metal recovered from slag and other recycled waste.\n\n\\*\\*Recycled acid: total amount of nitric and hydrofluoric acid recovered from the process itself.\n\n\\*\\*\\*In 2023, 70.59% of the materials used in the steel manufacturing process were recycled, while in 2022 it was 68.18% and in 2023 69.20%, which is 3.52% more than in 2022 and 2.01% more than in 2021.\n\n#### **\\_Waste management (metric tons)**\n\n#### **GRI 306-3 / 306-4 / 306-5**\n\n| t                         | 2023      |       | 2022      |       | 2021      |        |\n|---------------------------|-----------|-------|-----------|-------|-----------|--------|\n| Total waste               | 1,298,793 | %     | 1,572,090 | %     | 1,669,375 | %      |\n| Landfill*                 | 262,827   | 20.2% | 333,534   | 21.2% | 471,076   | 28.2%  |\n| Recycled/Recovered        | 1,035,966 | 79.8% | 1,238,556 | 78.8% | 1,198,299 | 71.8%  |\n| Total non-hazardous waste | 1,182,735 | 91.1% | 1,432,963 | 91.2% | 1,521,645 | 91.15% |\n| Landfill                  | 203,578   | 17.2% | 252,595   | 17.6% | 385,541   | 25.3%  |\n| Recycled/Recovered        | 979,157   | 82.8% | 1,180,368 | 82.4% | 1,136,104 | 74.7%  |\n| Total hazardous waste     | 116,058   | 8.9%  | 139,127   | 8.8%  | 147,730   | 8.85%  |\n| Landfill                  | 59,250    | 51.1% | 80,939    | 58.2% | 85,535    | 57.9%  |\n| Recycled/Recovered        | 56,809    | 48.9% | 58,188    | 41.8% | 62,195    | 42.1%  |\n\n\\*Waste is disposed of by an authorized off-site waste manager.\n\nData for 2021 and 2022 have been recalculated, grouping together the Other (R&D&I) and Recycled/Recovered categories.\n\n#### **\\_CO2 emissions (CO2e metric tons)**\n\n#### GRI 305-1 / 305-2\n\nAcerinox, in its report, uses the operational approach. The Group reports the operating emissions at its production companies over which it exercises operational control.\n\n| tCO2e                       | 2023      |           |         | 2022      |           |         | 2021      |           |         |\n|-----------------------------|-----------|-----------|---------|-----------|-----------|---------|-----------|-----------|---------|\n|                             | Total     | Stainless | HPAs    | Total     | Stainless | HPAs    | Total     | Stainless | HPAs    |\n| Scope 1                     | 778,994   | 671,545   | 107,449 | 872,253   | 768,600   | 103,653 | 974,048   | 867,639   | 106,409 |\n| Scope 2 - market-<br>driven | 1,483,902 | 1,454,623 | 29,279  | 1,879,167 | 1,792,901 | 86,266  | 2,206,722 | 2,124,209 | 82,513  |\n| Total (scope 1 + 2*)        | 2,262,896 | 2,126,168 | 136,728 | 2,751,420 | 2,561,501 | 189,919 | 3,180,770 | 2,991,848 | 188,922 |\n\n\\*2021 data were corrected pursuant to the GHG Protocol.\n\n{249}------------------------------------------------\n\nImage /page/249/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is in a darker shade of blue than the circle.\n\nThe GWPs published in the IPCC Fifth Assessment Report have been used in this report. It should be noted that the DEFRA conversion factors incorporate the GWP of the IPCC Fifth Assessment Report.\n\nThe sources of information on the conversion factors for the calculation of GHG emissions, prioritizing the most specific ones for each facility, will be as follows:\n\n- Carbon footprint calculator from the Ministry organization. Scope 1+2 (Spain). Version 28.\n- DEFRA: Department for Environment, Food & Rural Affairs. (United Kingdom). Greenhouse gas reporting: conversion factors 2023.\n- Ecoinvent database. Version: 3.9.1.\n- Life Cycle Assessment: WorldSteel. (International). 2020.\n- EPA: United States Environmental Protection Agency. GHG (US). April 2023\n- Calculation and emission factors developed by the Intergovernmental Panel on Climate Change (IPCC). 2006 IPCC Guidelines for National Greenhouse Gas Inventories and IPCC Quito report.\n- Supplier-specific emission factors.\n\n#### **\\_CO2e emissions intensity (metric tons CO2e/metric ton)**\n\n#### GRI 305-4\n\n| tCO2e/t               | 2023  |           |      | 2022  |           |      | 2021  |           |      |\n|-----------------------|-------|-----------|------|-------|-----------|------|-------|-----------|------|\n|                       | Total | Stainless | HPAs | Total | Stainless | HPAs | Total | Stainless | HPAs |\n| Intensity (Scope 1+2) | 1.09  | 1.07      | 1.79 | 1.14  | 1.10      | 2.31 | 1.11  | 1.08      | 2.42 |\n\nThe Group's emissions intensity has decreased due to the increased use of renewable energy and the optimization of plant operations. This decrease is in line with the objectives established for the stainless steel division in the Positive Impact 360º Sustainability Master Plan.\n\nThe greenhouse gas reduction commitment extends to all other atmospheric emissions. Acerinox is working to reduce its emission figures for nitrogen oxides, volatile organic compounds and particulate matter.\n\n#### **\\_Other emissions (metric tons)**\n\n#### GRI 305-7\n\n|                    | 2023  |           |      | 2022  |           |      | 2021  |           |      |\n|--------------------|-------|-----------|------|-------|-----------|------|-------|-----------|------|\n| t                  | Total | Stainless | HPAs | Total | Stainless | HPAs | Total | Stainless | HPAs |\n| NOx                | 663   | 618       | 45   | 648   | 620       | 28   | 615   | 589       | 26   |\n| VOCs               | 15    | 15        | 0    | 32    | 32        | 0    | 27    | 27        | 0    |\n| Particulate matter | 191   | 191       | 0    | 280   | 280       | 0    | 424   | 424       | 0    |\n| SOx*               | 16    | 13        | 2    |       |           |      |       |           |      |\n\n\\*SOx emissions were reported in 2023 due to data availability.\n\n{250}------------------------------------------------\n\nImage /page/250/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters stacked vertically. The text is positioned to the left of a blue, incomplete circle that curves around the right side of the text. The circle is thick and has a consistent width.\n\n#### **\\_Energy consumption (GJ)**\n\nGRI 302-1\n\n| GJ                  | 2023       |            |           | 2022*      |            |           | 2021**     |            |           |\n|---------------------|------------|------------|-----------|------------|------------|-----------|------------|------------|-----------|\n|                     | Total      | Stainless  | HPAs      | Total      | Stainless  | HPAs      | Total      | Stainless  | HPAs      |\n| Natural gas         | 10,689,464 | 9,919,946  | 769,518   | 12,134,458 | 11,008,895 | 1,125,563 | 11,559,423 | 12,416,327 | 1,124,160 |\n| Diesel              | 172,124    | 159,676    | 12,447    | 204,111    | 190,814    | 13,297    | 167,291    | 182,558    | 12,649    |\n| Electricity         | 9,356,461  | 8,704,437  | 652,025   | 10,375,319 | 9,695,075  | 680,244   | 10,000,382 | 10,797,582 | 653,092   |\n| Total<br>consumptio | 20,218,049 | 18,784,059 | 1,433,990 | 22,713,888 | 20,894,784 | 1,819,104 | 21,727,096 | 23,396,467 | 1,789,901 |\n\n\\*In addition to natural gas, the natural gas data of the high-performance alloys division includes mixed gas.\n\n\\*\\*2021 data were corrected pursuant to the GHG Protocol.\n\n\\*\\*\\*Consumption data are from primary data (invoices) reported by the managers of each of the facilities. Only in the absence of primary data, will secondary data (internal information control records) will be considered.\n\n\\*\\*\\*\\*The net calorific value will be established based on validated and updated sources according to the location of the facilities. Additionally, if necessary, conversion factor(s) can be applied for the change of units.\n\n### **\\_Energy intensity (GJ/metric ton)**\n\nGRI 302-3\n\n| GJ/t      | 2023  |           |       | 2022  |           |       | 2021  |           |       |\n|-----------|-------|-----------|-------|-------|-----------|-------|-------|-----------|-------|\n|           | Total | Stainless | HPAs  | Total | Stainless | HPAs  | Total | Stainless | HPAs  |\n| Intensity | 9.44  | 9.41      | 23.80 | 9.39  | 8.94      | 22.09 | 8.83  | 8.43      | 22.91 |\n\n#### **\\_Electricity consumption (GJ)**\n\n| GJ                | 2023      |           |         | 2022       |           |         | 2021       |            |         |\n|-------------------|-----------|-----------|---------|------------|-----------|---------|------------|------------|---------|\n|                   | Total     | Stainless | HPAs    | Total      | Stainless | HPAs    | Total      | Stainless  | HPAs    |\n| Renewable         | 3,454,840 | 2,979,276 | 475,564 | 2,604,379  | 2,296,229 | 308,150 | 2,028,873  | 2,632,566  | 295,851 |\n| Non-<br>renewable | 5,901,621 | 5,725,160 | 176,461 | 7,770,938  | 7,398,845 | 372,093 | 7,971,508  | 8,165,016  | 357,241 |\n| Total             | 9,356,461 | 8,704,436 | 652,025 | 10,375,317 | 9,695,074 | 680,243 | 10,000,381 | 10,797,582 | 653,092 |\n\n{251}------------------------------------------------\n\nImage /page/251/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle partially surrounding the text. The circle is thicker at the top and tapers off towards the bottom.\n\n#### **Water**\n\nShortage areas: permanent deficit situation in relation to water demand in a regional water resource system, characterized by either an arid climate or a rapidly growing demand in consumption.\n\nNon-shortage areas: relates to the other facilities.\n\n#### **\\_Water withdrawal (ML)**\n\n#### GRI 303-3\n\n| ML                | Total |                    |                | Stainless          |                |                    | HPAs           |  |\n|-------------------|-------|--------------------|----------------|--------------------|----------------|--------------------|----------------|--|\n| 2023              | Total | Non-shortage areas | Shortage areas | Non-shortage areas | Shortage areas | Non-shortage areas | Shortage areas |  |\n| Surface water     | 6,364 | 3,877              | 2,487          | 3,557              | 2,487          | 320                | 0              |  |\n| Groundwater       | 0     | 0                  | 0              | 0                  | 0              | 0                  | 0              |  |\n| Seawater          | 0     | 0                  | 0              | 0                  | 0              | 0                  | 0              |  |\n| Process water     | 5     | 5                  | 0              | 5                  | 0              | 0                  | 0              |  |\n| Third-party water | 782   | 596                | 186            | 367                | 186            | 229                | 0              |  |\n| Rainwater         | 271   | 0                  | 271            | 0                  | 271            | 0                  | 0              |  |\n| Total             | 7,422 | 4,478              | 2,944          | 3,929              | 2,944          | 549                | 0              |  |\n\n\\*39.08% of the water withdrawn in 2023 comes from regions with high or extremely high water stress.\n\n| ML                | Total |                       |                   | Stainless             |                   |                       | HPAs              |  |  |\n|-------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|--|--|\n| 2022              | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |  |  |\n| Surface water     | 7,859 | 4,721                 | 3,138             | 4,313                 | 3,138             | 408                   | 0                 |  |  |\n| Groundwater       | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |  |  |\n| Seawater          | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |  |  |\n| Process water     | 7     | 7                     | 0                 | 7                     | 0                 | 0                     | 0                 |  |  |\n| Third-party water | 786   | 492                   | 294               | 287                   | 294               | 205                   | 0                 |  |  |\n| Rainwater         | 288   | 0                     | 288               | 0                     | 288               | 0                     | 0                 |  |  |\n| Total             | 8,940 | 5,220                 | 3,720             | 4,607                 | 3,720             | 613                   | 0                 |  |  |\n\n{252}------------------------------------------------\n\nImage /page/252/Picture/1 description: This image is a table that shows the amount of water used in 2021, broken down by source (Surface water, Groundwater, Seawater, Process water, Third-party water, and Rainwater) and by type of use (Total, Stainless, and HPAs). The table also shows the amount of water used in non-shortage areas and shortage areas. The total amount of water used in 2021 was 9,518. The amount of surface water used was 8,391. The amount of groundwater used was 0. The amount of seawater used was 0. The amount of process water used was 4. The amount of third-party water used was 903. The amount of rainwater used was 220.\n\n#### **\\_Water discharge (ML)**\n\nGRI 303-4\n\n| ML                | Total |                       |                   | Stainless             |                   |                       | HPAs              |  |\n|-------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|--|\n| 2023              | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |  |\n| Surface water     | 3,440 | 3,440                 | 0                 | 3,439                 | 0                 | 1                     | 0                 |  |\n| Groundwater       | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |  |\n| Seawater          | 1,121 | 0                     | 1,121             | 0                     | 1,121             | 0                     | 0                 |  |\n| Third-party water | 315   | 315                   | 0                 | 26                    | 0                 | 289                   | 0                 |  |\n| Total             | 4,876 | 3,755                 | 1,121             | 3,465                 | 1,121             | 290                   | 0                 |  |\n\n| ML                | Total |                       |                   | Stainless             |                   | HPAs                  |                   |\n|-------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|\n| 2022              | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |\n| Surface water     | 4,105 | 4,105                 | 0                 | 4,044                 | 0                 | 61                    | 0                 |\n| Groundwater       | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Seawater          | 1,123 | 1                     | 1,122             | 0                     | 1,122             | 1                     | 0                 |\n| Third-party water | 264   | 264                   | 0                 | 34                    | 0                 | 230                   | 0                 |\n| Total             | 5,492 | 4,370                 | 1,122             | 4,078                 | 1,122             | 292                   | 0                 |\n\n{253}------------------------------------------------\n\nImage /page/253/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue circular shape. The blue circle is not fully closed, leaving a gap at the bottom right, giving it a dynamic, curved appearance. The overall design is clean and corporate, conveying a sense of strength and reliability.\n\n| ML                | Total |                           |                   | Stainless                 |                   | HPAs                      |                   |\n|-------------------|-------|---------------------------|-------------------|---------------------------|-------------------|---------------------------|-------------------|\n| 2021              | Total | Non-<br>shortage<br>areas | Shortage<br>areas | Non-<br>shortage<br>areas | Shortage<br>areas | Non-<br>shortage<br>areas | Shortage<br>areas |\n| Surface water     | 4,283 | 3,831                     | 452               | 3,770                     | 452               | 61                        | 0                 |\n| Groundwater       | 0     | 0                         | 0                 | 0                         | 0                 | 0                         | 0                 |\n| Seawater          | 1,397 | 0                         | 1,397             | 0                         | 1,397             | 0                         | 0                 |\n| Third-party water | 273   | 230                       | 43                | 0                         | 43                | 230                       | 0                 |\n| Total             | 5,953 | 4,061                     | 1,892             | 3,770                     | 1,892             | 291                       | 0                 |\n\n#### **\\_Water consumption (ML)**\n\nGRI 303-5\n\n| ML   | Total |                          |                   | Stainless                |                   | HPAs                     |                   |\n|------|-------|--------------------------|-------------------|--------------------------|-------------------|--------------------------|-------------------|\n|      | Total | Non<br>shortage<br>areas | Shortage<br>areas | Non<br>shortage<br>areas | Shortage<br>areas | Non<br>shortage<br>areas | Shortage<br>areas |\n| 2023 | 2,547 | 724                      | 1,823             | 465                      | 1,823             | 259                      | 0                 |\n| 2022 | 3,450 | 1,268                    | 2,182             | 946                      | 2,182             | 322                      | 0                 |\n| 2021 | 3,566 | 1,264                    | 2,302             | 942                      | 2,302             | 322                      | 0                 |\n\n{254}------------------------------------------------\n\nImage /page/254/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned to the left of a blue, crescent-shaped graphic. The crescent partially encircles the text, creating a circular or semi-circular design element.\n\n#### **Health & safety**\n\n#### **\\_Own personnel accident rate**\n\nGRI 403-9 and 403-10\n\n|                                                                                | 2023       |           |            | 2022       |           |            | 2021       |           |            |\n|--------------------------------------------------------------------------------|------------|-----------|------------|------------|-----------|------------|------------|-----------|------------|\n|                                                                                | Men        | Women     | Total      | Men        | Women     | Total      | Men        | Women     | Total      |\n| Hours worked                                                                   | 12,594,688 | 1,871,953 | 14,466,641 | 12,921,980 | 1,801,490 | 14,723,470 | 12,566,201 | 1,713,313 | 14,279,514 |\n| Total<br>accidents*                                                            | 120        | 10        | 130        | 125        | 3         | 128        | 195        | 4         | 199        |\n| Fatal<br>accidents                                                             | 0          | 0         | 0          | 0          | 0         | 0          | 1          | 0         | 1          |\n| Fatalities rate                                                                | 0          | 0         | 0          | 0          | 0         | 0          | 0.08       | 0         | 0.07       |\n| Accidents<br>with leave                                                        | 55         | 5         | 60         | 61         | 0         | 61         | 83         | 1         | 84         |\n| TRIR x<br>1,000,000**                                                          | 9.53       | 5.34      | 8.99       | 9.67       | 1.67      | 8.69       | 15.52      | 2.33      | 13.94      |\n| LTIFR x<br>1,000,000**                                                         | 4.37       | 2.67      | 4.15       | 4.72       | 0         | 4.14       | 6.61       | 0.58      | 5.88       |\n| Absenteeism<br>hours***                                                        | 790,770    | 123,681   | 914,451    | 668,476    | 104,554   | 773,030    | 646,021    | 58,415    | 704,436    |\n| Severity rate<br>= (no. of days<br>lost / no. of<br>hours<br>worked)*1,00<br>0 | 7.85       | 8.26      | 7.90       | 6.47       | 7.25      | 6.56       | 6.43       | 4.26      | 6.17       |\n| Abstenteesim<br>rate (%)                                                       | 6.28%      | 6.61%     | 6.32%      | 5.17%      | 5.80%     | 5.25%      | 5.14%      | 3.41%     | 4.93%      |\n| Work-related<br>illnesses                                                      | 7          | 0         | 7          | 0          | 0         | 0          | 0          | 0         | 0          |\n| Fatalities due<br>to work<br>related<br>illnesses                              | 0          | 0         | 0          | 0          | 0         | 0          | 0          | 0         | 0          |\n|                                                                                | 2023       |           |            | 2022       |           |            | 2021       |           |            |\n|                                                                                | Men        | Women     | Total      | Men        | Women     | Total      | Men        | Women     | Total      |\n| Hours worked                                                                   | 4,617,429  | 497,842   | 5,115,271  | 3,488,687  | 408,913   | 3,897,600  | 2,450,470  | 325,813   | 2,776,283  |\n| Total<br>accidents*                                                            | 22         | 3         | 25         | 50         | 7         | 57         | 117        | 4         | 121        |\n| Fatal<br>accidents                                                             | 0          | 0         | 0          | 0          | 0         | 0          | 1          | 0         | 1          |\n| Fatality rate                                                                  | 0          | 0         | 0          | 0          | 0         | 0          | 0.41       | 0         | 0.38       |\n| Accidents<br>with leave                                                        | 7          | 1         | 8          | 19         | 3         | 22         | 54         | 2         | 56         |\n| TRIR x<br>1,000,000**                                                          | 4.76       | 6.03      | 4.89       | 14.33      | 17.12     | 14.62      | 47.75      | 12.28     | 43.58      |\n| LTIFR x<br>1,000,000**                                                         | 1.52       | 2.01      | 1.56       | 5.45       | 7.34      | 5.64       | 22.04      | 6.14      | 20.17      |\n| Fatalities due<br>to work<br>related<br>illnesses                              | 0          | 0         | 0          | 0          | 0         | 0          | 0          | 0         | 0          |\n\n\\*There are no excluded workers.\n\n\\*\\* Data collected at BU level and consolidated at corporate level.\n\n{255}------------------------------------------------\n\nImage /page/255/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters. To the right of the text is a blue circle that is open on the left side, partially obscuring the text.\n\n#### **\\_Accident rate of contractors\\*\\***\n\nGRI 403-9 and 403-10\n\n\\*Total accident data include fatalities, accidents with leave, restricted work cases and minor injuries. The severity index is not included.\n\n\\*\\* Data on contractor absenteeism and contractor occupational diseases are not recorded.\n\n#### \\_Health and safety management systems\\*\\*\n\n#### GRI 403-8\n\n|                                                                                | 2023   | 2022*  | 2021   |\n|--------------------------------------------------------------------------------|--------|--------|--------|\n| Number of employees covered by<br>a health and safety management<br>system     | 7,485  | 7,863  | 7,877  |\n| Percentage of employees covered<br>by a health and safety<br>management system | 90.96% | 95.55% | 95.72% |\n\n\\*Corrected data\n\n\\*\\*Data is only available for employees, not for contractors.\n\n{256}------------------------------------------------\n\n### **Workforce\\***\n\n#### **\\_Total employees at year-end**\n\n#### GRI 2-7\n\n| Acerinox<br>Europa<br>(Spain) | Acerinox<br>S.A.<br>(Spain) | Bahru<br>(Malaysia) | Columbus<br>(South<br>Africa) | Inoxfil<br>(Spain) | NAS (US) | Roldán<br>(Spain) | VDM<br>(Germany<br>/ US) | Subsidiarie<br>s and<br>Service | Total |\n|-------------------------------|-----------------------------|---------------------|-------------------------------|--------------------|----------|-------------------|--------------------------|---------------------------------|-------|\n| 1,746                         | 114                         | 427                 | 1,248                         | 96                 | 1,606    | 361               | 2,047                    | 584                             | 8,229 |\n\n\\*The staff figure in this Appendix does not include 10 members of senior management.\n\n#### **\\_Average number of employees during 2023**\n\nGRI 2-7\n\n| Acerinox<br>Europa<br>(Spain) | Acerinox<br>S.A. | Bahru | Columbus | Inoxfil | NAS   | Roldán | VDM   | Subsidiaries<br>and Service<br>centers |\n|-------------------------------|------------------|-------|----------|---------|-------|--------|-------|----------------------------------------|\n| 1,765                         | 108              | 418   | 1,260    | 98      | 1,614 | 365    | 2,028 | 571                                    |\n\n#### **\\_Number of employees by contract type and gender**\n\nGRI 2-7\n\n|                    |       | 2023  | 2022  | 2021  |\n|--------------------|-------|-------|-------|-------|\n| Permanent contract | Men   | 6,910 | 6,874 | 6,890 |\n|                    | Women | 1,065 | 1,007 | 998   |\n|                    | Total | 7,975 | 7,881 | 7,888 |\n| Temporary contract | Men   | 226   | 209   | 199   |\n|                    | Women | 28    | 34    | 41    |\n|                    | Total | 254   | 243   | 240   |\n| Total              |       | 8,229 | 8,124 | 8,128 |\n\n#### **\\_Number of employees by type of workday and gender**\n\nGRI 2-7\n\n|           |       | 2023  | 2022  | 2021  |\n|-----------|-------|-------|-------|-------|\n| Full time | Men   | 7,119 | 7,062 | 7,069 |\n|           | Women | 1,029 | 986   | 982   |\n|           | Total | 8,148 | 8,048 | 8,051 |\n| Part-time | Men   | 17    | 21    | 20    |\n|           | Women | 64    | 55    | 57    |\n|           | Total | 81    | 76    | 77    |\n| Total     |       | 8,229 | 8,124 | 8,128 |\n\n{257}------------------------------------------------\n\nImage /page/257/Picture/1 description: The image is a title that reads \"Number of employees by age range and gender\".\n\nGRI 2-7\n\n|              |              | 2023         | 2022         | 2021         |\n|--------------|--------------|--------------|--------------|--------------|\n| <30          | Men          | 816          | 835          | 852          |\n|              | Women        | 167          | 159          | 171          |\n|              | <b>Total</b> | <b>983</b>   | <b>994</b>   | <b>1,023</b> |\n| 30-50        | Men          | 4,006        | 4,061        | 4,167        |\n|              | Women        | 639          | 607          | 625          |\n|              | <b>Total</b> | <b>4,645</b> | <b>4,668</b> | <b>4,792</b> |\n| >50          | Men          | 2,314        | 2,187        | 2,070        |\n|              | Women        | 287          | 275          | 243          |\n|              | <b>Total</b> | <b>2,601</b> | <b>2,462</b> | <b>2,313</b> |\n| <b>Total</b> |              | 8,229        | 8,124        | 8,128        |\n\n#### **\\_Number of employees by professional category and gender**\n\n#### **GRI 2-7 / 405-1**\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 25    | 19    | 15    |\n|                      | Women | 7     | 5     | 4     |\n|                      | Total | 32    | 24    | 19    |\n| Manager              | Men   | 243   | 220   | 220   |\n|                      | Women | 49    | 49    | 45    |\n|                      | Total | 292   | 269   | 265   |\n| Analyst              | Men   | 624   | 570   | 572   |\n|                      | Women | 226   | 176   | 173   |\n|                      | Total | 850   | 746   | 745   |\n| Specialist           | Men   | 332   | 321   | 312   |\n|                      | Women | 118   | 138   | 129   |\n|                      | Total | 450   | 459   | 441   |\n| Administrative staff | Men   | 599   | 598   | 596   |\n|                      | Women | 476   | 458   | 471   |\n|                      | Total | 1,075 | 1,056 | 1,067 |\n| Operator             | Men   | 5,313 | 5,356 | 5,374 |\n|                      | Women | 217   | 214   | 217   |\n|                      | Total | 5,530 | 5,570 | 5,591 |\n| Total                |       | 8,229 | 8,124 | 8,128 |\n\n{258}------------------------------------------------\n\n#### **\\_Number of employees by type of contract and age range**\n\nGRI 2-7\n\n|                    |       | 2023         | 2022         | 2021         |\n|--------------------|-------|--------------|--------------|--------------|\n|                    | <30   | 859          | 872          | 902          |\n| Permanent contract | 30-50 | 4,528        | 4,555        | 4,685        |\n|                    | >50   | 2,587        | 2,454        | 2,301        |\n|                    | Total | <b>7,974</b> | <b>7,881</b> | <b>7,888</b> |\n| Temporary contract | <30   | 124          | 122          | 121          |\n|                    | 30-50 | 116          | 113          | 107          |\n|                    | >50   | 15           | 8            | 12           |\n|                    | Total | <b>255</b>   | <b>243</b>   | <b>240</b>   |\n| Total              |       | 8,229        | 8,124        | 8,128        |\n\n#### **\\_Number of employees by type of workday and age range**\n\n#### GRI 2-7\n\n|           |       | 2023  | 2022  | 2021  |\n|-----------|-------|-------|-------|-------|\n| Full time | <30   | 975   | 992   | 1,020 |\n|           | 30-50 | 4,586 | 4,611 | 4,736 |\n|           | >50   | 2,587 | 2,445 | 2,295 |\n|           | Total | 8,148 | 8,048 | 8,051 |\n| Part-time | <30   | 8     | 2     | 3     |\n|           | 30-50 | 58    | 57    | 56    |\n|           | >50   | 15    | 17    | 18    |\n|           | Total | 81    | 76    | 77    |\n| Total     |       | 8,229 | 8,124 | 8,128 |\n\n#### **\\_Number of employees by type of contract and professional category**\n\nGRI 2-7\n\n|                    |                      | 2023  | 2022  | 2021  |\n|--------------------|----------------------|-------|-------|-------|\n| Permanent contract | Director             | 32    | 24    | 19    |\n|                    | Manager              | 286   | 267   | 265   |\n|                    | Analyst              | 852   | 744   | 744   |\n|                    | Specialist           | 438   | 443   | 429   |\n|                    | Administrative staff | 1,035 | 1,027 | 1,042 |\n|                    | Operator             | 5,336 | 5,376 | 5,389 |\n|                    | Total                | 7,979 | 7,881 | 7,888 |\n| Temporary contract | Director             |       |       |       |\n|                    | Manager              | 7     | 2     |       |\n|                    | Analyst              |       | 2     | 1     |\n|                    | Specialist           | 7     | 16    | 12    |\n|                    | Administrative staff | 40    | 29    | 25    |\n|                    | Operator             | 196   | 194   | 202   |\n|                    | Total                | 250   | 243   | 240   |\n| Total              |                      | 8,229 | 8,124 | 8,128 |\n\n{259}------------------------------------------------\n\n#### **\\_Number of employees by type of workday and professional category**\n\n#### GRI 2-7\n\n|           |                      | 2023  | 2022  | 2021  |\n|-----------|----------------------|-------|-------|-------|\n| Full time | Director             | 31    | 24    | 19    |\n|           | Manager              | 293   | 269   | 265   |\n|           | Analyst              | 852   | 744   | 744   |\n|           | Specialist           | 444   | 450   | 433   |\n|           | Administrative staff | 1,022 | 1,011 | 1,019 |\n|           | Operator             | 5,507 | 5,550 | 5,571 |\n|           | Total                | 8,149 | 8,048 | 8,051 |\n| Part-time | Director             | 1     |       |       |\n|           | Manager              |       |       |       |\n|           | Analyst              | 4     | 2     | 1     |\n|           | Specialist           | 4     | 9     | 8     |\n|           | Administrative staff | 52    | 45    | 48    |\n|           | Operator             | 19    | 20    | 20    |\n|           | Total                | 80    | 76    | 77    |\n\n#### **Employment**\n\n#### **\\_New hires by age group and gender**\n\n|       |       | 2023  | 2022  | 2021  |\n|-------|-------|-------|-------|-------|\n| <30   | Men   | 646   | 808   | 437   |\n|       | Women | 138   | 218   | 136   |\n|       | Total | 784   | 1,026 | 573   |\n| 30-50 | Men   | 688   | 692   | 519   |\n|       | Women | 115   | 98    | 73    |\n|       | Total | 803   | 790   | 592   |\n| >50   | Men   | 49    | 42    | 33    |\n|       | Women | 7     | 11    | 8     |\n|       | Total | 56    | 53    | 41    |\n| Total |       | 1,643 | 1,869 | 1,206 |\n\n#### **\\_Hiring rate**\n\n#### GRI 401-1\n\n|       |       | 2023   | 2022    | 2021   |\n|-------|-------|--------|---------|--------|\n| <30   | Men   | 79.36% | 96.77%  | 51.29% |\n|       | Women | 84.66% | 137.11% | 79.53% |\n|       | Total | 80.25% | 103.22% | 56.01% |\n| 30-50 | Men   | 17.25% | 17.04%  | 12.46% |\n|       | Women | 18.37% | 16.14%  | 11.68% |\n|       | Total | 17.40% | 16.92%  | 12.35% |\n| >50   | Men   | 2.14%  | 1.92%   | 1.59%  |\n|       | Women | 2.55%  | 4.00%   | 3.29%  |\n|       | Total | 2.18%  | 2.15%   | 1.77%  |\n| Total |       | 20.00% | 23.01%  | 14.84% |\n\n{260}------------------------------------------------\n\nImage /page/260/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned within a partial blue circle. The circle is open at the top and curves around the text, giving the impression of an enclosure or a stylized letter \"C\".\n\n#### **\\_Voluntary resignations**\n\n|       |       | 2023 | 2022 | 2021 |\n|-------|-------|------|------|------|\n| <30   | Men   | 136  | 139  | 100  |\n|       | Women | 19   | 27   | 12   |\n|       | Total | 155  | 166  | 112  |\n| 30-50 | Men   | 200  | 195  | 137  |\n|       | Women | 36   | 45   | 25   |\n|       | Total | 236  | 240  | 162  |\n| >50   | Men   | 30   | 57   | 42   |\n|       | Women | 6    | 12   | 11   |\n|       | Total | 36   | 69   | 53   |\n| Total |       | 427  | 475  | 327  |\n\n#### **\\_Staff turnover rate**\n\nGRI 401-1\n\n|       |       | 2023   | 2022   | 2021   |\n|-------|-------|--------|--------|--------|\n| <30   | Men   | 21.50% | 20.72% | 15.73% |\n|       | Women | 14.11% | 18.87% | 7.02%  |\n|       | Total | 20.27% | 20.42% | 14.27% |\n| 30-50 | Men   | 6.39%  | 6.28%  | 4.25%  |\n|       | Women | 6.87%  | 7.91%  | 4.32%  |\n|       | Total | 6.46%  | 6.49%  | 4.26%  |\n| >50   | Men   | 1.96%  | 6.22%  | 7.44%  |\n|       | Women | 3.64%  | 7.64%  | 9.47%  |\n|       | Total | 2.14%  | 6.38%  | 7.65%  |\n| Total |       | 6.75%  | 8.16%  | 6.49%  |\n\n#### **Layoffs**\n\n#### **\\_Number of layoffs by age range and gender**\n\n|       |       | 2023 | 2022 | 2021 |\n|-------|-------|------|------|------|\n| <30   | Men   | 39   | 34   | 34   |\n|       | Women | 4    | 3    | 3    |\n|       | Total | 43   | 37   | 34   |\n| 30-50 | Men   | 55   | 60   | 40   |\n|       | Women | 7    | 3    | 2    |\n|       | Total | 62   | 63   | 42   |\n| >50   | Men   | 15   | 15   | 67   |\n|       | Women | 4    | 3    | 2    |\n|       | Total | 19   | 18   | 69   |\n| Total |       | 124  | 118  | 145  |\n\n{261}------------------------------------------------\n\nImage /page/261/Picture/1 description: The image contains the title \"\\_Number of layoffs by professional category and gender\".\n\n|                      |       | 2023 | 2022 | 2021 |\n|----------------------|-------|------|------|------|\n| Director             | Men   |      |      |      |\n|                      | Women |      |      |      |\n|                      | Total | 0    | 0    | 0    |\n| Manager              | Men   |      | 3    |      |\n|                      | Women | 1    | 1    | 2    |\n|                      | Total | 1    | 4    | 2    |\n| Analyst              | Men   | 4    | 4    | 2    |\n|                      | Women |      |      |      |\n|                      | Total | 4    | 4    | 2    |\n| Specialist           | Men   | 6    | 2    | 3    |\n|                      | Women | 2    | 1    |      |\n|                      | Total | 8    | 3    | 3    |\n| Administrative staff | Men   | 2    | 1    | 6    |\n|                      | Women | 5    | 1    | 1    |\n|                      | Total | 7    | 2    | 7    |\n| Operator             | Men   | 96   | 99   | 130  |\n|                      | Women | 8    | 6    | 1    |\n|                      | Total | 104  | 105  | 131  |\n| Total                |       | 124  | 118  | 145  |\n\n#### **\\_Number of layoffs by age range and gender**\n\n|       |       | 2023 | 2022 | 2021 |\n|-------|-------|------|------|------|\n| <30   | Men   | 39   | 34   | 34   |\n|       | Women | 4    | 3    | 3    |\n|       | Total | 43   | 37   | 34   |\n| 30-50 | Men   | 55   | 60   | 40   |\n|       | Women | 7    | 3    | 2    |\n|       | Total | 62   | 63   | 42   |\n| >50   | Men   | 15   | 15   | 67   |\n|       | Women | 4    | 3    | 2    |\n|       | Total | 19   | 18   | 69   |\n| Total |       | 124  | 118  | 145  |\n\n{262}------------------------------------------------\n\n## **Training and performance \\_Number of employees trained**\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 15    | 13    | 6     |\n|                      | Women | 7     | 5     | 5     |\n|                      | Total | 22    | 18    | 11    |\n| Manager              | Men   | 147   | 205   | 159   |\n|                      | Women | 36    | 46    | 42    |\n|                      | Total | 183   | 251   | 201   |\n| Analyst              | Men   | 439   | 487   | 427   |\n|                      | Women | 166   | 167   | 134   |\n|                      | Total | 605   | 654   | 561   |\n| Specialist           | Men   | 203   | 248   | 188   |\n|                      | Women | 85    | 99    | 64    |\n|                      | Total | 288   | 347   | 252   |\n| Administrative staff | Men   | 277   | 428   | 382   |\n|                      | Women | 190   | 274   | 289   |\n|                      | Total | 467   | 702   | 671   |\n| Operator             | Men   | 4,016 | 4,098 | 3,517 |\n|                      | Women | 197   | 233   | 190   |\n|                      | Total | 4,213 | 4,331 | 3,707 |\n| Total                |       | 5,778 | 6,303 | 5,403 |\n\n#### **\\_Training hours**\n\n|                      |       | 2023    | 2022    | 2021    |\n|----------------------|-------|---------|---------|---------|\n| Director             | Men   | 119     | 92      | 95      |\n|                      | Women | 132     | 71      | 73      |\n|                      | Total | 251     | 163     | 168     |\n| Manager              | Men   | 3,381   | 5,150   | 4,469   |\n|                      | Women | 1,340   | 1,031   | 1,260   |\n|                      | Total | 4,721   | 6,181   | 5,729   |\n| Analyst              | Men   | 14,109  | 13,990  | 8,811   |\n|                      | Women | 4,043   | 5,292   | 2,459   |\n|                      | Total | 18,152  | 19,282  | 11,270  |\n| Specialist           | Men   | 6,116   | 6,378   | 3,207   |\n|                      | Women | 2,229   | 2,528   | 903     |\n|                      | Total | 8,345   | 8,906   | 4,110   |\n| Administrative staff | Men   | 6,892   | 10,244  | 7,851   |\n|                      | Women | 7,430   | 7,399   | 6,858   |\n|                      | Total | 14,322  | 17,643  | 14,709  |\n| Operator             | Men   | 522,069 | 395,500 | 372,473 |\n|                      | Women | 32,006  | 23,074  | 23,083  |\n|                      | Total | 554,075 | 418,574 | 395,556 |\n| Total                |       | 599,866 | 470,749 | 431,542 |\n\n{263}------------------------------------------------\n\n#### **\\_Average hours of training per employee**\n\n#### GRI 404-1\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 7.9   | 4.8   | 6.3   |\n|                      | Women | 18.9  | 14.2  | 18.3  |\n|                      | Total | 11.4  | 6.8   | 8.8   |\n| Manager              | Men   | 23.0  | 23.4  | 20.3  |\n|                      | Women | 37.2  | 21.0  | 28.0  |\n|                      | Total | 25.8  | 23.0  | 21.6  |\n| Analyst              | Men   | 32.1  | 24.5  | 15.4  |\n|                      | Women | 24.4  | 30.1  | 14.2  |\n|                      | Total | 30.0  | 25.9  | 15.1  |\n| Specialist           | Men   | 30.1  | 19.9  | 10.3  |\n|                      | Women | 1.0   | 18.3  | 7.0   |\n|                      | Total | 29.0  | 19.4  | 9.3   |\n| Administrative staff | Men   | 24.9  | 17.1  | 13.2  |\n|                      | Women | 39.1  | 16.2  | 14.6  |\n|                      | Total | 31.0  | 16.7  | 13.8  |\n| Operator             | Men   | 130.0 | 73.8  | 69.3  |\n|                      | Women | 162.5 | 107.8 | 106.4 |\n|                      | Total | 131.5 | 75.2  | 70.8  |\n| Total                |       | 73.5  | 58.0  | 53.1  |\n\n#### **\\_Number of employees who have received performance evaluations**\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 17    | 14    | 8     |\n|                      | Women | 5     | 5     | 4     |\n|                      | Total | 22    | 19    | 12    |\n| Manager              | Men   | 136   | 157   | 100   |\n|                      | Women | 34    | 40    | 33    |\n|                      | Total | 170   | 197   | 133   |\n| Analyst              | Men   | 413   | 297   | 253   |\n|                      | Women | 135   | 110   | 117   |\n|                      | Total | 548   | 407   | 370   |\n| Specialist           | Men   | 91    | 105   | 104   |\n|                      | Women | 55    | 43    | 44    |\n|                      | Total | 146   | 148   | 148   |\n| Administrative staff | Men   | 218   | 275   | 268   |\n|                      | Women | 139   | 164   | 173   |\n|                      | Total | 357   | 439   | 441   |\n| Operator             | Men   | 1,654 | 1,171 | 1,185 |\n|                      | Women | 84    | 80    | 69    |\n|                      | Total | 1,738 | 1,251 | 1,254 |\n| Total                |       | 2,981 | 2,461 | 2,358 |\n\n{264}------------------------------------------------\n\n#### **\\_% staff subject to performance evaluation**\n\n#### GRI 404-3\n\n|                      |       | 2023    | 2022    | 2021    |\n|----------------------|-------|---------|---------|---------|\n| Director             | Men   | 85.00%  | 77.78%  | 53.33%  |\n|                      | Women | 100.00% | 100.00% | 100.00% |\n|                      | Total | 88.00%  | 79.17%  | 63.16%  |\n| Manager              | Men   | 65.00%  | 75.48%  | 47.62%  |\n|                      | Women | 74.00%  | 85.11%  | 76.74%  |\n|                      | Total | 67.00%  | 73.23%  | 50.19%  |\n| Analyst              | Men   | 70.00%  | 54.90%  | 47.29%  |\n|                      | Women | 69.00%  | 67.90%  | 73.13%  |\n|                      | Total | 70.00%  | 54.56%  | 49.66%  |\n| Specialist           | Men   | 33.00%  | 38.32%  | 40.63%  |\n|                      | Women | 57.00%  | 41.75%  | 46.32%  |\n|                      | Total | 39.00%  | 32.24%  | 33.56%  |\n| Administrative staff | Men   | 38.00%  | 47.58%  | 46.21%  |\n|                      | Women | 36.00%  | 42.82%  | 42.61%  |\n|                      | Total | 37.00%  | 41.57%  | 41.33%  |\n| Operator             | Men   | 32.00%  | 22.33%  | 22.47%  |\n|                      | Women | 39.00%  | 37.56%  | 33.33%  |\n|                      | Total | 32.00%  | 22.46%  | 22.43%  |\n| Total                |       | 40.00%  | 30.29%  | 29.01%  |\n\n#### **Employee benefits**\n\n#### **\\_Parental leave**\n\nGRI 401-3\n\n|                                                                                                                                            |       | 2023  | 2022  | 2021  |\n|--------------------------------------------------------------------------------------------------------------------------------------------|-------|-------|-------|-------|\n| Employees who have been eligible for<br>parental leave                                                                                     | Men   | 5,802 | 6,267 | 6,214 |\n|                                                                                                                                            | Women | 875   | 823   | 818   |\n|                                                                                                                                            | Total | 6,677 | 7,090 | 7,032 |\n|                                                                                                                                            | Men   | 265   | 282   | 251   |\n| Employees who have taken parental<br>leave                                                                                                 | Women | 40    | 53    | 47    |\n|                                                                                                                                            | Total | 305   | 335   | 298   |\n| Employees who have returned to work<br>after parental leave has ended                                                                      | Men   | 263   | 280   | 242   |\n|                                                                                                                                            | Women | 38    | 37    | 35    |\n|                                                                                                                                            | Total | 301   | 317   | 277   |\n| Employees who have returned to work<br>after completing parental leave and<br>who were still employed 12 months<br>after returning to work | Men   | 249   | 241   | 237   |\n|                                                                                                                                            | Women | 35    | 32    | 33    |\n|                                                                                                                                            | Total | 284   | 273   | 270   |\n\n{265}------------------------------------------------\n\n#### **\\_Number of employees covered by collective bargaining agreements**\n\n#### GRI 2-30\n\n|                      | 2023                           |                                              |\n|----------------------|--------------------------------|----------------------------------------------|\n|                      | Employees subject to agreement | Percentage of employees subject to agreement |\n| Argentina            | 9                              | 100%                                         |\n| Australia            | 0                              | — %                                          |\n| Austria              | 4                              | 100%                                         |\n| Belgium              | 4                              | 50%                                          |\n| Brazil               | 2                              | 100%                                         |\n| Canada               | 0                              | — %                                          |\n| Chile                | 16                             | 100%                                         |\n| China                | 0                              | — %                                          |\n| Colombia             | 2                              | 100%                                         |\n| France               | 17                             | 100%                                         |\n| Germany              | 1,777                          | 97%                                          |\n| India                | 0                              | — %                                          |\n| Indonesia            | 0                              | — %                                          |\n| Italy                | 60                             | 100%                                         |\n| Japan                | 0                              | — %                                          |\n| Malaysia             | 180                            | 45%                                          |\n| Mexico               | 3                              | 100%                                         |\n| Peru                 | 2                              | 100%                                         |\n| Poland               | 24                             | 100%                                         |\n| Portugal             | 26                             | 100%                                         |\n| Singapore            | 1                              | 100%                                         |\n| South Africa         | 643                            | 53%                                          |\n| South Korea          | 0                              | — %                                          |\n| Spain                | 2,637                          | 99%                                          |\n| Sweden               | 24                             | 92%                                          |\n| Switzerland          | 3                              | 100%                                         |\n| Taiwan               | 0                              | — %                                          |\n| Thailand             | 0                              | — %                                          |\n| Turkey               | 0                              | — %                                          |\n| UK                   | 34                             | 100%                                         |\n| United Arab Emirates | 0                              | — %                                          |\n| United States        | 0                              | — %                                          |\n| Vietnam              | 0                              | — %                                          |\n\n{266}------------------------------------------------\n\nImage /page/266/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned inside a blue circle that is open on the right side, resembling a crescent shape. The overall design is simple and corporate.\n\n#### **\\_Reinstatement and retention rate**\n\n|                         |       | 2023   | 2022   | 2021   |\n|-------------------------|-------|--------|--------|--------|\n| Return to work rate     | Men   | 99.00% | 99.29% | 96.41% |\n|                         | Women | 95.00% | 69.81% | 74.47% |\n|                         | Total | 99.00% | 92.95% | 95.99% |\n| Employee retention rate | Men   | 87.00% | 85.46% | 94.42% |\n|                         | Women | 90.00% | 60.38% | 70.21% |\n|                         | Total | 88.00% | 92.95% | 95.99% |\n\n#### **Contractors \\_Number of contractors**\n\n|                 |       | 2023  | 2022  | 2021  |\n|-----------------|-------|-------|-------|-------|\n| Total workforce | Men   | 1,305 | 1,200 | 1,225 |\n|                 | Women | 236   | 216   | 211   |\n|                 | Total | 1,541 | 1,416 | 1,436 |\n\n#### **Remuneration and gap**\n\n#### **\\_Average compensation by professional category (EUR)**\n\n|                      | 2023        | 2022        | 2021        |\n|----------------------|-------------|-------------|-------------|\n| Director             | EUR 269,300 | EUR 308,121 | EUR 293,104 |\n| Manager              | EUR 144,188 | EUR 131,036 | EUR 119,063 |\n| Analyst              | EUR 73,836  | EUR 72,698  | EUR 68,035  |\n| Specialist           | EUR 58,221  | EUR 56,414  | EUR 49,143  |\n| Administrative staff | EUR 53,935  | EUR 51,493  | EUR 49,574  |\n| Operator             | EUR 50,615  | EUR 50,628  | EUR 47,865  |\n\n#### **\\_Average compensation by age range (EUR)**\n\n|       | 2023       | 2022       | 2021       |\n|-------|------------|------------|------------|\n| <30   | EUR 49,192 | EUR 44,791 | EUR 40,471 |\n| 30-50 | EUR 55,570 | EUR 53,589 | EUR 50,592 |\n| >50   | EUR 69,544 | EUR 66,050 | EUR 63,324 |\n\n#### **\\_Average remuneration by gender (EUR)**\n\n|       | 2023       | 2022       | 2021       |\n|-------|------------|------------|------------|\n| Men   | EUR 58,699 | EUR 56,784 | EUR 53,476 |\n| Women | EUR 53,317 | EUR 51,762 | EUR 48,133 |\n\n{277}------------------------------------------------\n\n## **6.4 GRI table of contents**\n\nImage /page/277/Picture/2 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open on the left side, creating a crescent shape that curves around the text. The text is in a dark color, contrasting with the white background, while the circle is in a vibrant blue.\n\n| Statement of use                   |                                                                                     | Acerinox has reported in accordance<br>with the GRI Standards for the period<br>from January 1 to December 31, 2023.                                                                                                                   |\n|------------------------------------|-------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| GRI 1 used                         |                                                                                     | GRI 1: Foundation 2021                                                                                                                                                                                                                 |\n| Applicable GRI sector standards    |                                                                                     | n/a                                                                                                                                                                                                                                    |\n| GRI standard                       | Content                                                                             | Page / Reference                                                                                                                                                                                                                       |\n| General disclosures                |                                                                                     |                                                                                                                                                                                                                                        |\n|                                    | 2-1 Organizational details                                                          | Name of the organization: Acerinox<br>S.A. Registered office: Calle Santiago<br>de Compostela 100, 28035 Madrid,<br>Spain 10-16                                                                                                        |\n|                                    | 2-2 Entities included in the organization's<br>sustainability reporting             | 10-16                                                                                                                                                                                                                                  |\n|                                    | 2-3 Reporting period, frequency and contact<br>point                                | 2023 calendar year (January 1 to<br>December 31, 2023) The reporting<br>cycle is annual.<br>sustainability@acerinox.com                                                                                                                |\n|                                    | 2-4 Restatements of information                                                     | Data modified from previous years<br>includes an explanatory note.                                                                                                                                                                     |\n|                                    | 2-5 External assurance                                                              | The Acerinox Group engages an<br>independent third party to undertake<br>the external assurance of the report,<br>pursuant to International Standard on<br>Assurance Engagements (ISAE) 3000:<br>PricewaterhouseCoopers Auditores,S.L. |\n|                                    | 2-6 Activities, value chain and other<br>business relationships                     | 9-10; 14-16; 116-120                                                                                                                                                                                                                   |\n|                                    | 2-7 Employees                                                                       | 106-111, Appendix 6.2                                                                                                                                                                                                                  |\n| GRI 2: General Disclosures<br>2021 | 2-9 Governance structure and composition                                            | 5; 32-37                                                                                                                                                                                                                               |\n|                                    | 2-10 Nomination and selection of the<br>highest governance body                     | 32-37; 70                                                                                                                                                                                                                              |\n|                                    | 2-11 Chair of the highest governance body                                           | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-12 Role of the highest governance body in<br>overseeing the management of impacts | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-13 Delegation of responsibility for<br>managing impacts                           | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-14 Role of the highest governance body in<br>sustainability reporting             | 32-37; 63; 70                                                                                                                                                                                                                          |\n|                                    | 2-15 Conflicts of interest                                                          | 72-75                                                                                                                                                                                                                                  |\n|                                    | 2-16 Communication of critical concerns                                             | 72-75                                                                                                                                                                                                                                  |\n|                                    | 2-17 Collective knowledge of the highest<br>governance body                         | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-18 Evaluation of the performance of the<br>highest governance body                | 32; 70; Appendix 6.2                                                                                                                                                                                                                   |\n\n{278}------------------------------------------------\n\nImage /page/278/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, surrounded by a blue circle that is open on the right side.\n\n|                                            | 2-20 Process to determine remuneration                                                  | 32-37                   |\n|--------------------------------------------|-----------------------------------------------------------------------------------------|-------------------------|\n|                                            | 2-22 Statement on sustainable development<br>strategy                                   | 7-8; 63                 |\n|                                            | 2-23 Policy commitments                                                                 | Report-various sections |\n|                                            | 2-24 Embedding policy commitments                                                       | Report-various sections |\n| GRI 2: General Disclosures<br>2021         | 2-25 Processes to remediate negative<br>impacts                                         | 71-75                   |\n|                                            | 2-26 Mechanisms for seeking advice and<br>raising concerns                              | 71-75                   |\n|                                            | 2-27 Compliance with laws and regulations                                               | 71-75                   |\n|                                            | 2-28 Membership associations                                                            | 120-122                 |\n|                                            | 2-29 Approach to stakeholder engagement                                                 | 63-66                   |\n|                                            | 2-30 Collective bargaining agreements                                                   | 106-109; Appendix 6.2   |\n| Material topics                            |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-1 Process to determine material topics                                                | 63-65                   |\n|                                            | 3-2 List of material topics                                                             | 63                      |\n| Economic performance                       |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n|                                            | 201-1 Direct economic value generated and<br>distributed                                | 76-80                   |\n| GRI 201: Economic<br>performance 2016      | 201-2 Financial implications and other risks<br>and opportunities due to climate change | 82                      |\n|                                            | 201-4 Financial assistance received from<br>government                                  | 76-80                   |\n| Indirect economic impacts                  |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n| GRI 203: Indirect economic<br>impacts 2016 | 203-1 Infrastructure investments and<br>services supported                              | 103-104                 |\n|                                            | 203-2 Significant indirect economic impacts                                             | 103-104                 |\n| Procurement practices                      |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n| GRI 204: Procurement<br>Practices 2016     | 204-1 Proportion of spending on local<br>suppliers                                      | 118-120                 |\n| Anti-corruption                            |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n\n{279}------------------------------------------------\n\nImage /page/279/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is positioned inside a white circle, which is partially surrounded by a thick, dark blue crescent shape. The crescent shape starts at the top right of the circle and extends around the bottom, ending at the top left of the circle.\n\n| GRI 205: Anti-corruption<br>2016 | 205-1 Operations assessed for risks related<br>to corruption                      | 100% of the Group is obliged to comply<br>with the anti-corruption guidelines.<br>Moreover, Acerinox is an adherent to<br>the principles of the United Nations<br>Global Compact. |\n|----------------------------------|-----------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n|                                  | 205-2 Communication and training about<br>anti-corruption policies and procedures | 71-75                                                                                                                                                                             |\n|                                  | 205-3 Confirmed incidents of corruption and<br>actions taken                      | No incidences of corruption were<br>registered in 2023.                                                                                                                           |\n\n#### **Anti-competitive behavior**\n\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                        | 63-65                                                                                                                           |\n|--------------------------------------------|------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|\n| GRI 206: Anti-competitive<br>behavior 2016 | 206-1 Legal actions for anti-competitive<br>behavior, anti-trust, and monopoly practices | No significant legal actions for anti-<br>competitive behavior, anti-trust or<br>monopoly practices were registered in<br>2023. |\n\n#### **Taxation**\n\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n|                                                                         | 207-1 Approach to tax                                                                                                                                                                                   | 76-80                                                                                                                                                                                                                                                                                                          |\n| GRI 207: Tax 2019                                                       | 207-2 Tax governance, control, and risk<br>management                                                                                                                                                   | 76-80                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 207-3 Stakeholder engagement and<br>management of concerns related to tax                                                                                                                               | 76-80                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 207-4 Country-by-country reporting                                                                                                                                                                      | 76-80                                                                                                                                                                                                                                                                                                          |\n| Materials                                                               |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 301: Materials<br>2016                                              | 301-1 Materials used by weight or volume                                                                                                                                                                | 97-102, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n|                                                                         | 301-2 Recycled input materials used                                                                                                                                                                     | 97-102, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n| Energy                                                                  |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 302-1 Energy consumption within the<br>organization                                                                                                                                                     | 89-90, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 302: Energy 2016                                                    | 302-3 Energy intensity                                                                                                                                                                                  | 89-90, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 302-4 Reduction of energy consumption                                                                                                                                                                   | 89-90, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| Water and effluents                                                     |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 303: Water and<br>effluents 2018                                    | 303-1 Interactions with water as a shared<br>resource                                                                                                                                                   | 91-95                                                                                                                                                                                                                                                                                                          |\n| GRI 303: Water and<br>effluents 2018                                    | 303-2 Management of water discharge-related<br>impacts                                                                                                                                                  | 91-95                                                                                                                                                                                                                                                                                                          |\n| GRI 303: Water and<br>effluents 2018                                    | 303-3 Water withdrawal                                                                                                                                                                                  | 91-95, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 303: Water and<br>effluents 2018                                    | 303-4 Water discharge                                                                                                                                                                                   | 91-95, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 303: Water and<br>effluents 2018                                    | 303-5 Water consumption                                                                                                                                                                                 | 91-95, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| Biodiversity                                                            |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65, 96                                                                                                                                                                                                                                                                                                      |\n| Emissions                                                               |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 305-1 Direct (Scope 1) GHG emissions                                                                                                                                                                    | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 305-2 Energy indirect (Scope 2) GHG emissions                                                                                                                                                           | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 305-3 Other indirect (Scope 3) GHG emissions                                                                                                                                                            | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 305: Emissions<br>2016                                              | 305-4 GHG emissions intensity                                                                                                                                                                           | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 305-5 Reduction of GHG emissions                                                                                                                                                                        | 81-88                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx),<br>and other significant air emissions                                                                                                                | 81-88, 95, Appendix 6.2                                                                                                                                                                                                                                                                                        |\n| Waste                                                                   |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 306-1 Waste generation and significant waste-<br>related impacts                                                                                                                                        | 97-100                                                                                                                                                                                                                                                                                                         |\n|                                                                         | 306-2 Management of significant waste-related<br>impacts                                                                                                                                                | 97-100                                                                                                                                                                                                                                                                                                         |\n| GRI 306: Waste 2020                                                     | 306-3 Waste generated                                                                                                                                                                                   | 97-100, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n|                                                                         | 306-4 Waste diverted from disposal                                                                                                                                                                      | 97-100, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n|                                                                         | 306-5 Waste directed to disposal                                                                                                                                                                        | 97-100, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n| Supplier environmental assessment                                       |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 308: Supplier<br>environmental<br>assessment 2016                   | 308-1 New suppliers that were screened using<br>environmental criteria                                                                                                                                  | 116-120                                                                                                                                                                                                                                                                                                        |\n| GRI 308: Supplier<br>environmental<br>assessment 2016                   | 308-2 Negative environmental impacts in the<br>supply chain and actions taken                                                                                                                           | No suppliers with significant negative<br>environmental impacts were identified in<br>the assessments carried out.                                                                                                                                                                                             |\n| Employment                                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 401: Employment<br>2016                                             | 401-1 New employee hires and employee<br>turnover                                                                                                                                                       | Appendix 6.2                                                                                                                                                                                                                                                                                                   |\n|                                                                         | 401-2 Benefits provided to full-time employees<br>that are not provided to temporary or part-time<br>employees                                                                                          | 106-109                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 401-3 Parental leave                                                                                                                                                                                    | 106-109, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Labor/management relations                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 402:<br>Labor/management<br>relations 2016                          | 402-1 Minimum notice periods regarding<br>operational changes                                                                                                                                           | The minimum notice periods are in line<br>with prevailing legislation and the<br>collective agreement for the steel<br>industry.                                                                                                                                                                               |\n| Occupational health and safety                                          |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 403-1 Occupational health and safety<br>management system                                                                                                                                               | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-2 Hazard identification, risk assessment, and<br>incident investigation                                                                                                                             | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-3 Occupational health services                                                                                                                                                                      | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-4 Worker participation, consultation, and<br>communication on occupational health and safety                                                                                                        | 112-115                                                                                                                                                                                                                                                                                                        |\n| GRI 403: Occupational<br>health and safety 2018                         | 403-5 Worker training on occupational health<br>and safety                                                                                                                                              | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-6 Promotion of worker health                                                                                                                                                                        | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-7 Prevention and mitigation of occupational<br>health and safety impacts directly linked by<br>business relationships                                                                               | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-8 Workers covered by an occupational health<br>and safety management system                                                                                                                         | 112-115, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n|                                                                         | 403-9 Work-related injuries                                                                                                                                                                             | 112-115, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n|                                                                         | 403-10 Work-related ill health                                                                                                                                                                          | 112-115, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Training and education                                                  |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 404: Training and<br>education 2016                                 | 404-1 Average hours of training per year per<br>employee                                                                                                                                                | 106-109, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n|                                                                         | 404-2 Programs for upgrading employee skills<br>and transition assistance programs                                                                                                                      | 106-109                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 404-3 Percentage of employees receiving regular<br>performance and career development reviews                                                                                                           | 106-109, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Diversity and equal opportunity                                         |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 405: Diversity and<br>equal opportunity<br>2016                     | 405-1 Diversity of governance bodies and<br>employees                                                                                                                                                   | 5.110-111, Appendix 6.2                                                                                                                                                                                                                                                                                        |\n|                                                                         | 405-2 Ratio of basic salary and remuneration of<br>women to men                                                                                                                                         | 110-111, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Non-discrimination                                                      |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 406: Non-<br>discrimination 2016                                    | 406-1 Incidents of discrimination and corrective<br>actions taken                                                                                                                                       | No incidents of discrimination were<br>registered in 2023.                                                                                                                                                                                                                                                     |\n| Freedom of association and collective bargaining                        |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 407: Freedom of<br>association and<br>collective bargaining<br>2016 | 407-1 Operations and suppliers in which the right<br>to freedom of association and collective<br>bargaining may be at risk                                                                              | No operations or suppliers in which the<br>right to freedom of association and<br>collective bargaining may be at risk have<br>been registered.                                                                                                                                                                |\n| Child labor                                                             |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 408: Child labor<br>2016                                            | 408-1 Operations and suppliers at significant risk<br>for incidents of child labor                                                                                                                      | The Group has not registered any<br>operations or suppliers at risk for<br>incidents of child labor. All Acerinox<br>Group companies support the effective<br>abolition of child labor. Acerinox is a<br>signatory of the United Nations Global<br>Compact.                                                    |\n| Forced or compulsory labor                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 409: Forced or<br>compulsory labor 2016                             | 409-1 Operations and suppliers at significant risk<br>for incidents of forced or compulsory labor                                                                                                       | The Group has not recognized any<br>operations or suppliers at significant risk<br>for incidents of forced or compulsory<br>labor. All Acerinox Group companies<br>support the elimination of all forms of<br>forced and compulsory labor. Acerinox is<br>a signatory of the United Nations Global<br>Compact. |\n| Local communities                                                       |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| Supplier social assessment                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 414: Supplier<br>social assessment<br>2016                          | 414-1 New suppliers that were screened using<br>social criteria<br><br>414-2 Negative social impacts in the supply chain<br>and actions taken                                                           | 116-120<br><br>No suppliers with significant negative<br>social impacts were identified in the<br>assessments carried out.                                                                                                                                                                                     |\n| Customer health and safety                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 416: Customer<br>health and safety 2016                             | 416-1 Assessment of the health and safety<br>impacts of product and service categories<br><br>416-2 Incidents of non-compliance concerning<br>the health and safety impacts of products and<br>services | All factories face quality and<br>environmental controls, assessing all<br>possible health and safety impacts of the<br>products.<br><br>No significant incidents of non-<br>compliance concerning the health and<br>safety impacts of product and service<br>categories have been registered.                 |\n| Customer privacy                                                        |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 418: Customer<br>privacy 2016                                       | 418-1 Substantiated complaints concerning<br>breaches of customer privacy and losses of<br>customer data                                                                                                | No significant grievances related to<br>respect for customer privacy and losses<br>of customer personal data have been<br>recorded in the mechanisms in place.                                                                                                                                                 |\n\n{280}------------------------------------------------\n\nImage /page/280/Picture/1 description: The image contains the word \"ACERINOX\" in bold, white letters inside a blue circle. The circle is slightly offset to the right of the word.\n\n{281}------------------------------------------------\n\nImage /page/281/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right, giving it a crescent shape.\n\n{282}------------------------------------------------\n\nImage /page/282/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle partially surrounding the text. The text is positioned to the left of the circle, with the circle open on the left side.\n\n{283}------------------------------------------------\n\nImage /page/283/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is enclosed within a partial circle, also in dark blue, that curves around the top and right side of the word. The background is white.\n\n{284}------------------------------------------------\n\nImage /page/284/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters slightly spaced apart. The word is enclosed within a circular shape, which appears to be a stylized representation of a globe or a ring. The color of the logo is a deep blue.\n\n## **6.5 SASB table of contents**\n\n#### **Contents and key metrics**\n\n| Topic                            | Contents and key metrics                                                                                                                                                                                                                                            | Category                   | Unit of<br>measurement                        | Code             | Page / Reference                                                                                                                                                                                                            |\n|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|-----------------------------------------------|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Greenhouse<br>gas<br>emissions   | Gross global Scope 1 emissions,<br>methane percentage, percentage<br>covered under emissions-limiting<br>regulations                                                                                                                                                | Quantitative               | Metric tons<br>(t) CO2e,<br>percentage<br>(%) | EM-IS-110a.1     | (1) 86-88, Appendix<br>6.2<br>(2) 0.006%<br>(3) 24.66% of Scope 1<br>emissions are<br>covered under<br>emissions-limiting<br>regulations                                                                                    |\n|                                  | Discussion of long-term and short-<br>term strategy or plan to manage<br>Scope 1 emissions, emissions<br>reduction targets, and an analysis<br>of performance against those<br>targets                                                                              | Discussion<br>and analysis | n/a                                           | EM-IS-110a.2     | 81-88                                                                                                                                                                                                                       |\n| Atmospheric<br>emissions         | Air emissions of the following<br>pollutants: (1) CO, (2) NOx<br>(excluding N2O), (3) SOx, (4)<br>particulate matter (PM10), (5)<br>manganese (MnO), (6) lead (Pb),<br>(7) volatile organic compounds<br>(VOCs), and (8) polycyclic aromatic<br>hydrocarbons (PAHs) | Quantitative               | Metric tons<br>(t)                            | EM-IS-120a.1     | 95                                                                                                                                                                                                                          |\n| Energy<br>management             | (1) Total energy consumed<br>(2) Percentage grid electricity<br>(3) Percentage renewable                                                                                                                                                                            | Quantitative               | Gigajoules<br>(GJ),<br>percentage<br>(%)      | EM-IS-130a.1     | (1 and 3) 89-90,<br>Appendix 6.2 (2)<br>100% grid electricity                                                                                                                                                               |\n|                                  | (1) Total fuel consumed<br>(2) Percentage coal<br>(3) Percentage natural gas<br>(4) Percentage renewable                                                                                                                                                            | Quantitative               | Gigajoules<br>(GJ),<br>percentage<br>(%)      | EM-IS-<br>130a.2 | (1.3 and 4) 89-90,<br>Appendix 6.2<br>The Group does not<br>consume coal                                                                                                                                                    |\n| Water<br>management              | (1) Total fresh water withdrawn<br>(2) Percentage recycled<br>(3) Percentage in regions with high<br>or extremely high baseline water<br>stress                                                                                                                     | Quantitative               | Percentage<br>(%)                             | EM-IS-140a.1     | (1) The entire water<br>withdrawal is fresh<br>water (total dissolved<br>solids ≤ 1,000 mg/l)<br>(2) The group is<br>working to report the<br>percentage of water<br>that is recycled.<br>(3) 39.08% 91-95,<br>Appendix 6.2 |\n| Waste<br>management              | Amount of waste generated, percentage hazardous, percentage recycled                                                                                                                                                                                                | Quantitative               | Metric tons (t), percentage (%)               | EM-IS-150a.1     | 98-100, Appendix 6.2                                                                                                                                                                                                        |\n| Employee<br>health and<br>safety | (1) Total recordable incident rate (TRIR)<br>(2) Fatality rate<br>(3) Near miss frequency rate (NMFR) for (a) full-time employees and (b) contract employees                                                                                                        | Quantitative Ratio         |                                               | EM-IS-320a.1     | 112-116, Appendix 6.2                                                                                                                                                                                                       |\n| Supply chain<br>management       | Discussion of the process for managing iron ore and/or coking coal sourcing risks arising from environmental and social issues                                                                                                                                      | Discussion and analysis    | n/a                                           | EM-IS-430a.1     | Not applicable                                                                                                                                                                                                              |\n\n{285}------------------------------------------------\n\nImage /page/285/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the top, creating a crescent shape that frames the company name. The blue color of the circle is a deep, saturated hue, providing a strong contrast against the white background. The overall design is clean and corporate, conveying a sense of professionalism and reliability.\n\n#### **Activity metrics**\n\n| Activity metrics                                                                                                    | Category     | Unit of<br>measurement                   | Code        | Page / Reference                                                                                                                                                                            |\n|---------------------------------------------------------------------------------------------------------------------|--------------|------------------------------------------|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Raw steel production, percentage from: (1) basic<br>oxygen furnace processes, (2) electric arc furnace<br>processes | Quantitative | Metric tons<br>(t),<br>percentage<br>(%) | EM-IS-000.A | (1) Not applicable<br>(2) 39<br>1,869,417 t. The<br>facilities with electric<br>arc are Acerinox<br>Europa, NAS and<br>Columbus,<br>accounting for<br>96.08% of melting<br>shop production. |\n| Total iron ore production                                                                                           | Quantitative | Metric tons<br>(t)                       | EM-IS-000.B | 0                                                                                                                                                                                           |\n| Total coking coal production                                                                                        | Quantitative | Metric tons<br>(t)                       | EM-IS-000.C | 0                                                                                                                                                                                           |\n\n{289}------------------------------------------------\n\n#### **Sustainable use of resources**\n\nImage /page/289/Picture/2 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned inside a blue circle that is open on the left side. The text is slightly offset to the left within the circle.\n\n{290}------------------------------------------------\n\nImage /page/290/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, with a gap at the bottom right. The word \"ACERINOX\" is also in blue, matching the color of the circle.\n\n#### **Social and employee-related topics**\n\n{291}------------------------------------------------\n\nImage /page/291/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue, crescent-shaped graphic. The crescent appears to encircle the text, adding a sense of enclosure and emphasis to the brand name.\n\n| Occupational health and safety conditions | 403-1 Occupational health<br>and safety management<br>system<br>403-2 Hazard identification,<br>risk assessment, and incident<br>investigation<br>403-3 Occupational health<br>services<br>403-4 Worker participation,<br>consultation, and<br>communication on<br>occupational health and<br>safety<br>403-5 Worker training on<br>occupational health and<br>safety<br>403-6 Promotion of worker<br>health<br>403-7 Prevention and<br>mitigation of occupational<br>health and safety impacts<br>directly linked<br>by business relationships<br>403-8 Workers covered by an<br>occupational health and<br>safety management system | 112-115 |\n|-------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|\n|-------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|\n\n{292}------------------------------------------------\n\nImage /page/292/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is centered within the circle.\n\n| Occupational accidents, in particular with regard to<br>their frequency and severity, and occupational<br>illnesses, disaggregated by gender.                                                                      | 403-9 Work-related injuries<br>403-10 Work-related ill health                                                                  | 112-115, Appendix 6.2 |\n|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|-----------------------|\n| Organization of social dialogue, including procedures<br>for notifying, consulting and negotiating with staff                                                                                                      | 3-3 Management of material<br>topics                                                                                           | 110-116               |\n| Percentage of employees covered by collective<br>bargaining agreements, by country                                                                                                                                 | 2-30 Collective bargaining<br>agreements                                                                                       | Appendix 6.2          |\n| Balance of collective bargaining agreements,<br>particularly in the field of occupational health and<br>safety                                                                                                     | 2-30 Collective bargaining<br>agreements                                                                                       | Appendix 6.2          |\n| Mechanisms and procedures that the company has in<br>place to promote the involvement of workers in its<br>management, in terms of information, consultation<br>and participation                                  | 3-3 Management of material<br>topics                                                                                           | 106-109, 112-115      |\n| Training policies in place                                                                                                                                                                                         | 3-3 Management of material<br>topics. 404-2 Programs for<br>upgrading employee skills and<br>transition assistance<br>programs | 106-111               |\n| Total hours of training by employee category                                                                                                                                                                       | 404-1 Average hours of<br>training per year per<br>employee                                                                    | 106-111, Appendix 6.2 |\n| Universal accessibility for people with disabilities                                                                                                                                                               | 3-3 Management of material<br>topics                                                                                           | 106-111               |\n| Measures taken to promote equal treatment and<br>opportunities for men and women                                                                                                                                   | 3-3 Management of material<br>topics                                                                                           | 110-111               |\n| Equality plans (Chapter III of Organic Law 3/2007 of<br>March 22 for effective gender equality), measuressexual and gender-based harassment, inclusion and<br>universal accessibility for people with disabilities | 3-3 Management of material<br>topics                                                                                           | 110-111               |\n| Policy on non-discrimination and, as the case may<br>be, diversity management                                                                                                                                      | 3-3 Management of material<br>topics                                                                                           | 110-111               |\n\n{293}------------------------------------------------\n\n#### **Respect for human rights**\n\nImage /page/293/Picture/2 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is partially encircled by a thick, dark blue ring that starts from the top right of the \"A\" and curves around the word, ending near the bottom right of the \"X\". The background is white.\n\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          |           |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics<br>408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor<br>409-1 Operations and<br>suppliers at significant risk for<br>incidents of forced or<br>compulsory labor | 72-73, 75 |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated, and<br>allowing for comparisons to be drawn between<br>companies and industries, in line with the benchmark<br>national, European or international frameworks used<br>for each topic                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor<br>409-1 Operations and<br>suppliers at significant risk for<br>incidents of forced or<br>compulsory labor | 72-73, 75 |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 3-3 Management of material<br>topics<br>408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor<br>409-1 Operations and<br>suppliers at significant risk for<br>incidents of forced or<br>compulsory labor | 72-73, 75 |\n| Detailed information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                          |           |\n| Implementation of due diligence procedures in<br>relation to human rights, prevention of risks of abuse<br>of human rights and, as the case may be, measures<br>to mitigate, manage and redress any potential<br>abuses committed                                                                                                                                                                                                                                                                                                                                                                                | 2-26 Mechanisms for seeking<br>advice and raising concerns                                                                                                                                                                               | 72-73, 75 |\n| Reported human rights violations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 3-3 Management of material<br>topics                                                                                                                                                                                                     | 72-73, 75 |\n\n{294}------------------------------------------------\n\nImage /page/294/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word is in a darker shade of blue than the circle.\n\n| Promotion of and compliance with the provisions of<br>the fundamental conventions of the International<br>Labor Organization as regards respect for freedom of<br>association and the right to collective bargaining; the<br>elimination of discrimination in employment and<br>occupation; the elimination of forced or compulsory<br>labor; and the effective abolition of child labor                                                                                                                                                                                                                         | 3-3 Management of material<br>topics. 408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor. 409-1<br>Operations and suppliers at<br>significant risk for incidents of<br>forced or compulsory labor | 72-73, 75, 117                                                                                                                                                                                                                                                                                                                                                                            |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Action to combat corruption and bribery                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics<br>205-2 Communication and<br>training about anti-corruption<br>policies and procedures                                                                                                         | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated and allowing<br>for comparisons to be drawn between companies<br>and industries, in line with the benchmark national,<br>European or international frameworks used for each<br>topic.                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>205-2 Communication and<br>training about anti-corruption<br>policies and procedures                                                                                                         | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 3-3 Management of material<br>topics                                                                                                                                                                                                 | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| Detailed information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Measures taken to prevent corruption and bribery                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 3-3 Management of material<br>topics. 205-1 Operations<br>assessed for risks related to<br>corruption 205-2<br>Communication and training<br>about anti-corruption policies<br>and procedures                                        | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Anti-money laundering measures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3-3 Management of material<br>topics                                                                                                                                                                                                 | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| Contributions to foundations and not-for-profit<br>organizations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 201-1 Direct economic value<br>generated and distributed                                                                                                                                                                             | 76–, 120-123                                                                                                                                                                                                                                                                                                                                                                              |\n| Information about the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics<br>2-23 Policy commitments                                                                                                                                                                      | Several chapters                                                                                                                                                                                                                                                                                                                                                                          |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated and allowing<br>for comparisons to be drawn between companies<br>and industries, in line with the benchmark national,<br>European or international frameworks used for each<br>topic.                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>2-23 Policy commitments                                                                                                                                                                      | Several chapters                                                                                                                                                                                                                                                                                                                                                                          |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 2-3 Risk management<br>3-3 Management of material<br>topics                                                                                                                                                                          | 28-31<br>71-75                                                                                                                                                                                                                                                                                                                                                                            |\n| Company commitments to sustainable development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Impact of the Company's activity on local<br>employment and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 3-3 Management of material<br>topics. 204-1 Proportion of<br>spending on local suppliers                                                                                                                                             | 116-122                                                                                                                                                                                                                                                                                                                                                                                   |\n| Impact of the Company's activity on the local<br>populations and area                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 204-1 Proportion of spending<br>on local suppliers<br>413-1 Operations with local<br>community engagement,<br>impact assessments, and<br>development programs                                                                        | 116-122                                                                                                                                                                                                                                                                                                                                                                                   |\n| Relations with local community stakeholders and the<br>nature of engagement therewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2-29 Approach to stakeholder<br>engagement 413-1 Operations<br>with local community<br>engagement, impact<br>assessments, and<br>development programs                                                                                | 65, 116-122                                                                                                                                                                                                                                                                                                                                                                               |\n| Association and sponsorship actions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2-28 Membership<br>associations 3-3 Management<br>of material topics                                                                                                                                                                 | 116-122                                                                                                                                                                                                                                                                                                                                                                                   |\n| Subcontractors and suppliers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Inclusion in the procurement policy of social, gender-<br>equality and environmental issues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 414-1 New suppliers that<br>were screened using social<br>criteria. 3-3 Management of<br>material topics                                                                                                                             | 116-120                                                                                                                                                                                                                                                                                                                                                                                   |\n| Attention given to social and environmental<br>responsibility in relations with suppliers and<br>subcontractors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2-6 Activities, value chain<br>and other business<br>relationships<br>308-1 New suppliers that<br>were screened using<br>environmental criteria<br>414-1 New suppliers that<br>were screened using social<br>criteria                | 116-120                                                                                                                                                                                                                                                                                                                                                                                   |\n| Oversight and audit systems and results thereof                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2-6 Activities, value chain<br>and other business<br>relationships. 308-2 Negative<br>environmental impacts in the<br>supply chain and actions<br>taken 414-2 Negative social<br>impacts in the supply chain<br>and actions taken    | 116-120                                                                                                                                                                                                                                                                                                                                                                                   |\n| Consumer health and safety measures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 3-3 Management of material<br>topics. 416-1 Assessment of<br>the health and safety impacts<br>of product and service<br>categories                                                                                                   | 102, 112-115                                                                                                                                                                                                                                                                                                                                                                              |\n| Grievance mechanisms, complaints received and<br>resolution thereof                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 3-3 Management of material<br>topics<br>418-1 Substantiated<br>complaints concerning<br>breaches of customer privacy<br>and losses of customer data                                                                                  | Throughout 2023, 4,850<br>claims were received, of<br>which 3,967 were resolved<br>and 883 were still in the<br>process of being finalized at<br>year-end. No claims have<br>been received regarding<br>breaches of customer privacy<br>or loss of data. Additionally,<br>this is the first year in which<br>this indicator is reported, so<br>no comparative information is<br>provided. |\n| Tax-related information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Profits obtained by country                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 207-4 Country-by-country<br>reporting                                                                                                                                                                                                | 76-80                                                                                                                                                                                                                                                                                                                                                                                     |\n| Corporate income tax paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 207-4 Country-by-country<br>reporting                                                                                                                                                                                                | 76-80                                                                                                                                                                                                                                                                                                                                                                                     |\n| Government subsidies received                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 201-4 Financial assistance<br>received from government                                                                                                                                                                               | 76-80                                                                                                                                                                                                                                                                                                                                                                                     |\n\n{295}------------------------------------------------\n\nImage /page/295/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters arranged in a slightly curved manner. The text is positioned inside a blue circle.\n\n{296}------------------------------------------------\n\nImage /page/296/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned to the left of a circular shape, also in dark blue, that partially encloses the word. The circular shape appears to be a stylized representation of a ring or a globe.\n\n{297}------------------------------------------------\n\n**Consumers**\n\nImage /page/297/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word is in a lighter shade of blue than the circle.\n\n{298}------------------------------------------------\n\nImage /page/298/Picture/1 description: The image shows the Acerinox logo. The logo is a blue circle with the word \"ACERINOX\" in bold, black letters inside the circle.\n\n## **6.8 External assurance report**\n\n{299}------------------------------------------------\n\nImage /page/299/Picture/0 description: The image features the word \"ACERINOX\" in bold, white letters against a purple background. A white, crescent-shaped graphic partially encircles the word, adding a design element to the composition. Below the word and crescent, there is a short, horizontal orange line.\n\n**[www.acerinox.com](https://www.acerinox.com/es/index.html)**\n\n**175**\n\n{300}------------------------------------------------\n\nImage /page/300/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several squares and rectangles in shades of red, orange, and yellow, arranged in a stacked, slightly offset manner, creating a sense of depth and layering.\n\nIndependent verification report Consolidated Non-Financial Information Statement 31 December 2023\n\n{301}------------------------------------------------\n\nImage /page/301/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several overlapping squares and rectangles in shades of orange and yellow, creating a layered, abstract design.\n\n*This version of our report is a free translation of the original, which was prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.*\n\n## Independent verification report\n\nTo the shareholders of Acerinox, S.A.:\n\nPursuant to article 49 of the Code of Commerce, we have verified, with the scope of a limited assurance engagement, the Consolidated Non-Financial Information Statement ('NFIS') for the year ended 31 December 2023 of Acerinox, S.A. (Parent company) and subsidiaries (hereinafter Acerinox Group or the Group) which forms part of the accompanying Integrated Annual Report (hereinafter Annual Report), included in the Acerinox Group's consolidated management report.\n\nThe content of the Annual Report includes information additional to that required by current mercantile legislation in relation to non-financial information, which has not been covered by our verification work. In this respect, our work was limited solely to verifying the information identified in 'GRI Table of Contents', 'SASB Table of contents' and the 'NFIS Table of contents' included in the accompanying Annual Report.\n\n#### Responsibility of the administrators and directors of the Parent company\n\nThe preparation of the NFIS included in Acerinox Group's consolidated management report and the content thereof, are the responsibility of the administrators and directors of Acerinox, S.A. The NFIS has been drawn up in accordance with the provisions of current mercantile legislation and in accordance with the criteria of the Sustainability Reporting Standards of the Global Reporting Initiative ('GRI Standards') as well as the Sustainability and Accounting Standards Board (SASB) 'Iron & Steel Producers' industry Standard version 2018-10 selected, described as per the details provided for each matter in the tables 'GRI table of Contents', 'SASB table of contents' and the 'NFIS table of contents' of the Annual Report.\n\nThis responsibility also includes the design, implementation and maintenance of the internal control considered necessary to allow the NFIS to be free of material misstatement due to fraud or error.\n\nThe administrators and directors of Acerinox, S.A. is also responsible for defining, implementing, adapting and maintaining the management systems from which the information required to prepare the NFIS is obtained.\n\n#### Our independence and quality management\n\nWe have complied with the independence requirements and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code of Ethics) which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.\n\n*PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400,* www.pwc.es 1\n\n{302}------------------------------------------------\n\nImage /page/302/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in black, sans-serif font. Above and to the right of the letters is a graphic element composed of overlapping squares in shades of red, orange, and yellow.\n\nOur firm applies International Standard on Quality Management (ISQM) 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.\n\nThe engagement team consisted of professionals specialising in Non-financial Information reviews, specifically in information on economic, social and environmental performance.\n\n#### Our responsibility\n\nOur responsibility is to express our conclusions in a limited assurance independent report based on the work we have performed. We carried out our work in accordance with the requirements laid down in the current International Standard on Assurance Engagements (ISAE) 3000 Revised, Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000 Revised) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) and in the Guidelines for verification engagements of the Statement of Non-Financial Information issued by the Spanish Institute of Auditors ('Instituto de Censores Jurados de Cuentas de España').\n\nIn a limited assurance engagement, the procedures performed vary in nature and timing of execution, and are less extensive, than those carried out in a reasonable assurance engagement and accordingly, the assurance provided is also lower.\n\nOur work consisted of posing questions to management as well as to the various units of Acerinox Group that were involved in the preparation of the NFIS, of the review of the processes for compiling and validating the information presented in the NFIS, and in the application of certain analytical procedures and review procedures on a sample basis, as described below:\n\n- Meetings with the Acerinox, S.A. personnel to understand the business model, policies and management approaches applied, principal risks relating to these matters and to obtain the information required for the external review.\n- Analysis of the scope, relevance and integrity of the content of the NFIS for the year 2023, based on the materiality analysis carried out by Acerinox Group and described in section 'Materiality Analysis', taking into account the content required by current mercantile legislation.\n- Analysis of the procedures used to compile and validate the information presented in the NFIS for the year 2023.\n- Review of information relating to risks, policies and management approaches applied in relation to material matters presented in the NFIS for the year 2023.\n- Verification, by means of sample testing, of the information relating to the content of the NFIS for the year 2023 and that it was adequately compiled using data provided by the sources of the information.\n- Obtaining a management representation letter from the and management of the Parent company.\n\n{303}------------------------------------------------\n\nImage /page/303/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font. Above and to the right of the letters is a graphic element composed of several overlapping squares and rectangles in shades of red, orange, and yellow. The squares and rectangles are arranged in a way that creates a sense of depth and dimension.\n\n#### Conclusion\n\nBased on the procedures performed in our verification and the evidence we have obtained, nothing has come to our attention that causes us to believe that the NFIS of Acerinox, S.A. and its subsidiaries, for the year ended 31 December 2023 has not been prepared, in all material respects, in accordance with the provisions of current mercantile legislation and in accordance with the criteria of GRI as well as the Sustainability and Accounting Standards Board (SASB) 'Iron & Steel Producers' industry Standard version 2018-10 selected, described as per the details provided for each matter in the 'GRI Table of Contents', 'SASB Table of contents' and the 'NFIS Table of contents' of the aforementioned Annual Report.\n\n#### Emphasis of matter\n\nRegulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 relating to the establishment of a framework to facilitate sustainable investments, as well as the Delegated Acts promulgated in accordance with the provisions of the aforementioned Regulation, establish the obligation to disclose information on the manner and extent to which the company's activities are associated with eligible economic activities in relation to the environmental objectives of sustainable use and protection of water and marine resources, transition to a circular economy, prevention and control of pollution and protection and restoration of biodiversity and ecosystems (the rest of the environmental objectives), and with respect to certain new activities included in the objectives of mitigation and adaptation to climate change, for the first time for the 2023 financial year, in addition to the information referring to eligible and aligned activities already required in the 2022 financial year in relation to the objectives of climate change mitigation and climate change adaptation. Consequently, comparative information on eligibility in relation to the rest of the environmental objectives indicated above or on new activities included in the objectives of climate change mitigation and climate change adaptation, has not been included in the accompanying NFIS. Furthermore, to the extent that the information relating to the 2022 financial year was not required with the same level of detail as in the 2023 financial year, the information disclosed in the accompanying NFIS is not strictly comparable either. In addition, it should be noted that Acerinox, S.A.'s administrators and directors have incorporated information on the criteria that, in their opinion, allow for improved compliance with the aforementioned obligations and which have been defined in the sections '4.6 European taxonomy on sustainable finance' and '6.3 Information regarding the European taxonomy' of the accompanying NFIS. Our conclusion has not been modified in relation to this matter.\n\n#### Use and distribution\n\nThis report has been drawn up in response to the requirement established in current Spanish mercantile legislation and therefore may not be suitable for other purposes and jurisdictions.\n\nPricewaterhouseCoopers Auditores, S.L.\n\nOriginal in Spanish signed by Margarita de Rosselló Carril\n\n29 February 2024",
    "full_report": "{0}------------------------------------------------\n\n(The attached External Auditor's Report, Consolidated Annual Accounts and Consolidated Management Report for the fiscal year ended 31 December 2023, have been originally issued in Spanish. The English version is not considered official or regulated financial information. In the event of discrepancy, the Spanish-language version prevails.)\n\n{1}------------------------------------------------\n\nAuditor´s report Consolidated annual accounts at December 31, 2023 Consolidated management report\n\n{2}------------------------------------------------\n\nImage /page/2/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in black, with a stylized graphic element to the right. This element is composed of several overlapping squares and rectangles in shades of orange and yellow, creating a layered, abstract design.\n\n*This version of our report is a free translation of the original, which was prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.*\n\n## Independent auditor's report on the consolidated annual accounts\n\nTo the shareholders of Acerinox, S.A.\n\n### **Report on the consolidated annual accounts**\n\n#### **Opinion**\n\nWe have audited the consolidated annual accounts of Acerinox, S.A. (the Parent company) and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2023, and the profit or loss account, statement of comprehensive income, statement of changes in equity, cash flow statement and related notes, all consolidated, for the year then ended.\n\nIn our opinion, the accompanying consolidated annual accounts present fairly, in all material respects, the equity and financial position of the Group as at 31 December 2023, as well as its financial performance and cash flows, all consolidated, for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) and other provisions of the financial reporting framework applicable in Spain.\n\n#### **Basis for opinion**\n\nWe conducted our audit in accordance with legislation governing the audit practice in Spain. Our responsibilities under those standards are further described in the *Auditor's responsibilities for the audit of the consolidated annual accounts* section of our report.\n\nWe are independent of the Group in accordance with the ethical requirements, including those relating to independence, that are relevant to our audit of the consolidated annual accounts in Spain, in accordance with legislation governing the audit practice. In this regard, we have not rendered services other than those relating to the audit of the accounts, and situations or circumstances have not arisen that, in accordance with the provisions of the aforementioned legislation, have affected our necessary independence such that it has been compromised.\n\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.\n\n#### **Key audit matters**\n\nKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated annual accounts of the current period. These matters were addressed in the context of our audit of the consolidated annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.\n\n*PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400,* www.pwc.es 1\n\n{3}------------------------------------------------\n\nImage /page/3/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in black, with a stylized graphic to the upper right. The graphic is composed of several overlapping squares and rectangles in shades of red, orange, and yellow, creating a layered effect.\n\n#### **Key audit matters How our audit addressed the key audit matters**\n\n#### VDM Metals Group goodwill recovery\n\nAs indicated in notes 2.7, 2.11 and 7.1 of the attached consolidated report, as of December 31, 2023 there is goodwill that fundamentally includes that arising from the acquisition of 100% of the interest in the company VDM Metals Holding, Gmbh for an amount of 49,829 thousand euros.\n\nThe Group Management has estimated the recoverable value of said goodwill (note 2.11 of the attached consolidated report).\n\nTo calculate the recoverable value, the Group's Management has used cash flow projections based on financial budgets that have required relevant judgments and estimates that include, among others, the operating result on sales and long-term discount and growth rates. The most significant assumptions used by Group Management and the sensitivity analyzes carried out are summarized in note 7.1 of the attached consolidated report.\n\nDeviations in these variables and management estimates may determine important variations in the calculations made and, therefore, in the goodwill recovery analyses.\n\nThis fact, together with the relevance of this financial statement line item, drives it to be a key audit matter.\n\n#### Recovery of property, plant and equipment\n\nAs indicated in notes 2.11 and 8.1 of the attached consolidated report, the Group Management evaluates at the end of each year whether there are indications of impairment of the value of property, plant and equipment. If such indication exists, Group Management estimates its recoverable amount. Note 8.1 details the Cash-Generating Units (CGUs) that show signs of impairment.\n\nAs a starting point for our procedures, we have understood the relevant processes and controls linked to the evaluation of impairments in property, plant and equipment by the Group Management, including those linked to the preparation of budgets and the analysis and monitoring of projections, which constitute the basis for the main judgments and estimates made by the Group Management.\n\nOn the first place, we have proceeded to understand the relevant processes and controls linked to the evaluation of the deterioration in goodwill by the Group Management, including those related to the preparation of budgets and the analysis and monitoring of projections, which They constitute the basis for the main judgments and estimates made by the Group's Management.\n\nIn relation to the estimated cash flows, we have analyzed the methodology of the calculations made, we have compared the projected annual flows with those actually achieved in fiscal year 2023, and we have contrasted the key assumptions used by the Group's Management with historical, comparable results. available, relevant industry factors and other external sources. To do this, we have relied on valuation experts from our firm.\n\nAdditionally, we have evaluated the reasonableness of the sensitivity disclosed in the accompanying consolidated annual accounts.\n\nAs a result of the analyzes performed, we consider that the conclusions of the Group Management regarding the estimates made and the information disclosed in the accompanying consolidated annual accounts are adequately supported and consistent with the information currently available.\n\n{4}------------------------------------------------\n\nImage /page/4/Picture/0 description: The image contains the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several overlapping squares and rectangles in shades of red, orange, and yellow, creating a layered, abstract design.\n\nFor calculations of recoverable value through value in use, Group Management uses cash flow projections based on financial budgets that require relevant judgments and estimates. In the cases of Bahru Stainless Sdn. Bhd. and Acerinox Europa, SA, the Group's Management has relied on an independent expert.\n\nThe most significant assumptions and sensitivity analyzes performed are summarized in note 8.1 of the attached consolidated report.\n\nAs a result of the analysis carried out and as mentioned in said note 8.1, in fiscal year 2023 an impairment of 156,207 thousand euros has been recorded on the net assets of the CGU of Bahru Stainless Sdn. Bhd. The accumulated impairment at the end of fiscal year 2023 amounts to 489,435 thousand euros.\n\nDeviations in the variables and estimates indicated above may determine important variations in the conclusions reached and, therefore, in the recovery analysis of property, plant and equipment.\n\nThis fact, together with the relevance of this financial statement line item and the consequent impariment registered, motivates it to be a key audit matter.\n\n**Key audit matters How our audit addressed the key audit matters** In relation to the estimated cash flows, we have analyzed the methodology of the calculations performed, we have compared the projected annual flows with those actually achieved in fiscal year 2023 and we have contrasted the key assumptions considered, with historical results, available comparables, relevant factors of industry and other external sources. For this, we have relied on valuation experts from our firm. In addition, we have analyzed the future plans approved by the Board of Directors.\n\n> Likewise, we have evaluated the competence, capacity, objectivity and conclusions of the independent expert hired by the Group Management, as well as the adequacy of their work as audit evidence.\n\nAdditionally, we have evaluated the reasonableness of the sensitivity analyzes disclosed in the accompanying consolidated annual accounts.\n\nAs a result of the procedures performed, we consider that the conclusions of the Group Management regarding the estimates made and the consequent deterioration recorded, as well as the information revealed in the attached consolidated annual accounts, are adequately supported and consistent with the information currently available.\n\n#### Recognition of deferred tax assets\n\nAs of December 31, 2023, the attached consolidated annual accounts reflect an amount of 169,266 thousand euros of deferred tax assets, net of an amount of 53,823 thousand euros of deferred tax liabilities, the recovery of which depends on the generation of positive tax bases in Corporate Tax in future years (notes 2.19, 3.f and 19.3.3 of the attached consolidated report), in accordance with the applicable tax regulations. Likewise, note 19.3.2 of the attached consolidated report details the unrecognized tax credits.\n\nThe recognition of these deferred tax assets is analyzed by the Group Management by estimating the tax bases for the coming years, based on the business plans of the different Group companies and the planning possibilities allowed by tax legislation. applicable to each company and to the consolidated tax group headed by the Parent Company.\n\nFirst, we have proceeded to understand and evaluate the criteria used by the Group Management to estimate the possibilities of use and recovery of deferred tax assets in the following years, affected by the business plans. Based on the business plans prepared by the Group Management, we have compared the projected annual flows with those actually achieved in fiscal year 2023 and we have contrasted the key assumptions, estimates and calculations made for their preparation, comparing them with the historical performance, comparable available, relevant industry factors and other external sources.\n\nAs part of the analysis, we have also evaluated the tax adjustments considered for the estimation of tax bases, the applicable tax regulations, as well as decisions about the possibilities of using the tax benefits corresponding to the different companies of the Group.\n\n{5}------------------------------------------------\n\nImage /page/5/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in black, with a stylized graphic above and to the right. The graphic is composed of several overlapping squares in shades of red, orange, and yellow, creating a gradient effect.\n\n#### **Key audit matters How our audit addressed the key audit matters**\n\nConsequently, the conclusion on the recognition of deferred tax assets shown in the attached consolidated balance sheet is subject to significant judgments and estimates by the Group Management both with respect to future tax results and the applicable tax regulations. in the different jurisdictions where it operates.\n\nGiven the relevance of the amount recognized and pending recognition, the significant judgments required and estimates necessary for the calculation of future tax bases, the recognition of deferred tax assets is a key matter of our audit.\n\nThe analysis performed have made it possible to verify that the calculations and estimates made by the Group Management, as well as the conclusions reached, in relation to the recognition of deferred tax assets, are consistent with the current situation, with the expectations of future results of the Group and with its tax planning possibilities available in the current legislation.\n\n**Other information: Consolidated management report**\n\nOther information comprises only the consolidated management report for the 2023 financial year, the formulation of which is the responsibility of the Parent company's directors and does not form an integral part of the consolidated annual accounts.\n\nOur audit opinion on the consolidated annual accounts does not cover the consolidated management report. Our responsibility regarding the consolidated management report, in accordance with legislation governing the audit practice, is to:\n\n- a) Verify only that the consolidated statement of non-financial information, certain information included in the Annual Corporate Governance Report and the Annual Report on Directors' Remuneration, as referred to in the Auditing Act, have been provided in the manner required by applicable legislation and, if not, we are obliged to disclose that fact.\n- b) Evaluate and report on the consistency between the rest of the information included in the consolidated management report and the consolidated annual accounts as a result of our knowledge of the Group obtained during the audit of the aforementioned financial statements, as well as to evaluate and report on whether the content and presentation of this part of the consolidated management report is in accordance with applicable regulations. If, based on the work we have performed, we conclude that material misstatements exist, we are required to report that fact.\n\nOn the basis of the work performed, as described above, we have verified that the information mentioned in section a) above has been provided in the manner required by applicable legislation and that the rest of the information contained in the consolidated management report is consistent with that contained in the consolidated annual accounts for the 2023 financial year, and its content and presentation are in accordance with applicable regulations.\n\n**Responsibility of the directors and the audit commission for the consolidated annual accounts**\n\nThe Parent company's directors are responsible for the preparation of the accompanying consolidated annual accounts, such that they fairly present the consolidated equity, financial position and financial performance of the Group, in accordance with IFRS-EU and other provisions of the financial reporting framework applicable to the Group in Spain, and for such internal control as the aforementioned directors determine is necessary to enable the preparation of consolidated annual accounts that are free from material misstatement, whether due to fraud or error.\n\n{6}------------------------------------------------\n\nImage /page/6/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in black, sans-serif font. Above and to the right of the letters is a graphic element composed of several overlapping squares and rectangles in shades of red, orange, and yellow. The squares and rectangles are arranged in a way that creates a sense of depth and movement.\n\nIn preparing the consolidated annual accounts, the Parent company's directors are 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 aforementioned directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.\n\nThe Parent company's audit commission is responsible for overseeing the process of preparation and presentation of the consolidated annual accounts.\n\n#### **Auditor's responsibilities for the audit of the consolidated annual accounts**\n\nOur objectives are to obtain reasonable assurance about whether the consolidated annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.\n\nReasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with legislation governing the audit practice in Spain 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 annual accounts.\n\nAs part of an audit in accordance with legislation governing the audit practice in Spain, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:\n\n- Identify and assess the risks of material misstatement of the consolidated annual accounts, 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.\n- 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.\n- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Parent company's directors.\n- Conclude on the appropriateness of the Parent company's 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 auditor's report to the related disclosures in the consolidated annual accounts 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 auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.\n- Evaluate the overall presentation, structure and content of the consolidated annual accounts, including the disclosures, and whether the consolidated annual accounts represent the underlying transactions and events in a manner that achieves fair presentation.\n- Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated annual accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.\n\n{7}------------------------------------------------\n\nImage /page/7/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several overlapping squares and rectangles in shades of red, orange, and yellow, creating an abstract design.\n\nAcerinox, S.A. and its subsidiaries\n\nWe communicate with the Parent company's audit commission 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.\n\nWe also provide the Parent company's audit commission with a statement that we have complied with relevant ethical requirements, including those relating to independence, and we communicate with the aforementioned those matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.\n\nFrom the matters communicated with the Parent company's audit commission, we determine those matters that were of most significance in the audit of the consolidated annual accounts of the current period and are therefore the key audit matters.\n\nWe describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter.\n\n## **Report on other legal and regulatory requirements**\n\n#### **European single electronic format**\n\nWe have examined the digital files of the European single electronic format (ESEF) of Acerinox, S.A. and its subsidiaries for the 2023 financial year that comprise an XHTML file which includes the consolidated annual accounts for the financial year and XBRL files with tagging performed by the entity, which will form part of the annual financial report.\n\nThe directors of Acerinox, S.A. are responsible for presenting the annual financial report for the 2023 financial year in accordance with the formatting and markup requirements established in the Delegated Regulation (EU) 2019/815 of 17 December 2018 of the European Commission (hereinafter the ESEF Regulation). In this regard, the Annual Corporate Governance Report and the Annual Report on Directors' Remuneration have been incorporated by reference in the consolidated management report.\n\nOur responsibility is to examine the digital files prepared by the Parent company's directors, in accordance with legislation governing the audit practice in Spain. This legislation requires that we plan and execute our audit procedures in order to verify whether the content of the consolidated annual accounts included in the aforementioned digital files completely agrees with that of the consolidated annual accounts that we have audited, and whether the format and markup of these accounts and of the aforementioned files has been effected, in all material respects, in accordance with the requirements established in the ESEF Regulation.\n\nIn our opinion, the digital files examined completely agree with the audited consolidated annual accounts, and these are presented and have been marked up, in all material respects, in accordance with the requirements established in the ESEF Regulation.\n\n#### **Report to the audit commission of the Parent company**\n\nThe opinion expressed in this report is consistent with the content of our additional report to the audit commission of the Parent company dated 28 February 2024.\n\n{8}------------------------------------------------\n\nImage /page/8/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in a bold, sans-serif font, stacked horizontally. To the right of the letters is a graphic element composed of several overlapping squares in shades of orange and red. The squares are arranged in a way that creates a sense of depth and dimension.\n\n#### **Appointment period**\n\nThe General Ordinary Shareholders' Meeting held on 23 May 2023 appointed us as auditors of the Group for a period of one year, for the year ended 31 December 2023.\n\nPreviously, we were appointed by resolution of the General Ordinary Shareholders' Meeting for a period of tres years and we have audited the accounts continuously since the year ended 31 December 2017.\n\n**Services provided**\n\nServices provided to the Group for services other than the audit of the accounts are disclosed in note 21 to the consolidated annual accounts.\n\nPricewaterhouseCoopers Auditores, S.L. (S0242)\n\nOriginal in Spanish signed by\n\nJon Toledano Irigoyen (20518)\n\n29 February 2024\n\n{9}------------------------------------------------\n\n## **ACERINOX, S.A. AND SUBSIDIARIES**\n\nImage /page/9/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned in the center of a circular shape, which is open at the top, resembling a crescent moon. The circular shape is also in the same dark blue color as the text.\n\n## **Annual Accounts of the Consolidated Group**\n\n## **for the year ended 31 December 2023**\n\n *Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Note 2). In the event of a discrepancy, the Spanish-language version prevails.*\n\n{10}------------------------------------------------\n\n### **TABLE OF CONTENTS**\n\n#### **CONSOLIDATED FINANCIAL STATEMENTS**\n\n| CONSOLIDATED STATEMENT OF FINANCIAL POSITION   | 2 |\n|------------------------------------------------|---|\n| CONSOLIDATED STATEMENT OF PROFIT OR LOSS       | 4 |\n| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | 5 |\n| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY    | 6 |\n| CONSOLIDATED STATEMENTS OF CASH FLOWS          | 7 |\n\n#### **NOTES**\n\n| NOTE 1 – GENERAL INFORMATION                      | 8   |  |\n|---------------------------------------------------|-----|--|\n| NOTE 2 – ACCOUNTING POLICIES                      | 9   |  |\n| NOTE 3 – ACCOUNTING ESTIMATES AND JUDGEMENTS      | 29  |  |\n| NOTE 4 – FINANCIAL RISK MANAGEMENT                | 31  |  |\n| NOTE 5 – SCOPE OF CONSOLIDATION                   | 45  |  |\n| NOTE 6 – SEGMENT REPORTING                        | 50  |  |\n| NOTE 7 – INTANGIBLE ASSETS                        | 53  |  |\n| NOTE 8 – PROPERTY, PLANT AND EQUIPMENT            | 57  |  |\n| NOTE 9 – INVESTMENT PROPERTY                      | 68  |  |\n| NOTE 10 – RIGHT-OF-USE ASSETS (LEASES)            | 70  |  |\n| NOTE 11 – INVENTORIES                             | 71  |  |\n| NOTE 12 – FINANCIAL INSTRUMENTS                   | 73  |  |\n| NOTE 13 – CASH AND CASH EQUIVALENTS               | 85  |  |\n| NOTE 14 – EQUITY                                  | 85  |  |\n| NOTE 15 – DEFERRED INCOME                         | 93  |  |\n| NOTE 16 – PROVISIONS AND CONTINGENCIES            | 94  |  |\n| NOTE 17 – INCOME AND EXPENSES                     | 99  |  |\n| NOTE 18 – NET FINANCE COSTS101                    |     |  |\n| NOTE 19 – TAX MATTERS                             | 102 |  |\n| NOTE 20 – RELATED PARTY BALANCES AND TRANSACTIONS | 111 |  |\n| NOTE 21 – AUDIT FEES                              | 112 |  |\n| NOTE 22 – EVENTS AFTER THE REPORTING PERIOD       | 113 |  |\n\n{11}------------------------------------------------\n\nImage /page/11/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right. The word \"ACERINOX\" is also in blue, matching the color of the circle.\n\n## <span id=\"page-11-0\"></span>**CONSOLIDATED ANNUAL ACCOUNTS**\n\n## **CONSOLIDATED FINANCIAL STATEMENTS**\n\n## **1. CONSOLIDATED STATEMENT OF FINANCIAL POSITION**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                                   | Note | 2023      | 2022      |\n|-------------------------------------------------------------------|------|-----------|-----------|\n| ASSETS                                                            |      |           |           |\n| Non-current assets                                                |      |           |           |\n| Goodwill                                                          | 7    | 51,064    | 51,064    |\n| Other intangible assets                                           | 7    | 41,339    | 43,437    |\n| Property, plant and equipment                                     | 8    | 1,471,899 | 1,649,607 |\n| Investment property                                               | 9    | 9,668     | 9,916     |\n| Rights of use assets                                              | 10   | 18,851    | 16,207    |\n| Investments accounted for using the equity method                 | 5.3  | 390       | 390       |\n| Financial assets at fair value through other comprehensive income | 12   | 381       | 394       |\n| Deferred tax assets                                               | 19   | 169,266   | 101,225   |\n| Other non-current financial assets                                | 12   | 14,231    | 30,188    |\n| TOTAL NON-CURRENT ASSETS                                          |      | 1,777,089 | 1,902,428 |\n| Current assets                                                    |      |           |           |\n| Inventories                                                       | 11   | 1,860,535 | 2,155,542 |\n| Trade and other receivables                                       | 12   | 626,273   | 637,833   |\n| Other current financial assets                                    | 12   | 27,683    | 51,534    |\n| Current income tax assets                                         | 19   | 13,506    | 22,770    |\n| Cash and cash equivalents                                         | 13   | 1,793,683 | 1,548,040 |\n| TOTAL CURRENT ASSETS                                              |      | 4,321,680 | 4,415,719 |\n| TOTAL ASSETS                                                      |      | 6,098,769 | 6,318,147 |\n\n{12}------------------------------------------------\n\n#### **Acerinox Group Annual Accounts**\n\nImage /page/12/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a semi-circle. The text and the semi-circle are both in a dark blue color. The semi-circle partially encloses the text, creating a circular shape.\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n| Note                                                             | 2023 | 2022      |           |\n|------------------------------------------------------------------|------|-----------|-----------|\n| <b>LIABILITIES</b>                                               |      |           |           |\n| <b>Equity</b>                                                    |      |           |           |\n| Subscribed capital                                               | 14   | 62,334    | 64,931    |\n| Issue premium                                                    | 14   | 268       | 268       |\n| Reserves                                                         | 14   | 2,199,849 | 1,920,753 |\n| Profit/(loss) for the year                                       | 14   | 228,128   | 556,054   |\n| Interim dividend                                                 | 14   | -77,261   | -74,799   |\n| Translation differences                                          | 14   | -7,990    | 93,923    |\n| Other equity instruments                                         | 14   | 4,157     | 3,695     |\n| Shares of the parent                                             | 14   | -1,055    | -90,728   |\n| <b>EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY</b> |      | 2,408,430 | 2,474,097 |\n| Non-controlling interests                                        | 14   | 54,696    | 73,596    |\n| <b>TOTAL EQUITY</b>                                              | 14   | 2,463,126 | 2,547,693 |\n| <b>Non-current liabilities</b>                                   |      |           |           |\n| Deferred income                                                  | 15   | 36,347    | 27,465    |\n| Issuance of debentures and other marketable securities           | 12   | -         | 74,850    |\n| Bank borrowings                                                  | 12   | 1,291,156 | 1,319,182 |\n| Long-term provisions                                             | 16   | 179,994   | 159,058   |\n| Deferred tax liabilities                                         | 19   | 205,901   | 227,784   |\n| Other non-current financial liabilities                          | 12   | 19,799    | 14,971    |\n| <b>TOTAL NON-CURRENT LIABILITIES</b>                             |      | 1,733,197 | 1,823,310 |\n| <b>Current liabilities</b>                                       |      |           |           |\n| Issuance of debentures and other marketable securities           | 12   | 76,584    | 1,634     |\n| Bank borrowings                                                  | 12   | 767,147   | 592,858   |\n| Trade and other payables                                         | 12   | 951,118   | 1,181,440 |\n| Current income tax liabilities                                   | 19   | 12,601    | 58,295    |\n| Other current financial liabilities                              | 12   | 94,996    | 112,917   |\n| <b>TOTAL CURRENT LIABILITIES</b>                                 | 12   | 1,902,446 | 1,947,144 |\n| <b>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</b>                | 12   | 6,098,769 | 6,318,147 |\n\n{13}------------------------------------------------\n\nImage /page/13/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue, circular shape. The blue circle is not fully closed, leaving a gap at the bottom right. The word \"ACERINOX\" is in black.\n\n## <span id=\"page-13-0\"></span>**2. CONSOLIDATED STATEMENT OF PROFIT OR LOSS**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                               | Note     | 2023       | 2022       |\n|---------------------------------------------------------------|----------|------------|------------|\n| Revenue                                                       | 17       | 6,607,978  | 8,688,494  |\n| Other operating income                                        | 17       | 92,198     | 41,025     |\n| Work performed by the Group on non-current assets             | 17       | 7,825      | 27,375     |\n| Changes in inventories of finished goods and work in progress |          | -152,080   | 211,472    |\n| Supplies                                                      |          | -4,282,109 | -5,844,532 |\n| Staff costs                                                   | 17       | -636,546   | -653,762   |\n| Depreciation and amortisation charge                          | 7,8,9,10 | -171,130   | -192,931   |\n| Other operating expenses                                      | 17       | -935,776   | -1,197,459 |\n| Impairment of assets                                          | 7.8      | -156,207   | -203,905   |\n| OPERATING INCOME                                              |          | 374,153    | 875,769    |\n| Finance income                                                | 18       | 79,646     | 26,073     |\n| Finance costs                                                 | 18       | -101,044   | -62,799    |\n| Exchange differences                                          | 18       | 2,273      | -4,624     |\n| Revaluation of financial instruments at fair value            | 18       | 317        | -3,14      |\n| Impairment and loss on disposal of financial instruments      | 18       |            |            |\n| PROFIT FROM ORDINARY ACTIVITIES                               |          | 355,345    | 831,275    |\n| Income tax                                                    | 19       | -138,105   | -260,412   |\n| Other taxes                                                   | 19       | -273       | -473       |\n| PROFIT/(LOSS) FOR THE YEAR                                    |          | 216,967    | 570,386    |\n| Attributable to:                                              |          |            |            |\n| NON-CONTROLLING INTERESTS                                     |          | -11,161    | 14,332     |\n| NET PROFIT (LOSS) ATTRIBUTABLE TO THE GROUP                   |          | 228,128    | 556,05-    |\n| Basic and diluted earnings per share (in euros)               | 14.9     | 0.92       | 2.16       |\n\n{14}------------------------------------------------\n\nImage /page/14/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue, circular shape that is open on the left side. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle appears to be a thick line forming a partial ring around the word.\n\n### **3. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                                                                  | Note   | 2023     | 2022    |\n|--------------------------------------------------------------------------------------------------|--------|----------|---------|\n| A) RESULTS OF THE STATEMENT OF PROFIT OR LOSS                                                    |        | 216,967  | 570,386 |\n| B) OTHER COMPREHENSIVE INCOME - ITEMS NOT RECLASSIFIED TO PROFIT OR LOSS FOR THE PERIOD          |        | -5,980   | 30,008  |\n| 1. Arising from valuation of equity instruments at fair value through other comprehensive income | 12.2.5 | -        | 502     |\n| 2. Arising from actuarial gains and losses and other adjustments                                 | 16.1   | -8,906   | 43,999  |\n| 3. Tax effect                                                                                    | 19     | 2,926    | -14,493 |\n| C) OTHER COMPREHENSIVE INCOME - ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS FOR THE PERIOD  |        | -140,570 | 142,522 |\n| 1. Arising from cash flow hedges                                                                 |        |          |         |\n| - Valuation gains / (losses)                                                                     | 12.2.6 | -11,650  | 55,500  |\n| - Amounts transferred to the statement of profit or loss                                         | 12.2.6 | -32,402  | -1,776  |\n| 2. Translation differences                                                                       |        |          |         |\n| - Valuation gains / (losses)                                                                     |        | -109,680 | 103,481 |\n| - Amounts transferred to the statement of profit or loss                                         |        |          |         |\n| 3. Tax effect                                                                                    | 19     | 13,162   | -14,683 |\n| TOTAL COMPREHENSIVE INCOME FOR THE YEAR                                                          |        | 70,417   | 742,916 |\n| a) Attributed to the parent company                                                              |        | 89,345   | 729,173 |\n| b) Attributed to non-controlling interests                                                       |        | -18,928  | 13,743  |\n\n{15}------------------------------------------------\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n<span id=\"page-15-0\"></span>\n\n|                                                                                     |        | Equity attributable to shareholders of the parent company |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             |                    |                     |           |                              |                 |\n|-------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|------------------|------------------------------------------------------------------------|---------------------------------------------------------|--------------------------------|-----------------------------------------------------|-----------------------------------------|----------------------------|-----------------------------|--------------------|---------------------|-----------|------------------------------|-----------------|\n|                                                                                     |        | Subscribed<br>capital                                     | Issue<br>premium | Retained earnings<br>reserves (includes<br>profit/(loss) for the year) | Reserves for<br>revaluation of<br>non-current<br>assets | Cash flow<br>hedge<br>reserves | Fair value<br>adjustments<br>to financial<br>assets | Reserve for<br>actuarial<br>adjustments | Translation<br>differences | Other equity<br>instruments | Treasury<br>shares | Interim<br>dividend | TOTAL     | Non-controlling<br>interests | TOTAL<br>EQUITY |\n| Equity 31/12/2021                                                                   |        | 67,637                                                    | 268              | 2,094,072                                                              | 5,242                                                   | -272                           | -370                                                | 5,820                                   | -10,154                    | 3,048                       | -10,251            | 0                   | 2,155,040 | 59,822                       | 2,214,862       |\n| Profit/(loss) for the year 2022                                                     | Note   |                                                           |                  | 556,054                                                                |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | 556,054   | 14,332                       | 570,386         |\n| Financial assets at fair value through other comprehensive income (net of tax)      | 12.2.5 |                                                           |                  |                                                                        |                                                         |                                | 370                                                 |                                         |                            |                             |                    |                     | 370       |                              | 370             |\n| Cash flow hedges (net of tax)                                                       | 12.2.6 |                                                           |                  |                                                                        |                                                         | 39,041                         |                                                     |                                         |                            |                             |                    |                     | 39,041    |                              | 39,041          |\n| Actuarial valuation of employee benefit obligations (net of tax)                    | 16.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     | 29,631                                  |                            |                             |                    |                     | 29,631    | 7                            | 29,638          |\n| Translation differences                                                             | 14.4   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         | 104,077                    |                             |                    |                     | 104,077   | -596                         | 103,481         |\n| Income and expenses recognised in equity                                            |        |                                                           |                  |                                                                        |                                                         | 39,041                         | 370                                                 | 29,631                                  | 104,077                    |                             |                    |                     | 173,119   | -589                         | 172,530         |\n| Total comprehensive income                                                          |        |                                                           |                  | 556,054                                                                | 0                                                       | 39,041                         | 370                                                 | 29,631                                  | 104,077                    | 0                           | 0                  | 0                   | 729,173   | 13,743                       | 742,916         |\n| Interim dividend                                                                    | 14.2   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             |                    | -74,799             | -74,799   |                              | -74,799         |\n| Dividends paid                                                                      | 14.2   |                                                           |                  | -129,850                                                               |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | -129,850  |                              | -129,850        |\n| Transactions with shareholders                                                      |        | 0                                                         | 0                | -129,850                                                               | 0                                                       | 0                              | 0                                                   | 0                                       | 0                          | 0                           | 0                  | -74,799             | -204,649  | 0                            | -204,649        |\n| Acquisition of treasury shares                                                      | 14.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             | -206,005           |                     | -206,005  |                              | -206,005        |\n| Amortisation of treasury shares                                                     | 14.1   | -2,706                                                    |                  | -121,588                                                               |                                                         |                                |                                                     |                                         |                            |                             | 124,294            |                     | 0         |                              | 0               |\n| Long-term incentive plan for senior executives                                      | 16.1.3 |                                                           |                  | -810                                                                   |                                                         |                                |                                                     |                                         |                            | 647                         | 1,234              |                     | 1,071     | 31                           | 1,102           |\n| Hyperinflation adjustments                                                          | 14.6   |                                                           |                  | 973                                                                    |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | 973       |                              | 973             |\n| Result of sale of financial assets at fair value through other comprehensive income | 12.2.5 |                                                           |                  | -803                                                                   |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | -803      |                              | -803            |\n| Other changes                                                                       | 14.4   |                                                           |                  | -703                                                                   |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | -703      |                              | -703            |\n| Equity 31/12/2022                                                                   |        | 64,931                                                    | 268              | 2,397,345                                                              | 5,242                                                   | 38,769                         | 0                                                   | 35,451                                  | 93,923                     | 3,695                       | -90,728            | -74,799             | 2,474,097 | 73,596                       | 2,547,693       |\n| Profit/(loss) for the year 2023                                                     |        | 0                                                         | 0                | 228,128                                                                | 0                                                       | 0                              | 0                                                   | 0                                       | 0                          | 0                           | 0                  | 0                   | 228,128   | -11,161                      | 216,967         |\n| Cash flow hedges (net of tax)                                                       | 12.2.6 |                                                           |                  |                                                                        |                                                         | -30,890                        |                                                     |                                         |                            |                             |                    |                     | -30,890   |                              | -30,890         |\n| Actuarial valuation of employee benefit obligations (net of tax)                    | 16.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     | -5,980                                  |                            |                             |                    |                     | -5,980    |                              | -5,980          |\n| Translation differences                                                             | 14.4   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         | -101,913                   |                             |                    |                     | -101,913  | -7,767                       | -109,680        |\n| Income and expenses recognised in equity                                            |        |                                                           |                  |                                                                        |                                                         | -30,890                        |                                                     | -5,980                                  | -101,913                   |                             |                    |                     | -138,783  | -7,767                       | -146,550        |\n| Total comprehensive income                                                          |        | 0                                                         | 0                | 228,128                                                                | 0                                                       | -30,890                        | 0                                                   | -5,980                                  | -101,913                   | 0                           | 0                  | 0                   | 89,345    | -18,928                      | 70,417          |\n| Interim dividend                                                                    |        |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             |                    | -77,261             | -77,261   |                              | -77,261         |\n| Dividends paid                                                                      | 14.2   |                                                           |                  | -149,562                                                               |                                                         |                                |                                                     |                                         |                            |                             |                    | 74,799              | -74,763   |                              | -74,763         |\n| Transactions with shareholders                                                      |        | 0                                                         | 0                | -149,562                                                               | 0                                                       | 0                              | 0                                                   | 0                                       | 0                          | 0                           | 0                  | -2,462              | -152,024  | 0                            | -152,024        |\n| Acquisition of treasury shares                                                      | 14.1   |                                                           |                  |                                                                        |                                                         |                                |                                                     |                                         |                            |                             | -2,084             |                     | -2,084    |                              | -2,084          |\n| Amortisation of treasury shares                                                     | 14.1   | -2,597                                                    |                  | -88,088                                                                |                                                         |                                |                                                     |                                         |                            |                             | 90,685             |                     | 0         |                              | 0               |\n| Long-term incentive plan for senior executives                                      | 16.1.3 |                                                           |                  | -769                                                                   |                                                         |                                |                                                     |                                         |                            | 462                         | 1,072              |                     | 765       | 28                           | 793             |\n| Hyperinflation adjustments                                                          | 14.6   |                                                           |                  | 1,028                                                                  |                                                         |                                |                                                     |                                         |                            |                             |                    |                     | 1,028     |                              | 1,028           |\n| Other changes                                                                       | 14.4   |                                                           |                  | -2,693                                                                 |                                                         | 2                              |                                                     | -6                                      |                            |                             |                    |                     | -2,697    |                              | -2,697          |\n| Equity 31/12/2023                                                                   |        | 62,334                                                    | 268              | 2,385,389                                                              | 5,242                                                   | 7,881                          | 0                                                   | 29,465                                  | -7,990                     | 4,157                       | -1,055             | -77,261             | 2,408,430 | 54,696                       | 2,463,126       |\n\n{16}------------------------------------------------\n\nImage /page/16/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue crescent shape. The crescent shape partially encircles the word, creating a circular effect.\n\n### <span id=\"page-16-0\"></span>**5. CONSOLIDATED STATEMENTS OF CASH FLOWS**\n\n(Amounts in thousands of euros at 31 December 2023 and 2022)\n\n|                                                         | Note     | 2023      | 2022      |\n|---------------------------------------------------------|----------|-----------|-----------|\n| CASH FLOWS FROM OPERATING ACTIVITIES                    |          |           |           |\n| Profit (loss) before tax                                |          | 355,345   | 831,275   |\n| Adjustments to the result:                              |          |           |           |\n| Depreciation of fixed assets                            | 7,8,9,10 | 171,130   | 192,935   |\n| Impairment losses                                       | 8.11     | 122,812   | 290,561   |\n| Changes in provisions                                   |          | 7,033     | 19,130    |\n| Allocation of subsidies                                 | 15       | -9,186    | -7,522    |\n| Gain or loss on disposal of fixed assets                | 8.9      | 1,895     | 156       |\n| Gain (loss) on disposal of financial instruments        |          | -         | 3         |\n| Changes in fair value of financial instruments          |          | -4,313    | 3,238     |\n| Finance income                                          | 18       | -79,646   | -26,074   |\n| Finance costs                                           | 18       | 97,786    | 62,799    |\n| Other income and expenses                               |          | -25,154   | -14,715   |\n| Variations in working capital:                          |          |           |           |\n| (Increase)/decrease in trade and other receivables      |          | 20,818    | 194,322   |\n| (Increase) / decrease in inventories                    |          | 294,780   | -432,423  |\n| Increase / (decrease) in trade and other payables       |          | -235,071  | -306,199  |\n| Other cash flows from operating activities              |          |           |           |\n| Interest payments                                       |          | -82,468   | -50,050   |\n| Interest income                                         |          | 78,966    | 24,890    |\n| Income tax paid                                         |          | -233,251  | -238,237  |\n| NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES          |          | 481,476   | 544,083   |\n| CASH FLOWS FROM INVESTING ACTIVITIES                    |          |           |           |\n| Acquisition of property, plant and equipment            |          | -171,921  | -134,044  |\n| Acquisition of intangible fixed assets                  |          | -2,982    | -2,673    |\n| Acquisition of other financial assets                   |          | -848      | -1,811    |\n| Proceeds from disposal of property, plant and equipment |          | 1,045     | 2,004     |\n| Proceeds from disposal of other financial assets        |          | 5         | 10,158    |\n| Dividends received                                      |          | 5         | 866       |\n| NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES         |          | -174,696  | -125,500  |\n| Acquisition of treasury shares                          | 14       | -2,084    | -206,004  |\n| Collection of third-party resources                     | 12.2.3   | 392,687   | 1,028,740 |\n| Repayment of interest-bearing liabilities               | 12.2.3   | -246,607  | -908,921  |\n| Dividends paid                                          | 14       | -149,562  | -129,850  |\n| NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES         |          | -5,566    | -216,035  |\n| NET INCREASE IN CASH AND CASH EQUIVALENTS               |          | 301,214   | 202,548   |\n| Cash and cash equivalents at beginning of year          | 13       | 1,548,040 | 1,274,929 |\n| Effect of changes in exchange rates                     |          | -55,571   | 70,563    |\n| CASH AND CASH EQUIVALENTS AT YEAR-END                   | 13       | 1,703,683 | 1,548,040 |\n\n{17}------------------------------------------------\n\nImage /page/17/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside of a circular shape, also in dark blue, that surrounds the text.\n\n### <span id=\"page-17-0\"></span>**NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS**\n\n#### **NOTE 1 – GENERAL INFORMATION**\n\nName of the Parent: Acerinox, S.A. (hereinafter, \"the Company\").\n\nIncorporation: the Company was incorporated as a public limited liability company for an indefinite period of time on 30 September 1970.\n\nRegistered office: calle Santiago de Compostela, nº 100, Madrid - Spain.\n\nCompany object and main business activities: the Group's main business activities, which coincide with the Company object, consist of the manufacture, processing and marketing of stainless-steel products and special alloys. These activities are performed through its subsidiaries.\n\nThe Acerinox Group has the most extensive global presence in the production and distribution of stainless steel and highperformance alloys and is one of the most competitive companies in its sector. Acerinox is the leader in its sector in the United States and on the African continent, is widely recognised in Europe, and holds the top position globally for sales in high-performance alloys.\n\nThe Group has six stainless-steel plants on four continents, located in Campo de Gibraltar (Spain), Ponferrada and Igualada (Spain), Ghent (Kentucky, USA), Middleburg (Mpumalanga, South Africa) and Johor Middleburg (Mpumalanga, South Africa) and Johor Bahru (Malaysia). In addition, it has five high-performance alloy plants in Germany (Unna, Duisburg, Siegen, Werdohl and Altena) and two more in the USA (New Jersey and Nevada). The Group also has an extensive distribution network that enables it to sell in more than 80 countries. The Group boasts a steel production capacity of 3.5 million tonnes.\n\n**Note 5** details all the companies included in the scope of consolidation of Acerinox and the business activities they each perform.\n\nThe parent's main business activity is that of a holding company, in its condition as the parent of the Acerinox Group. Acerinox, S.A. approves and supervises the strategic business areas. It also provides various corporate services (including legal, accounting and consulting) and is responsible for the management and administration of financing within the Group.\n\nFiscal year: the fiscal year of Acerinox, S.A. and of all its Group companies covers 12 months. It begins on 1 January and ends on 31 December.\n\nAuthorisation for issue of the financial statements: these consolidated annual accounts were authorised for issue by the Board of Directors of Acerinox, S.A., on 28 February 2024.\n\n{18}------------------------------------------------\n\nImage /page/18/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is positioned inside a blue circle that is open on the left side.\n\n#### <span id=\"page-18-0\"></span>**NOTE 2 – ACCOUNTING POLICIES**\n\n#### **2.1 Statement of compliance**\n\nThese consolidated annual accounts of the Group were prepared in accordance with the International Financial Reporting Standards (IFRSs) and related interpretations (IFRICs) adopted by the European Union (EU-IFRSs hereinafter) and with the other provisions of the applicable regulatory financial reporting framework.\n\nThe 2023 annual accounts were prepared using the same accounting principles (EU-IFRS) as for 2022. The standards and amendments adopted by the European Union and required to be applied from 2023 had no impact on the Group, as described below:\n\n- IAS 1 (Amendment) Disclosure of accounting policies: the amendment introduces changes to the accounting policy disclosures to provide more useful information to investors and other key users of the financial statements. The Group has analysed the disclosures in the notes to its accounting policies to determine whether they contain appropriate disclosures in accordance with the amendments to IAS 1 and has not considered it necessary to make any changes.\n- IAS 8 (Amendment) Definition of accounting estimates: This amendment clarifies the differences between a change in accounting estimate and a change in accounting policy. This amendment had no impact on the reporting period as there were no changes in estimates or policies.\n- IAS 12 (Amendment) Deferred tax related to assets and liabilities arising from a single transaction: This amendment clarifies that the exemption from recognising deferred tax relating to assets or liabilities that are recognised for the first time (\"initial recognition exemption\") does not apply to transactions for which both an asset and a liability are recognised on initial recognition, such as leases and decommissioning obligations, and that there is therefore an obligation to recognise deferred tax on such transactions. No impact on the Group as there were no new transactions in 2023.\n- IAS 12 (Amendment) International tax reform: \"Pillar 2\" model standard: In October 2021, more than 130 countries agreed to implement a minimum tax regime for multinational companies, known as \"Pillar 2\". In December 2021, the Organisation for Economic Co-operation and Development (\"OECD\") published the \"Pillar 2\" model standard for reforming international corporate taxation. The standard requires affected large multinational companies to calculate their effective GloBE (\"Global Anti-Base Erosion\") tax rate for each jurisdiction in which they operate. Such companies will be required to pay an additional tax on the difference between their effective GloBE tax rate per jurisdiction and the minimum rate of 15%. This standard has yet to be implemented in Spain.\n\nAs a result of these new tax regulations, the IASB issued limited amendments to IAS 12 in May 2023, which provide a temporary exemption from the requirement to recognise and disclose deferred taxes arising from an enacted or substantially enacted tax law related to the Pillar 2 model standards issued by the OECD. However, the following specific disclosure requirements are introduced for the affected companies:\n\n- The fact that the temporary exemption for the recognition and disclosure of deferred tax assets and liabilities related to Pillar 2 income tax has been applied;\n- Their current tax expense (if any) related to Pillar 2 income tax; and\n- During the period between the enactment or substantial enactment date of the legislation and the effective date of the legislation, entities are required to disclose known or reasonably estimable information that would assist users of the financial statements in understanding the entity's exposure to Pillar 2 income taxes.\n\nThis amendment to IAS 12 is effective immediately (subject to any local approval process) for annual periods beginning on or after 1 January 2023 and retrospectively in accordance with IAS 8 \"Accounting Policies, Changes in Accounting Estimates and Errors\", including the requirement to disclose the fact that the temporary exemption has been applied, if relevant.\n\nThe Group has adopted the temporary exemption for the recognition and disclosure of deferred tax assets and liabilities and includes the disclosures required by this amendment both in its policies and in the tax note (see **Note 19**).\n\n{19}------------------------------------------------\n\nImage /page/19/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue crescent shape. The crescent shape partially encircles the word \"ACERINOX\".\n\n#### **2.2 Assessment of the main standards, amendments and interpretations that will be mandatorily applicable the coming years**\n\nThere are new standards and interpretations which will be mandatorily applicable in the coming years and have not been applied early by the Group.\n\nThe standards, interpretations and amendments approved by the European Union and applicable as of 1 January 2024 which have not been adopted in advance by the Group and which could have an impact, are as follows:\n\n- IFRS 16 (Amendment) \"Lease liability on sale and leaseback\": this amendment explains how a company should account for a sale and leaseback after the date of the transaction. The effective date of application of this amendment is 1 January 2024, although its early adoption is allowed. The Group does not expect the application of these amendments to have any impact on its financial statements.\n- IAS 1 (Amendment) \"Classification of Liabilities as Current or Non-current\": this amendment clarifies that liabilities are classified as current or non-current on the basis of the rights that exist at the end of the reporting period and not on the basis of the entity's expectations or events after the reporting period. It also clarifies the concept of \"settlement\" a liability under the standard. Additionally, the amendment aims to improve the information provided when the right to defer payment of a liability is subject to compliance with conditions (\"covenants\") within twelve months of the reporting period. While the initial effective date of these amendments was 1 January 2022, this has been postponed to January 2024, although early adoption is permitted. The Group does not expect any impact from the application of this standard as the classification within the Group between current and noncurrent is based on existing contractual rights.\n\nThe standards, interpretations and amendments that have not been adopted by the European Union and which have not been adopted in advance by the Group, but which could have an impact, are detailed below:\n\n- Amendments to IFRS 10 and IAS 28: these amendments clarify the accounting treatment of sales and contributions of assets between an investor and its associates and joint ventures. The amendments only apply when an investor sells or contributes assets to its associate or joint venture. The Group does not expect the application of this standard to have any impact as the investments in associates are insignificant and no such contributions have been made to date.\n- IAS 7 (Amendment) and IFRS 7 (Amendment) \"Supplier finance arrangements (reverse factoring)\": these amendments aim to improve disclosures on supplier financing arrangements (reverse factoring) and their effects on a company's liabilities, cash flows and exposure to liquidity risk. This amendment is effective for financial years beginning on or after 1 January 2024. Early implementation of the amendment is allowed, but is pending approval by the European Union. The Group shall include the required and applicable disclosures in its annual accounts when required to do so.\n- IAS 21 (Amendment) \"Lack of exchangeability\": requirements are added to assist entities in determining whether a currency is exchangeable for another currency and the spot rate to use when it is not. This can happen, for example, when a government imposes controls on capital imports and exports, or when it provides an official exchange rate, but limits the volume of transactions that can be carried out at that rate. In cases where a currency is not exchangeable, it is necessary to estimate the spot exchange rate on a valuation date in order to determine the rate at which a transaction would take place on that date between market participants under the prevailing economic conditions.\n\nWhen an entity applies the new requirements of this standard for the first time, it is not allowed to restate the comparative information. However, the affected amounts are required to be translated at estimated spot exchange rates at the date of initial application of the change, with an adjustment against reserves.\n\nThis amendment is effective for financial years beginning on or after 1 January 2025. Early implementation is allowed, but is pending approval by the European Union.\n\nThe Group does not foresee any impact from the application of this standard as it does not carry out transactions in these currencies.\n\n{20}------------------------------------------------\n\nImage /page/20/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circular shape. The wordmark is in a darker shade of blue, contrasting with the lighter blue of the surrounding circle. The circle is not fully closed, with a gap at the bottom, giving it a dynamic, curved appearance.\n\n#### **2.3 Basis of presentation of the consolidated annual accounts**\n\nThese Consolidated Annual Accounts of the Group were formally prepared by the parent's directors to present fairly the Group's consolidated equity and consolidated financial position as at 31 December 2023 and 2022, and the consolidated results of its operations, the changes in consolidated equity and the consolidated cash flows of the Group for the years then ended.\n\nThe figures for 2023 are presented for comparison purposes with last financial year's figures for each item in the Annual Accounts.\n\nThese consolidated annual accounts were prepared in euros, rounding the figures off to the nearest thousand, and were prepared on a historical cost basis, except for the following assets and liabilities which were measured at fair value: derivative financial instruments and the defined benefit plans. Inventories were measured at the lower of cost and net realisable value. For the Group's company in Argentina (Acerinox Argentina, S.A.), the rules relating to hyperinflationary economies are applied, as established in **Note 14.6**.\n\nThese consolidated annual accounts were prepared on the basis of the separate accounting records of the parent and of each of the subsidiaries that make up the Acerinox Group. The consolidated annual accounts include certain adjustments and reclassifications made to unify the accounting and presentation policies applied by the Group companies with those applied by the Company. The consolidation principles applied are detailed in **Note 2.5**.\n\nFor the fiscal year beginning on 1 January 2023 and ending on 31 December 2023 the three German companies of the High Performance Alloys Division (VDM Metals Holding GmbH, VDM Metals GmbH and VDM Metals International GmbH) have availed themselves of the exemption permitted under section 291.1 HGB (Handelsgesetzbuch, German Commercial Law) and section 264.3 of the same Law. These exemptions free them from the obligation to present consolidated financial statements of the VDM subgroup, as they are part of a Group that consolidates and publishes its financial statements, and also allow them certain simplifications in the authorisation for issue of separate financial statements.\n\nPreparation of the consolidated annual accounts in accordance with EU-IFRS standards requires the parent company's directors to make certain judgements, estimates and assumptions that affect the application of the accounting policies and, therefore, the figures presented in the consolidated statement of financial position and consolidated statement of profit or loss. The estimates made are based on historical experience and other factors that are considered reasonable. The Group could revise such estimates if changes were to occur in certain events or circumstances. The areas requiring the greatest degree of judgement in applying EU-IFRSs and those involving estimates that are significant for the consolidated financial statements are disclosed in **Note 3**. Also, **Note 4** provides qualitative and quantitative information on the risks assumed that could affect future years.\n\nThe Consolidated Annual Accounts for 2022 were approved by the shareholders at the Annual General Meeting held on 23 May 2023. The Group's Consolidated Annual Accounts for 2023 have not yet been approved by the shareholders at the Annual General Meeting. The Company's Board of Directors considers that these consolidated annual accounts will be approved by the shareholders at the Annual General Meeting without any changes.\n\n#### **2.4 Going concern and accrual bases of accounting**\n\nThe consolidated annual accounts were prepared in accordance with the going concern basis of accounting. Revenue and expenses are recognised on an accrual basis and not on the basis of their dates of collection or payment.\n\n#### **2.5 Basis of consolidation**\n\n#### **a) Subsidiaries**\n\nSubsidiaries are companies over which the Company directly or indirectly exercises control. The Company is deemed to exercise control when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Also, the Company is deemed to have power when it has existing substantive voting rights that give it the current ability to govern the financial and operating activities and policies of the subsidiary.\n\nThe financial statements of the subsidiaries are included in the annual consolidated annual accounts from the date on which the Group obtains control, and are excluded from consolidation on the date that control ceases to exist.\n\n{21}------------------------------------------------\n\nImage /page/21/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, arranged vertically, and enclosed within a blue circle. The circle is not fully closed, with a gap at the top.\n\nThe Group assesses the date on which control is obtained, also taking into account the possible restrictions established in the contracts that prevent control from being obtained until circumstances that are beyond the Group's control arise, such as approval by an international body or any other condition precedent provided for in the contract.\n\nThe Group took into account potential voting rights to assess the degree of control it exercises over the Group companies.\n\nThe accounting policies of the subsidiaries were adapted to the Group's accounting policies.\n\nAll the subsidiaries that form part of the Acerinox Group and were included in the scope of consolidation at 31 December 2023 and 2022 are listed in **Note 5**.\n\n#### **b) Non-controlling interests**\n\n\"Non-controlling interests\" represents the portion of the Group's profit or loss and net assets attributable to non-controlling interests. The share of non-controlling interests both in the Group's net assets and in comprehensive income for the year are presented separately in consolidated equity, in the consolidated statement of profit or loss and in the consolidated statement of comprehensive income.\n\nNon-controlling interests in the subsidiaries acquired are recognised at the date of acquisition at the proportionate share of the fair value of the net identifiable assets.\n\nThe profit or loss and each component of other comprehensive income are allocated to the equity attributable to shareholders of the parent and to non-controlling interests in proportion to their relative interests, even if this results in the non-controlling interests having a deficit balance.\n\nWhen the share of equity held by non-controlling interests changes, the Group adjusts the carrying amount of the controlling and non-controlling interests to reflect the changes that have arisen in its relative interests in the subsidiary. The Group recognises directly in equity the difference between the amount by which the non- controlling interests are adjusted and the fair value of the consideration paid or received, and attributes that difference to the owners of the parent. The profit or loss attributable to the non-controlling shareholder from the date of acquisition is recognised as profit or loss attributable to noncontrolling interests.\n\nThe Group assesses whether there are any clauses or financial instruments in contracts with non-controlling interests that could oblige the entity to deliver cash or another financial asset, or to settle it as if it were a financial liability, in order to determine its classification and measurement. For this purpose, all the terms and conditions agreed between the members of the Group and the holders of the instrument are considered. To the extent that there is an obligation or settlement provision, the instrument is classified as a financial liability in the consolidated financial statements.\n\nThese options are occasionally conditional on the occurrence of an uncertain future event beyond the control of both the issuer and the holder of the instrument. If, in addition, the issuer of such an instrument does not have the unconditional right to avoid delivering cash or another financial asset, it is deemed to be a financial liability of the issuer unless, inter alia, the part of the contingent settlement provision that could require settlement in cash or another financial asset is not genuine, i.e. is extremely exceptional, highly abnormal and very unlikely.\n\n#### **c) Associates**\n\nAssociates are all entities over which the Group exercises significant influence in relation to financial and operating decisions, but over which it does not have control or joint control. In general terms, the Group is considered to exercise significant influence when it holds more than 20% of the voting power.\n\nThe financial statements of the associates are included in the consolidated financial statements using the equity method. The Group's share of the post-acquisition profits or losses of its associates is recognised in profit or loss for each year with a credit or charge to \"share of results of companies accounted for using the equity method\" in the consolidated statement of profit or loss.\n\nLosses of associates attributable to the Group are limited to the value of the net investment, since the Group has not incurred legal or constructive obligations.\n\nThe Group does not have any significant investments in associates.\n\n{22}------------------------------------------------\n\nImage /page/22/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is enclosed within a blue circle.\n\n#### **d) Business combinations**\n\nThe Group applied IFRS 3, \"Business Combinations\" (revised 2008) to business combinations carried out on or after 1 January 2010.\n\nThe Group applies the acquisition method for business combinations.\n\nThe acquisition date is that on which the Group obtains control of the acquiree. The Group considers that control is obtained when the investor, due to its involvement with the acquiree, is exposed, or has rights, to variable returns and has the ability to affect those returns through its power over the investee. In an acquisition, the Group is generally deemed to have obtained control when the consideration is legally transferred and the assets and liabilities of the acquiree are acquired and assumed, respectively. However, control may be obtained at a prior date if, by means of a written agreement, a prior date of obtainment of control is envisaged. The Group considers all pertinent facts and circumstances in order to identify the acquisition date.\n\nThe consideration transferred in a business combination is calculated as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred or assumed, the equity interests issued and any contingent consideration that depends on future events or the fulfilment of certain conditions in exchange for control of the acquiree.\n\nThe consideration transferred excludes any amounts that are not part of the exchange for the acquiree. The costs associated with an acquisition are recognised as expenses on an accrual basis.\n\nThe Group recognises at their acquisition-date the fair value of assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree. The liabilities assumed also include contingent liabilities to the extent that they represent present obligations that arise from past events and their fair value can be measured reliably. In addition, at the acquisition date the Group recognises the indemnification assets granted by the seller following the same measurement criteria of the indemnification item of the acquired business, considering, where appropriate, the insolvency risk and any contractual limitation on the indemnified amount.\n\nUntil they are settled, cancelled or expire, contingent liabilities are measured at the higher of the amount initially recognised less the amounts that should be recognised in profit or loss in accordance with the standard on recognition of revenue from customers and the amount that would be recognised in accordance with the standard on measuring provisions.\n\nThe following are exempted from the application of the general measurement criteria: non-current assets and disposal groups classified as held for sale, long-term defined benefit obligation liabilities, share-based payment transactions, deferred tax assets and liabilities and intangible assets arising from the acquisition of previously granted rights, which shall be measured in accordance with their respective accounting policies.\n\nThe assets acquired and liabilities assumed are classified and designated for subsequent measurement on the basis of the contractual terms, economic conditions, operating and accounting policies and other pertinent conditions existing at the acquisition date, except in the case of leases in which the business acquired is the lessor, and insurance contracts.\n\nThe acquirer's application of the recognition principle and conditions may result in recognising some assets and liabilities that the acquiree had not previously recognised as assets and liabilities in its financial statements.\n\nAny excess of the consideration transferred plus the value assigned to the non-controlling interests over the net amount of the assets acquired and the liabilities assumed is recognised as goodwill.\n\nIf the business combination can only be provisionally calculated, the identifiable net assets are initially recognised at their provisional amounts, recognising the valuation adjustments made in the measurement period as if they had been known at the acquisition date and restating, where applicable, the comparative figures for the previous year. In any event, adjustments to provisional amounts only reflect information on facts and circumstances that existed at the acquisition date and, if known, would have affected the measurement of the amounts recognised at that date. The measurement period will end as soon as the acquirer receives the information it was seeking about facts and circumstances that existed at the date of acquisition or concludes that no further information can be obtained. However, such measurement period shall not exceed one year from the date of acquisition.\n\nAfter the measurement period ends, the initial accounting for a business combination is revised only to correct an error.\n\n{23}------------------------------------------------\n\nImage /page/23/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is positioned within a partial blue circle, which curves around the text, creating a sense of enclosure and emphasis.\n\n#### **e) Balances and transactions eliminated on consolidation**\n\nIntra-Group balances and transactions, as well as unrealised gains or losses with third parties arising from such transactions, are eliminated on preparation of the consolidated annual accounts.\n\n#### **2.6Translation differences**\n\n#### **a) Functional and presentation currency**\n\nThe items included in the annual accounts of each Group company are measured using the currency of the primary economic environment in which the company operates (its functional currency). The functional currency of the majority of the Group companies is the local currency, except for Bahru Stainless, Sdn. Bhd, NAS Canada, Inc. and NAS Mexico, S.A de CV, whose functional currency is the USD.\n\nThe consolidated annual accounts are presented in thousands of euros, since the euro is the functional and presentation currency of the parent.\n\n#### **b) Foreign currency transactions, balances and cash flows**\n\nForeign currency transactions are translated to the functional currency using the exchange rate prevailing at the date of the transaction.\n\nMonetary assets and liabilities denominated in foreign currencies are translated at the reporting date at the exchange rates then prevailing. Any exchange differences that arise from such translation are recognised in the consolidated statement of profit or loss.\n\nNon-monetary assets and liabilities denominated in foreign currencies and recognised at historical cost are translated to the functional currency using the exchange rates prevailing at the date of the transaction. The historical cost of non-monetary assets belonging to countries considered to be hyperinflationary is remeasured at the end of each reporting period, applying a price index to express them in terms of the measuring unit current at the end of the reporting period. Section d) includes a detailed description of the measurement of line items corresponding to hyperinflationary economies.\n\nNon-monetary assets and liabilities denominated in foreign currencies and measured at fair value are translated to the corresponding functional currency by applying the measurement date exchange rate. Exchange differences on non-monetary items measured at fair value are presented as a component of the fair value gain or loss.\n\nIn presenting the consolidated statement of cash flows, cash flows arising from transactions in a foreign currency are translated to the functional currency by applying the exchange rates prevailing at the date of the cash flow.\n\nExchange differences resulting from the settlement of foreign currency transactions and from translation to the functional currency of monetary assets and liabilities denominated in foreign currency are recognised in profit or loss.\n\n#### **c) Translation of foreign operations**\n\nFor the preparation of the Group's Consolidated Financial Statements, the assets and liabilities of the companies whose functional currency is not the euro are translated to euros by applying the exchange rates prevailing at the reporting date; on the other hand, income and expenses are measured at the average exchange rate for the period. Any exchange differences arising from that measurement are recognised as a separate component of equity and of the consolidated statement of comprehensive income (\"translation differences\"). The translation differences are reclassified to profit or loss when the company that generates them ceases to form part of the Group.\n\nThe Group applied the exemption for first-time application provided for in IFRS 1 in relation to cumulative translation differences and, accordingly, the translation differences recognised in the consolidated annual accounts that were generated prior to 1 January 2004 are shown in retained earnings in reserves.\n\nIn presenting the consolidated statement of cash flows, cash flows, including the comparative balances of foreign subsidiaries, are translated to euros by applying the same criteria as those applied for the restatement of the financial statements.\n\n{24}------------------------------------------------\n\nImage /page/24/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a circular pattern. The text is surrounded by a blue circle.\n\n#### **d) Restatement of financial information concerning hyperinflationary economies**\n\nOn 1 July 2018, Argentina was declared to be a hyperinflationary economy, as it met the classification requirements established in IAS 29. The Acerinox Group has an entity in Argentina, as detailed in **Note 5**.\n\nThe financial statements of an entity that reports in the currency of a hyperinflationary economy are stated in terms of the measuring unit current at the reporting date. Both the comparative figures for the previous year and the information for prior periods are restated only when they are significant for the Group, in terms of the measuring unit current at the end of the reporting period. Since most of the non-monetary items are recognised at historical cost, the restated cost of each item is determined by applying to the historical cost and to the accumulated depreciation and amortisation charge the change in a general price index from the date of acquisition until the end of the reporting period. The Group did not restate the balances for prior years since the impact is not significant.\n\nAt the beginning of the first period of application of this standard, the components of owners' equity, except retained earnings and asset revaluation surpluses, shall be restated by applying a general price index to the various items from the dates on which they were contributed or from the date on which they otherwise arose. The restated retained earnings shall arise from the remaining amounts in the consolidated statement of financial position. At the end of the first period and in subsequent periods, all the components of equity shall be restated by applying a general price index from the beginning of the period, or from the contribution date, if later.\n\nAll the items in the statement of comprehensive income shall be stated in the monetary unit current at the end of the reporting period. For this purpose, all the amounts shall be restated to reflect the change in the general price index from the date on which the income and expenses were included in the financial statements.\n\nGains or losses arising from the net currency position shall be included in profit or loss for the year.\n\n**Note 14.6** includes the impacts of the measurement of the financial statements of Acerinox Argentina pursuant to this standard both in 2023 and 2022.\n\n#### **2.7 Intangible assets**\n\nThe Group recognises an intangible asset only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and if the cost of the asset can be measured reliably.\n\nThe Group recognises all the intangible assets identified in a business combination separately from goodwill, irrespective of whether the acquiree had recognised the asset prior to the business combination occurring.\n\nIntangible assets are initially recognised at cost. The cost of intangible assets acquired in a business combination is equal to the acquisition-date fair value. The fair value of an intangible asset will reflect the expectations of the market participants at the acquisition date about the probability that the expected future economic benefits embodied in the asset will flow to the entity.\n\n#### **a) Goodwill**\n\nBusiness combinations are accounted for using the acquisition method. Goodwill represents the excess of the cost of acquisition of the Group's interest over the fair value of the identifiable net assets of the acquiree at the acquisition date (assets, liabilities and contingent liabilities).\n\nIn the case of the Acerinox Group, the goodwill recognised in the consolidated financial statements includes mainly the goodwill that arose in 2020 on acquisition of all the shares of VDM Metals holding, GmbH.\n\nAfter initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but rather is assessed annually (or more frequently if events indicating a potential impairment loss on the asset are identified) for impairment, pursuant to IAS 36. Accordingly, goodwill is allocated to each of the cash-generating units of the company to which the economic benefits of the business combination synergies are expected to flow. If the recoverable amount of the cash-generating unit is lower than the carrying amount of the goodwill, the corresponding impairment loss shall be recognised. The recoverable amount of the cash- generating units to which the Group's goodwill is allocated is determined based on calculations of their value in use (see **Note 2.11**).\n\n{25}------------------------------------------------\n\nImage /page/25/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue semi-circle above it. The semi-circle is thicker at the top and tapers down towards the ends.\n\nGains from a bargain purchase arising from a business combination are recognised directly in profit or loss, once the assets, liabilities and contingent liabilities of the acquiree have been remeasured, as established in the standard.\n\nInternally generated goodwill is not recognised as an asset.\n\n#### **b) Internally generated intangible assets**\n\nResearch expenditure aimed at acquiring new scientific or technical knowledge is recognised as an expense in the consolidated statement of profit or loss when incurred.\n\nDevelopment expenditure relating to research findings applied to produce new products and processes, or to significantly improve existing products and processes, is capitalised if the product or process is considered technically and commercially feasible, if the Group has the resources required to complete the development programme and if it is considered that it will generate future cash flows that will enable its recovery.\n\nDevelopment expenditure is capitalised by crediting \"work performed by the Group on non-current assets\" in the consolidated statement of profit or loss. The capitalised costs include the cost of materials, direct labour and directly attributable general expenses.\n\nThe Group does not capitalise development expenditure in cases in which, following the start-up of the project, the future cash flows of the projects obtained through research and development activities are not monitored.\n\nThe costs incurred in performing activities for which the costs attributable to the research phase cannot be clearly distinguished from those corresponding to the intangible asset development phase are recognised in the consolidated statement of profit or loss.\n\nCapitalised development expenditure is not amortised when the project is under way. Once these projects have been successfully concluded, the expenditure is amortised systematically over their estimated useful lives. In the event that the circumstances that permitted capitalisation of the project expenditure change, the portion not yet amortised is taken to profit or loss in the year of the change in circumstances.\n\nThe findings of the R&D&I activities are patented in some cases, especially in the Group's new division dedicated to the manufacture of high-performance alloys.\n\n#### **c) Customer portfolio**\n\nAs part of the business combination with the acquisition of the VDM Group, the Group recognised an intangible asset arising from the acquired company's customer portfolio.\n\nThe Group considers that the relationship with customers arising from a business combination is an identifiable asset provided that it arises from contractual or other legal rights, the rights are separable and they are expected to generate future economic benefits. It is an asset with a finite useful life.\n\n#### **d) Computer software**\n\nAcquired licenses for computer software are capitalised based on the costs incurred to acquire them and prepare them for use of the specific software.\n\nComputer software maintenance costs are recognised as such on an accrual basis.\n\nCosts directly related to the production of unique and identifiable computer software by the Group, provided that they are likely to generate economic benefits exceeding those costs over more than one year, are recognised as intangible assets. The capitalised costs include direct labour and directly attributable general expenses.\n\n#### **e) Depreciation and amortisation**\n\nIntangible assets with finite useful lives are amortised systematically over the years of their useful life. Intangible assets are amortised from the date on which they become ready for use.\n\n{26}------------------------------------------------\n\nImage /page/26/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is stacked vertically, with \"ACER\" on top and \"INOX\" below. The circle is thick and prominent, giving the logo a clean and modern appearance.\n\nThe estimated useful lives are as follows:\n\n- Intellectual property: 5 years\n- Patents: 14 years\n- Customer portfolio: 15 years\n- Computer software: 2-5 years\n\nThe Group does not have any intangible assets with an indefinite useful life.\n\nThe residual value, the depreciation method and the useful life of the assets are reviewed, and adjusted if necessary, at each reporting date. Changes in the criteria initially established are accounted for as a change in estimate.\n\n#### **2.8 Property, plant and equipment**\n\n#### **a) Owned assets**\n\nProperty, plant and equipment are stated at acquisition cost or deemed cost less any accumulated depreciation and any recognised impairment losses. Property, plant and equipment acquired in business combinations are recognised at acquisitiondate fair value.\n\nIn the event that an item of property, plant and equipment requires a period of time to get ready for its intended use, it is classified as property, plant and equipment in the course of construction. An asset is considered to be ready for its intended use when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Once in use, it is reclassified to the corresponding category of property, plant and equipment, depending on its nature.\n\nThe cost of the property, plant and equipment constructed by the Group is determined by following the same principles that would be used had it been acquired, also taking into account the criteria established for the production cost of inventories. The production cost is capitalised by crediting the costs attributable to the asset to accounts under \"work performed by the Group on non-current assets\" in the consolidated statement of profit or loss.\n\nBorrowing costs arising from loans directly related to financing the construction of items of property, plant and equipment are capitalised as a portion of the cost until the start-up of the asset. Also, the Group capitalises certain borrowing costs corresponding to loans that are not directly earmarked for the financing of investments, applying a capitalisation rate to the amounts used to finance these assets. This capitalisation rate is calculated based on the weighted average of the borrowing costs applicable to loans received by the entity which differ from those specifically designated to finance the asset. The amount of the capitalised costs does not in any case exceed the total amount of borrowing costs incurred in the period.\n\nThe cost of property, plant and equipment includes the costs related to major repairs, which are capitalised and depreciated over the estimated period until the next major repair.\n\nAfter initial recognition of the asset and once it is ready for use, only the costs incurred for improvements that it is probable will give rise to future economic benefits and that can be measured reliably are capitalised. In this connection, the costs of day-to-day servicing of property, plant and equipment are recognised in profit or loss as they are incurred.\n\nThe Group classifies spare parts as inventories, unless they are expected to be used for more than one year, in which case they are classified as property, plant and equipment and are depreciated over their useful life. Once a spare part has been used to replace a damaged part, the latter is written off at its carrying amount. Property, plant and equipment spare parts are classified under \"plant and machinery\" in the breakdown of property, plant and equipment in **Note 8**.\n\nGains or losses on the sale or disposal of property, plant and equipment are recognised in profit or loss as operating income or expenses.\n\n#### **b) Depreciation and amortisation**\n\nItems of property, plant and equipment are depreciated systematically on a straight-line basis over the years of their useful life. For these purposes, depreciable amount is understood to be acquisition or deemed cost less residual value. The Group calculates the depreciation charge separately for each part of an item of property, plant and equipment whose cost is significant in relation to the total cost of the item.\n\n{27}------------------------------------------------\n\nImage /page/27/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the top, giving it a crescent shape.\n\nThe residual value, the depreciation method and the useful life of the assets are reviewed, and adjusted if necessary, at each reporting date. Changes in the criteria initially established are accounted for as a change in estimate.\n\nLand is not depreciated, unless it is acquired in usufruct for a certain number of years, in which case it is depreciated over the term of the usufruct.\n\nProperty, plant and equipment are depreciated over the following years of useful life:\n\n- Buildings: 10-50\n- Plant and machinery: 3-30\n- Other items of property, plant and equipment: 2-10\n\n#### **2.9 Investment property**\n\nInvestment property is considered to consist of the buildings owned by the Group that are not occupied by it and are held to earn returns, either through rental or for capital appreciation.\n\nThe Group only transfers items between \"property, plant and equipment\" and \"investment property\" when a change in the use of the property occurs.\n\nInvestment property is initially recognised at cost, including transaction costs. After initial recognition, the Company applies the same requirements established for property, plant and equipment.\n\nLease income is recognised as indicated in **Note 2.20-b**).\n\n#### **2.10 Right-of-use assets**\n\nAt inception of a contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a specified period of time in exchange for consideration.\n\nWhen the Group acts as lessee, it recognises in the consolidated statement of financial position the assets and liabilities arising from the lease (except in the case of short-term leases and leases for which the underlying asset is of low value). The Group measures the right-of-use asset at cost, corresponding to the present value of the lease payments expected to be made over the lease term.\n\nIn order to determine the lease payments, the Group takes into account:\n\n- **a)** fixed payments, less any lease incentives receivable;\n- **b)** variable lease payments that depend on an index or a rate;\n- **c)** the amounts expected to be payable by the lessee under residual value guarantees;\n- **d)** the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and\n- **e)** payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.\n\nThe Group measures lease liabilities at the present value of the total remaining lease payments, discounted using either the interest rate implicit in the lease, if that rate can be readily determined, or the lessee's incremental borrowing rate, for cases in which the rate is not established in the lease.\n\nThe Group considers the lease term to be the non-revocable period of a lease, plus the periods covered by the option to extend the lease, if the lessee is reasonably certain to exercise that option.\n\nIn determining the term of the lease and assessing the length of the non-revocable period of a lease, an entity applies the definition of a contract and determines the period for which the contract is enforceable. A lease is no longer enforceable when the lessee and the lessor each has the right to terminate the lease without permission from the other party.\n\nAfter the commencement date, the Group measures the asset at its initial cost less accumulated depreciation and any accumulated impairment losses, adjusted to reflect any remeasurement of the lease liability.\n\n{28}------------------------------------------------\n\nImage /page/28/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is in a dark blue color. The text is surrounded by a blue oval shape.\n\nAlso, after the commencement date the Group measures the lease liability at amortised cost using the effective interest method. Whenever there are changes in contracts, the lessee shall remeasure the lease liability in order to reflect the new lease payments. The amount of the remeasurement of the lease liability shall be recognised as an adjustment to the right-ofuse asset.\n\nIn the case of short-term leases and leases for which the underlying asset is of low value, the Group recognises the lease payments as expenses on a straight-line basis over the lease term.\n\n**Note 10** includes detailed information on the right-of-use assets and lease liabilities recognised by the Group.\n\n#### **2.11 Impairment of non-financial assets**\n\nThe carrying amount of the Group's non-financial assets other than inventories and deferred tax assets is reviewed at the end of each reporting period in order to assess whether any indication of impairment thereof exists. If such an indication exists, the Company estimates the recoverable amount of the asset.\n\nThe Group considers that indications of impairment exist when there is/are a significant decrease in the value of the asset, significant changes in the legal, economic or technological environment that could affect the measurement of assets, obsolescence or physical impairment, idle assets, low returns on assets, discontinuation or restructuring plans, repeated losses at the entity or substantial deviation from the estimates made. That is to say, the assessment of the existence of indications of impairment takes into account both external sources of information (technological changes, significant variations in market interest rates, market values of assets, etc.) and internal sources (evidence of obsolescence, etc.).\n\nAs established in **Note 2.7**, the recoverable amount of goodwill, which is not amortised, and of intangible assets not yet available for use is estimated at the end of each reporting period, unless prior to this date indications of a possible loss of value had been identified, in which case the assets would be tested for impairment.\n\nImpairment losses on an asset are recognised whenever the carrying amount of the asset, or of the corresponding cashgenerating unit, exceeds its recoverable amount. Impairment losses on an asset are recognised as an expense in the consolidated statement of profit or loss.\n\nThe recoverable amount of an asset is the higher of fair value less costs of disposal and value in use.\n\nIn order to determine the recoverable amount, the Group occasionally may hire an independent expert.\n\nValue in use is the present value of estimated cash flows, applying a discount rate that reflects the present market valuation of the time value of money and the specific risks of the asset in question. For assets that do not generate cash inflows themselves, the recoverable amount is calculated based on the cash-generating unit to which the asset belongs, considered as the smallest identifiable group of assets capable of generating cash inflows for the entity that are largely independent of the cash inflows from other assets or groups of assets.\n\nIn estimating the value in use of an asset, the Group takes into account the estimated future cash flows that the entity expects to obtain from the asset, expectations regarding possible variations in the amount or timing of those future cash flows, the time value of money and the risks inherent in the asset in question and any other factors that any other market participant would reflect in pricing the future cash flows derived from the asset. The Group also takes climate risks into account in determining future projections.\n\nThe effects of uncertainties in estimating the asset's value in use may be reflected as adjustments to future cash flows or as adjustments to the discount rate, with the result being a weighted average of all possible outcomes.\n\nIn determining value in use, the Group bases its cash flow projections on reasonable and well-founded assumptions that represent management's best estimates of the set of economic conditions that will prevail over the remaining life of the asset, giving greater weight to external evidence. Also, these cash flow projections are based on the budgets most recently approved by management. These projections generally cover a maximum period of five years, unless a longer time period can be justified.\n\nThe Group estimates cash flow projections beyond the period covered by the budgets, extrapolating such projections using a constant growth rate which does not exceed the average long-term growth rate of the stainless-steel industry, or the rate of the country or countries in which the entity operates.\n\n{29}------------------------------------------------\n\nImage /page/29/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with the letters stacked vertically. The word is enclosed within a blue circle that is open on the left side.\n\nManagement assesses the reasonableness of the assumptions on which its current cash flow projections are based by examining the causes of differences between past and current cash flow projections, ensuring that the assumptions on which its current cash flow projections are based are consistent with actual past performance, and considering that the effects of subsequent events or circumstances that did not exist when those actual cash flows were generated justify those differences.\n\n**Notes 7.1** and **8.1** describe the variables and assumptions used by the Group to calculate recoverable amounts of both goodwill and tangible assets of the Group for which there is evidence of impairment, as well as to identify the cashgenerating units.\n\nExcept in the case of goodwill, impairment losses on an asset which were recognised in prior years are reversed through profit or loss only if there has been a change in the estimates used to determine the asset's recoverable amount since the most recent impairment loss was recognised. However, the new carrying amount may not exceed the carrying amount (net of depreciation and amortisation) that would have been determined had no impairment loss been recognised.\n\n#### **2.12 Financial instruments**\n\nThe Group recognises a financial asset or financial liability in its consolidated statement of financial position when, and only when, it is a party to the contractual terms and conditions of the instrument in question.\n\n#### **2.12.1 Classification**\n\nThe Group classifies financial assets on the basis of their measurement either at amortised cost or at fair value through profit or loss or other comprehensive income. The basis for classification depends on the entity's business model and the characteristics of the financial asset's contractual cash flows.\n\nFinancial liabilities are classified on the basis of their measurement. In general terms, they are classified as being measured at amortised cost, except for financial liabilities measured at fair value through profit or loss or other comprehensive income.\n\nThe Group does not generally reclassify any financial assets or liabilities, unless the business model changes.\n\n#### **2.12.2 Financial assets**\n\nA financial asset is any contractual right to receive cash or another financial asset.\n\nFinancial assets are initially recognised at fair value plus the transaction costs that are directly attributable to their acquisition or issue.\n\nThey are subsequently measured on the basis of each of the categories in which they have been classified:\n\n#### **a) Financial assets at fair value through profit or loss**\n\nThe Group includes derivative financial instruments in this category, unless they are designated as hedge accounting instruments and meet the effectiveness conditions to be accounted for as such.\n\nThe derivative financial instruments included in this category are classified as current assets and are measured at fair value. Transaction costs that are directly attributable to the acquisition are recognised as an expense in profit or loss.\n\nThe changes in fair value are recognised in profit or loss. The fair value of financial instruments used to hedge items classified in financial profit or loss (mainly exchange differences) is recognised under \"revaluation of financial instruments at fair value\". However, for derivatives used to hedge the prices of raw materials used by the Company in the production cycle or earmarked for sale and which are not designated as hedges for accounting purposes, such changes are recognised under \"other operating income\" or \"other operating expenses\", depending on whether the measurement gives rise to a gain or a loss.\n\n#### **b) Financial assets at amortised cost**\n\nThis category includes non-derivative financial assets with fixed or determinable payments which are not traded in an active market. Specifically, it includes loans granted and accounts receivable. They are classified as non-current only when they mature after more than 12 months from the reporting date. They are initially recognised at fair value which, in the absence of\n\n{30}------------------------------------------------\n\nImage /page/30/Picture/1 description: The image features the logo of Acerinox, a company specializing in stainless steel. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, presented in a vibrant blue color. The text is positioned within a circular shape, also rendered in the same blue hue. The overall design is clean and corporate, conveying a sense of professionalism and reliability.\n\nevidence to the contrary, is the transaction price plus any directly attributable transaction costs, and are subsequently measured at amortised cost using the effective interest method, except for accounts receivable measured at their transaction price as they do not have a significant financial component, they are expected to be received in the short-term and the effect of not discounting the related cash flows is not significant.\n\nThe Group makes the required valuation adjustments in accordance with the expected credit loss model, which takes into account historical claims incurred and other external factors. The impairment losses are calculated as the difference between the carrying amount of the aforementioned assets and the present value of the estimated future cash flows that they are expected to generate, discounted at the effective interest rate calculated upon initial recognition. These losses are recognised as an expense in the consolidated statement of profit or loss and are reversed with the recognition of income in profit or loss when the causes of their original recognition cease to exist.\n\nThe impairment loss model used by the Group is based on a historical analysis of the average credit losses at each of the subsidiaries and on the claims incurred under the credit insurance policies taken out, taking into account any non-recoverable amount (maximum coverage of 85%-95% and deductibles), and any post-claim recoveries, whether from the insurance company or the customers themselves. These estimates are reviewed within the Group's credit risk control system (Commercial, Financial and Commercial Risk Departments, the Risk Committee and the Corporate Risk Management Department), which continuously monitors the particular markets of each subsidiary, receives the input of specialists from insurance companies and reviews future estimates from international organisations of renowned prestige (IMF, OECD, etc.), also taking into account the macroeconomic estimates of each country. The Group takes into account and monitors significant changes in credit risk that may arise during the terms of the loans.\n\nAmounts relating to discounted notes and bills and factoring of trade receivables are classified until maturity as trade receivables and, simultaneously, as current bank borrowings, unless substantially all the risks and rewards associated with those assets have been transferred, in which case they are derecognised.\n\nThe Group considers that it has transferred a financial asset when it has transferred the rights to receive the cash flows from the asset, or when it has retained the rights but has assumed the contractual obligation to pay those assets to another entity. In this case, the Group also considers the various additional conditions established in the standard (it has no obligation to pay any amount to another entity, unless it receives the cash flows derived from the financial asset; it cannot sell or offer the transferred financial assets as collateral; and it has an obligation to pay the cash flows received without significant delay). Also, if the Group does not retain the risks and rewards associated with those assets, it derecognises them.\n\nMost of the factoring arrangements entered into by the Group meet this definition and, therefore, are derecognised from the consolidated statement of financial position.\n\n#### **c) Financial assets at fair value through other comprehensive income**\n\nThis category includes the Group's ownership interests in the share capital of other companies over which it does not have control or exercise significant influence, and which it does not hold for trading.\n\nThese assets are generally classified as assets measured at fair value through profit or loss; however, the Group availed itself of the irrevocable option permitted by the standard to choose, on initial recognition, to present subsequent changes in fair value in other comprehensive income, since these assets are not held for trading.\n\nThey are initially recognised at fair value which, unless there is evidence to the contrary, is the transaction price plus any directly attributable transaction costs.\n\nThese assets are subsequently measured at fair value, provided that this can be measured reliably, recognising the gain or loss in other comprehensive income.\n\nThe fair value of listed securities is determined by reference to the share price. The fair value of financial assets not listed on an organised market is calculated by discounting future cash flows.\n\nOwnership interests in the share capital of companies included in this category and whose market value cannot be measured reliably are measured at acquisition cost less any impairment losses.\n\nAcquisitions and disposals of investments are recognised at the date on which the Group undertakes to acquire or sell the asset. Investments are derecognised when the rights to the cash flows from the investments expire or have been transferred and the Group has transferred substantially all the risks and rewards of their ownership.\n\n{31}------------------------------------------------\n\nImage /page/31/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is enclosed within a blue circle, with the top and bottom portions of the circle slightly thicker than the sides. The background is white.\n\nThe difference between the selling price and the fair value of financial assets at fair value through other comprehensive income is recognised in other comprehensive income.\n\n#### **2.12.3 Financial liabilities**\n\nFor measurement purposes, the Group's financial liabilities are classified under the following categories:\n\n#### **a) Financial liabilities at amortised cost**\n\nThis category includes the accounts payable and bonds issued by the Group.\n\nIt includes non-derivative financial liabilities with fixed or determinable payments. They are initially recognised at cost, which matches their fair value, less any transaction costs incurred. They are subsequently measured at amortised cost using the effective interest method. Any difference between the amount paid (net of transaction costs) and the repayment value is recognised in profit or loss. However, trade payables maturing within one year which do not have a contractual interest rate and are expected to be paid at short-term are stated at their nominal value.\n\nThe Group derecognises a financial liability when the obligation specified in the contract is either discharged or cancelled or expires.\n\nWhen debt is refinanced, the Company assesses the significance of the modifications made to determine whether they are substantially different and, therefore, recognises the effects of the new agreement as if it were an extinguishment and, simultaneously, the recognition of a new loan. The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. In addition, qualitative factors will be taken into account in the evaluation, such as the change in the interest rate from variable to fixed or the change in currency. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying amount of the liability and are amortised over the remaining term of the modified liability.\n\nAlso, the Group has entered into reverse factoring arrangements with various financial institutions in order to manage payments to suppliers. Trade payables payment of which is managed by the banks are recognised under \"trade and other payables\" until the related obligation is discharged or cancelled or expires.\n\n#### **b) Financial liabilities at fair value through profit or loss**\n\nThe Group includes derivative financial instruments in this category, provided that they are not financial guarantee contracts or designated as hedging instruments.\n\nThey are measured at fair value. The amount of the change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability shall be presented in other comprehensive income. The remaining amount of the change in the fair value of the liability shall be presented in profit or loss, unless such treatment would create an accounting mismatch in profit or loss, in which case the entire fair value change shall be recognised in profit or loss.\n\nThe fair value of financial instruments used to hedge items classified in financial profit or loss (exchange differences and interest) is recognised under \"revaluation of financial instruments at fair value\". However, for derivatives used to hedge the prices of raw materials used by the Company in the production cycle or earmarked for sale and which are not designated as hedges for accounting purposes, such changes are recognised under \"other operating income\" or \"other operating expenses\", depending on whether the measurement gives rise to a gain or a loss.\n\nAt the Acerinox Group, derivative financial instruments are generally used on a short-term basis and, therefore, the change attributable to the credit risk is not significant.\n\n#### **2.12.4 Hedge accounting**\n\nThe aim of hedge accounting is to represent in the financial statements the effect of the Group's risk management activities in which derivative financial instruments are used to hedge exposure to certain risks that might affect the statement of profit or loss. A hedging relationship qualifies for hedge accounting under IFRS 9 only if the following criteria are met:\n\n{32}------------------------------------------------\n\nImage /page/32/Picture/1 description: The image contains the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue crescent shape surrounding the text. The crescent shape is thicker at the top and tapers towards the bottom, creating a circular effect around the word.\n\n- **a)** The hedging relationship consists only of eligible hedging instruments and eligible hedged items.\n- **b)** At the inception of the hedging relationship there is formal designation and documentation of the hedging relationship and the entity's risk management objective and strategy for undertaking the hedge.\n- **c)** The hedging relationship meets the following hedge effectiveness requirements:\n\t- i. There is an economic relationship between the hedged item and the hedging instrument.\n\t- ii. The credit risk does not dominate the value changes resulting from that economic relationship.\n\t- iii. The hedge ratio is the same as that resulting from the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item.\n\nAt the inception of the hedge, the Group designates and formally documents the hedging relationship and the objective and strategy for undertaking the hedge.\n\nDerivative financial instruments are initially recognised at acquisition cost, which matches fair value, and are subsequently measured at fair value.\n\nDerivative financial instruments that do not qualify for hedge accounting are classified and measured as financial assets or liabilities at fair value through profit or loss. Derivative financial instruments that fulfil the criteria for cash flow hedge accounting are treated as such. Therefore, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income and subsequently recognised in profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.\n\nThe Group prospectively discontinues hedge accounting when the hedging instrument expires, is sold or the hedge no longer meets the criteria for hedge accounting. In such cases, the cumulative gain or loss recognised in equity is recognised in profit or loss.\n\nThe Group only undertakes cash flow hedges.\n\n#### **2.12.5 Fair value measurement**\n\nFinancial instruments recognised at fair value are classified, based on the valuation inputs, in the following hierarchies:\n\nLEVEL 1: includes financial instruments the fair value of which is determined by reference to quoted prices in active markets.\n\nLEVEL 2: includes financial instruments the fair value of which is determined by reference to variables, other than quoted prices, observable in the market.\n\nLEVEL 3: includes financial instruments the value of which is determined by reference to variables that are not observable in the market.\n\n#### **2.12.6 Renewable Energy Contracts (PPA)**\n\nThe Group has signed PPA (Power Purchase Agreement) contracts for the purchase of long-term renewable energy. These contracts are concluded through the physical purchase of energy consumed by the Group in its stainless-steel production facilities. These contracts do not allow cancellation through the exchange of financial instruments. They are therefore supply contracts for the Group's own use and the Group recognises the energy purchases in the income statement at the time of delivery for consumption and does not treat them as financial instruments.\n\n#### **2.13 Inventories**\n\nInventories are initially recognised at acquisition or production cost. Subsequently, when the net realisable value of inventories is lower than their acquisition or production cost, the appropriate write-downs are made, with the related effect recognised in profit or loss.\n\nThe Group uses the same cost formula for all inventories that have the same nature and a similar use within the Group. They are measured using the weighted average cost formula.\n\nFinished goods and work in progress are measured at the weighted average cost of raw and other materials consumed, incorporating the attributable portion of direct and indirect labour and general manufacturing costs based on the higher of normal production capacity or actual production. The Group does not include the cost of underutilisation of production capacity in the value of finished goods and work in progress. These are recorded directly as expenses for the period.\n\n{33}------------------------------------------------\n\nImage /page/33/Picture/1 description: The image shows the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circular shape that is open on the left side, creating a crescent-like effect. The blue color is a deep, saturated shade.\n\nNet realisable value is the expected selling price of those goods less costs to sell. In the case of work in progress, the estimated costs of completion are also deducted from this price.\n\nThe Group does not write down raw materials if the finished products in which they will be incorporated are expected to be disposed of at or above production cost.\n\nAny write-downs that reduce inventories to their net realisable value are reversed, up to the cost of the inventories, if the circumstances that gave rise to the write-downs cease to exist.\n\n#### **2.13.1 Emission allowances**\n\nThe Group recognises CO<sup>2</sup> emission allowances as inventories.\n\nCO<sup>2</sup> emission allowances are measured at acquisition cost. Freely allocated emission allowances are initially recognised at their market value on surrender. Simultaneously, a balancing entry for a grant is recognised for the same amount under \"deferred income\".\n\nEmission allowances remain classified as inventories until surrendered.\n\nAt the end of each reporting period the Group assesses whether the market value of the allowances is lower than their carrying amount in order to determine whether there are any indications of impairment. If such indications exist, the Group determines whether the allowances will be used in the production process or earmarked for sale, and only in the second case shall the appropriate write-downs be recognised. These write-downs are reversed when the causes that gave rise to the writedown of the emission allowances cease to exist.\n\nA provision for contingencies and charges is recognised for expenses relating to greenhouse gas emissions. This provision is maintained until the Group is required to discharge this obligation by surrendering the corresponding emission allowances. These expenses are incurred as the greenhouse gases are emitted.\n\nIn the case of freely allocated emission allowances, at the same time as the expense is recognised, the corresponding part of the deferred income account is cancelled, using an operating income account as the balancing entry.\n\nIn the case of exchanges of emission allowances, and since the Group's allowances were all freely acquired, the accounting treatment adopted by the Group is that applied to exchanges that lack commercial substance. The Group derecognises allowances surrendered at their carrying amount, and the amount received is recognised at fair value on surrender. The difference between the two values is recognised under \"deferred income\".\n\n**Note 11**, inventories, includes detailed information on the emission allowances allocated and used in 2023 and 2022.\n\n#### **2.14 Cash and cash equivalents**\n\nCash and cash equivalents include cash on hand, demand deposits at banks and other short-term, highly liquid investments, provided that they are readily convertible to cash and are subject to an insignificant risk of changes in value.\n\nIn the consolidated statement of cash flows, the Group classifies interest received and paid as cash flows from operating activities, dividends received as cash flows from investing activities and dividends paid as cash flows from financing activities.\n\n#### **2.15 Grants**\n\n#### **2.15.1 Grants related to assets**\n\nGrants related to assets are grants received by the Group for the acquisition of property, plant and equipment and intangible assets. They are recognised under \"deferred income\" in the consolidated statement of financial position. They are initially recognised at the original amount awarded, provided that there is reasonable assurance that the grants will be received and the\n\n{34}------------------------------------------------\n\nImage /page/34/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters. The letters are arranged in a slightly curved manner, following the curve of a blue circle that partially surrounds the text. The blue circle is thicker at the top and tapers off towards the bottom, creating a crescent shape around the word.\n\nGroup fulfils all the conditions attaching to them. They are subsequently taken to profit or loss on a straight-line basis over the useful lives of the related assets financed by the grants.\n\n#### **2.15.2 Grants related to income**\n\nGrants related to income are grants received to finance specific expenses. They are recognised as income as the expenses are incurred. Grants relating to the free allocation of CO<sup>2</sup> emission allowances are credited to profit or loss when the related greenhouse gas emission expense is recognised.\n\n#### **2.16 Employee benefits**\n\nEmployee benefits may comprise both short-term and long-term obligations, which include:\n\n- Short-term compensation: that which is expected to be paid in full within twelve months from the end of the reporting period in which the employees rendered their services. They are recognised as expenses in the year in which the service is rendered. They include wages and salaries, social security contributions, paid annual leave and sick leave, profit sharing and incentive or non-monetary compensation.\n- Termination benefits: these are recognised as staff costs only when the Group is demonstrably committed to severing its link to an employee or group of employees prior to the normal retirement date.\n\nLong-term commitments include:\n\n- Post-employment benefits, such as retirement benefits or any other form of compensation to employees upon termination of their employment.\n- Other long-term employee benefits such as length of service awards.\n- Pension benefits.\n- Share-based payment transactions.\n\nThe accounting policies followed by the Group where there are long-term commitments to its employees are as follows:\n\n#### **a) Defined contribution plans**\n\nA defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all the employees the benefits relating to the services rendered in the current and prior periods.\n\nCertain Group companies make mandatory, voluntary or contractual pension plan, life or other insurance policy contributions. Once the contributions have been paid, the Group does not have additional payment obligations. The contributions are classified as employee benefits and are recognised in profit or loss on an accrual basis. The benefits paid in advance are recognised as an asset to the extent that they may give rise to a cash refund or a reduction in future payments. No provisions are recognised for the defined contribution plans, since they do not give rise to future obligations for the Group.\n\n#### **b) Defined benefit plans and other obligations**\n\nA defined benefit plan is an obligation acquired by the Company to its employees to remunerate services rendered. These obligations are established in accordance with the local legislation in certain countries or contracts signed to that effect, or are included in collective bargaining agreements prevailing at certain Group companies.\n\nAccrued obligations are calculated as the present value of the accumulated benefits accrued by the employees until the reporting date, using actuarial assumptions. The calculations are made by independent experts. The Group companies recognise any corresponding provisions to cover these obligations.\n\nThe existing obligations may be classified as follows:\n\n- Pension plans: certain Group companies have acquired obligations to certain of their employees when they reach retirement age.\n- Early retirement benefits: certain Group companies are required to pay benefits to some of their employees if they opt to take early retirement.\n\n{35}------------------------------------------------\n\nImage /page/35/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue semi-circle above it. The semi-circle is thicker at the top and tapers down towards the ends.\n\n- Supplements: these plans relate to obligations agreed upon with certain Group employees to supplement their remuneration on retirement.\n- Other post-employment obligations: certain Group companies offer medical care to their retired former employees. The right to benefits of this nature is usually conditional upon the employee remaining at the Group until retirement and for a specified minimum number of years. The expected expenditure relating to these benefits is accrued over the employees' working lives.\n\nThe Group meets the obligations relating to the outsourcing of these commitments in the countries where this is applicable.\n\nThe defined benefit liability recognised in the consolidated statement of financial position corresponds to the present value of the defined benefit obligations existing at the reporting date less the fair value of the plan assets at that date. The Group recognises changes in the actuarial valuation of the obligations in other comprehensive income.\n\nWhere plan assets include qualifying insurance policies that exactly match the amount and timing of some or all of the benefits payable under the plan, the fair value of the insurance policies is considered equal to the present value of the related payment obligations and, accordingly, the Group nets the two positions in the consolidated statement of financial position.\n\nThe actuarial value of both the post-employment obligations and the pension benefits that have not been outsourced is calculated by an independent expert. The measurement is performed using the projected unit credit method, taking into account mortality tables, interest rates, discount rates, expected future salary increases and growth rates. In the case of postemployment obligations, estimates of future increases in healthcare expenses are also taken into account.\n\nThe Group recognises as an expense for the year the cost of services rendered, which corresponds to the increase in the present value of the defined benefit obligation resulting from the provision of services by the employee in the current year.\n\nIn addition, the Group recognises as an expense the net interest on the defined benefit obligation, which corresponds to the change during the year in the defined benefit obligation resulting from the passage of time.\n\n#### **c) Share-based payment transactions**\n\nThe Group applies IFRS 2, Share-based Payment, to equity-settled transactions in which the entity receives goods or services in exchange for shares of the parent.\n\nIn accordance with the terms of the share-based payment plans approved by the Group, the equity instruments granted do not vest immediately, and do so when a certain service period is completed, so the Group recognises an expense on a straight-line basis over the period in which the rights to receive such shares vest, recognising at the same time the corresponding increase in equity.\n\nThe Group measures the goods or services received, as well as the corresponding increase in equity, at the fair value of the equity instruments granted, at the grant date. Fair value is determined by the market price of the entity's shares adjusted to take into account the terms and conditions on which those shares were granted (except for vesting conditions, other than market conditions, which are excluded from the determination of fair value). The Group uses the appraisal of an independent expert, who uses the Monte Carlo method for this valuation.\n\nWhen the obligation to deliver its own equity instruments is to the employees of a subsidiary, the events must be qualified as a \"contribution\", in which case the parent recognises an increase in the value of its interest in the subsidiary, with a credit to its own equity instruments, and measures it at the fair value of the equity instruments transferred at the grant date.\n\nUpon delivery of the shares, the accounting difference between the equity item cancelled and the treasury shares delivered is recognised with a charge to the parent's reserves.\n\n#### **2.17 Provisions**\n\nThe Group recognises a provision when:\n\n- (i) it has a present obligation, whether legal or constructive, as a result of past events;\n- (ii) it is more likely than not that an outflow of resources will be required to settle the obligation; and\n- (iii) the amount can be estimated reliably.\n\n{36}------------------------------------------------\n\nImage /page/36/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is a dark color, possibly blue or black. The text is enclosed within a circular shape, also in a dark color, which appears to be a ring or outline. The background is white.\n\nThe amounts recognised in the consolidated statement of financial position correspond to the best estimate at the reporting date of the disbursements required to discharge the present obligation, after taking into account the risks and uncertainties relating to the provision and, where significant, the interest cost arising from discounting, provided that the disbursements that are to be made in each period can be reliably estimated. If discount rates are used, the increase in the provision as a result of the time elapsed is recognised as financial expense for the year.\n\n#### **2.18 Current/Non-current assets and liabilities classification**\n\nIn the consolidated statement of financial position the Group classifies assets and liabilities as current and non- current items. For such purpose, assets and liabilities are considered to be current when they are expected to be realised or settled within 12 months after the reporting date, or when they are cash or cash equivalents.\n\n#### **2.19 Income tax**\n\nThe income tax expense comprises current tax and deferred tax.\n\nCurrent tax is the tax expected to be paid in respect of the consolidated taxable profit or tax loss for the year, using tax rates enacted at the consolidated statement of financial position date and applicable to the current year. Current tax also includes any adjustment to the tax payable or receivable for prior years.\n\nDeferred taxes are calculated using the balance sheet liability method based on the temporary differences that arise between the tax bases of the assets and liabilities and their carrying amounts in the consolidated annual accounts. Deferred taxes are determined by applying the tax rates (and laws) enacted, or substantively enacted, at the consolidated statement of financial position date, and which are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.\n\nThe effect of a change in the tax rate on the deferred tax assets and liabilities is recognised in profit or loss, except to the extent that it relates to items previously charged or credited directly to the consolidated statement of comprehensive income.\n\nDeferred tax liabilities are always recognised. Deferred tax assets are recognised to the extent that it is considered probable that taxable profits or deferred tax liabilities will arise in the future against which the temporary differences can be offset.\n\nThe Group recognises in the consolidated statement of financial position the deferred tax assets arising from tax loss or tax credit carryforwards, provided that they are recoverable in a reasonable period of time, also taking into account the legally established limits for their use. The Group considered a period of ten years to be reasonable if permitted by tax legislation. For this purpose, the Group performs future earnings projections approved by management, which take into account present macroeconomic and market circumstances, and adjusts these projections based on current tax legislation in order to determine the taxable profit or tax loss.\n\nDeferred tax assets are reduced when it is no longer considered probable that sufficient future taxable income will be generated or there are no deferred tax liabilities against which the assets can be offset. Reductions are reversed if there is renewed expectation that sufficient taxable income will be available against which the derecognised balance can be utilised. Both the deferred tax asset reduction and its subsequent reversal are recognised as an increase or decrease in the tax expense, respectively, in profit or loss in the year in which they arise.\n\nThe Group only offsets deferred tax assets and liabilities if it has a legally enforceable right to do so, the assets and liabilities correspond to the same tax authority and the Group plans to realise current tax assets or settle current tax liabilities on a net basis.\n\nDeferred tax assets and liabilities are recognised in the consolidated statement of financial position under non-current assets or non-current liabilities, irrespective of the expected date of realisation or settlement.\n\nWhen tax audits result in a tax deficiency to be settled, the Group generally recognises such amounts as a current expense for the amount payable, and a deferred tax expense for the change in assets or liabilities arising from temporary differences resulting from the related tax assessment. If the amount payable is contested and the Group decides to file an appeal against the tax assessment, and furthermore considers that a favourable outcome for the Group is highly probable, it recognises an asset for the amounts previously paid and which it estimates will be recovered.\n\n{37}------------------------------------------------\n\nImage /page/37/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle that is open at the bottom.\n\nIn connection with the limited scope amendments introduced by the IASB related to the new Pillar 2 tax regulations approved by the OECD, the Group has decided to make use of the temporary exemption for the recognition of deferred tax assets and liabilities and the expense resulting from the calculation of the minimum tax rate of 15%. **Note 19** contains detailed information on the above tax standard and the analysis carried out by the Group during the year and its potential impact.\n\nCertain companies forming part of the Consolidated Group have reserves which could be taxable if distributed, since certain legislation envisages withholdings at source that affect the payment of dividends. The Group recognises the tax effect in this connection whenever it considers that the reserves will have to be distributed in the foreseeable future, which will give rise to the reversal of the temporary difference. That is to say, the parent shall not recognise a deferred tax liability when it considers that such reserves will not be distributed in the foreseeable future. The Group shall also reverse the temporary difference, against profit or loss for the year, when legislative changes eliminate or reduce the tax liability relating to those reserves.\n\nThe Company has been taxed under the consolidated tax regime since 1998. As agreed by the shareholders at the Annual General Meeting held on 28 May 2003, Acerinox, S.A. and certain of the subsidiaries with registered office in Spain form part of a consolidated tax group on an indefinite basis, with the exception of Metalinox Bilbao, S.A.U. and Inoxidables de Euskadi, S.A.U., which file tax returns separately. At 31 December 2023 and 2022, the consolidated tax group was made up of: Acerinox, S.A., Acerinox Europa, S.A.U., Roldan, S.A., Inoxfil, S.A., Inoxcenter, S.L.U. and Inoxcenter Canarias, S.A.U. As a result of the consolidated tax regime, reciprocal receivables and payables between Group companies arise, due to the offset of tax bases between them.\n\n#### **2.20 Revenue**\n\nRevenue is an increase in economic benefits during the year in the form of additions or increases in the value of assets or decreases in liabilities that result in an increase in equity and are not related to owners' contributions.\n\nRevenue depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognised when a customer obtains control of the good or service sold, i.e. when the customer has the ability to direct the use of, and obtain substantially all of the benefits from the good or service.\n\nThe Group takes into consideration the five-step model to determine when, and for what amounts, revenue should be recognised:\n\n- 1. Identify the contract(s) with a customer\n- 2. Identify the performance obligations in the contract\n- 3. Determine the transaction price\n- 4. Allocate the transaction price to the performance obligations in the contract\n- 5. Recognise revenue when (or as) the entity satisfies a performance obligation.\n\nA contract is an agreement between two or more parties that creates enforceable rights and obligations. A contract does not exist if each party to the contract has the unilateral enforceable right to terminate an unperformed contract without compensating the other party (or parties).\n\nThe main types of the Group's revenue and other income are as follows:\n\n#### **a) Sales and services**\n\nRevenue from the sale of goods is recognised in the consolidated statement of profit or loss when control of the goods is transferred to the buyer. No revenue is recognised if significant doubts exist in relation to the recovery of the amount owed or the possible return of the goods. Sales revenue is recognised at the transaction price, which is the amount of consideration to which the entity expects to be entitled in exchange for transferring the goods or services promised to a customer, excluding amounts collected on behalf of third parties.\n\nA contract is an agreement between two or more parties that creates enforceable rights and obligations. A contract does not exist if each party to the contract has the unilateral enforceable right to terminate a contract without compensating the other party (or parties). The stainless-steel sales process is performed through sales orders. From this perspective, the orders arranged by the Group with customers do not give rise to a right or obligation enforceable in advance, since the parties are entitled to unilaterally terminate an unperformed contract without compensating the other party until such time as the goods are delivered. Therefore, no obligation arises until the goods are delivered.\n\n{38}------------------------------------------------\n\nImage /page/38/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle that is open on the right side.\n\nDepending on the commercial terms and conditions of sale, the control and risk of the goods may be transferred when the materials are shipped from the Group's facilities or when they are delivered to the customer. The Group takes into account these terms and conditions of sale to determine the timing of revenue recognition. Revenue from the sale of goods is recognised in profit or loss when control over the goods is transferred to the buyer.\n\nThe Group considers all of the following factors when determining the transaction price:\n\n- variable consideration;\n- constraining estimates of variable consideration;\n- the existence of a significant financing component in the contract;\n- non-cash consideration; and\n- consideration payable to the customer.\n\nRevenue is recognised net of taxes, returns and discounts that the Group considers probable at the date the revenue is recognised, and after the elimination of intra-Group sales.\n\n#### **b) Lease income**\n\nLease income is recognised in profit or loss on a straight-line basis over the term of the lease.\n\n#### **c) Dividend income**\n\nDividend income is recognised when the right to receive it is established.\n\n#### **2.21 Environment**\n\nThe Group carries out actions the main objective of which is to prevent, reduce or repair the damage that might be caused to the environment as a result of its business activities.\n\nExpenses arising from environmental activities are recognised as expenses in the year in which they are incurred. However, the Group recognises environmental provisions, where necessary, by applying the general criteria detailed in **Note 2.17**.\n\nThe items of property, plant and equipment acquired to be used on a lasting basis in the Group's operations and the ultimate purpose of which is to minimise environmental impact and protect and improve the environment, including the reduction or elimination of pollution, are recognised as assets using measurement, presentation and disclosure criteria consistent with those discussed in **Note 2.8**.\n\n#### **2.22 Changes in accounting estimates and policies and correction of errors**\n\nThe Group applies IAS 8 to recognise changes in accounting estimates, changes in accounting policies and the correction of errors. In this regard, the Group recognises changes in accounting estimates in the year in which they occur. Accounting errors are corrected in the year in which they occurred, restating the comparative information presented in the consolidated financial statements, where the errors are material. Changes in policies are recognised retrospectively, adjusting the opening balances of each affected equity component, from the previous year presented, unless a specific transitional provision exists for the initial application of a standard or interpretation.\n\n#### <span id=\"page-38-0\"></span>**NOTE 3 – ACCOUNTING ESTIMATES AND JUDGEMENTS**\n\nIn preparing the consolidated financial statements, Group management is required to make certain judgements, estimates and assumptions that affect the application of the accounting policies and, therefore, the figures presented in these consolidated financial statements.\n\nThe accounting estimates and judgements are assessed on an ongoing basis and are based on historical experience and other factors, including expectations regarding future events that are considered to be reasonable. The Company may revise such estimates if changes were to occur in certain events or circumstances.\n\n{39}------------------------------------------------\n\nImage /page/39/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is positioned inside a crescent-shaped arc, also in dark blue, which partially encircles the text. The arc is thicker at the top and tapers towards the bottom, giving the impression of a stylized letter \"C\" or a partial circle.\n\nThe Group makes estimates and judgements regarding the future. The resulting accounting estimates may differ from the corresponding actual results. Changes in estimates are recognised in the Group's consolidated financial statements prospectively, as established in IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.\n\nThe main estimates made by the Group are as follows:\n\n#### **a) Impairment losses on goodwill and other non-financial assets**\n\nOnce a year, the Group tests goodwill for impairment, in accordance with the accounting policy detailed in **Note 2.11**.\n\nAt each reporting date the Group reviews whether there is any indication that its property, plant and equipment has become impaired, taking into account the criteria established in the policy. If any such indications exist, the entity estimates the recoverable amount of the asset in question. The recoverable amount of an asset is the higher of fair value less costs to sell and value in use.\n\nThe recoverable amounts of the cash-generating units in this year have been determined based on calculations of their value in use. Some estimates were made by an independent valuer.\n\nThe calculations of value in use are made using reasonable assumptions based on past returns and future market production and development expectations. Some of these assumptions relate to sales, margins, discount rates and perpetuity growth rates, which involve a high degree of judgement. In recent years, energy costs have also become more significant in the estimates, and the Group performs sensitivity analyses on possible changes in energy prices, mainly in European companies. **Notes 7.1** and **8.1** detail the analyses conducted by the Group in 2023 and 2022.\n\n#### **b) Fair value of derivatives and other financial instruments**\n\nThe Group acquires derivative financial instruments to hedge its exposure to exchange rate and interest rate fluctuations, as well as to fluctuations in certain raw material prices. The fair value of financial instruments not traded in active markets is determined using valuation techniques based mainly on market conditions existing at each reporting date, and provided that financial information is available to carry out this valuation. **Note 12.2.4** provides further information on the financial instruments measured on the basis of these assumptions.\n\n#### **c) Provisions**\n\nAs indicated in **Note 2.17**, the provisions recognised in the consolidated statement of financial position reflect the best estimate at the reporting date of the amount expected to be required to settle the obligation, provided that the materialisation of this outflow of resources is considered probable. Changes in envisaged circumstances could cause these estimates to vary, and they would be revised if necessary.\n\nIn the case of provisions arising from litigation in respect of which there are legal proceedings under way, the lawyers or independent experts determine the likelihood of occurrence of the events giving rise to the need to recognise a provision. In cases in which it is considered possible, although not probable, that an outflow of resources will occur or it is difficult to reliably determine the amount of the provision, the Group shall consider the provision to be a contingent liability and disclose the information in the notes (**Note 16**).\n\n#### **d) Net realisable value**\n\nAs mentioned in **Note 2.13**, the Group estimates the net realisable values of its inventories in order to recognise the appropriate valuation adjustments. The expected selling prices of the inventories less costs to sell are taken into account when determining the net realisable value.\n\n#### **e) Determination of employee benefit obligations**\n\nPension and similar obligations are determined on the basis of actuarial valuations which take into account statistical rates published by official bodies relating to future valuations such as expectations of salary increases, growth rates, mortality rates, discount rates, etc. These rates may vary significantly depending on economic and market conditions, which would cause variations in the obligations recognised in the financial statements. These assessments are carried out by independent experts.\n\nThe Group recognises in the consolidated statement of financial position the amounts arising from its employee benefit obligations, based on the actuarial valuations performed by independent experts.\n\n{40}------------------------------------------------\n\nImage /page/40/Picture/1 description: The image features the logo of Acerinox, a multinational steel manufacturing corporation. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial circle. The text and the circle are both rendered in a deep blue color. The circle is not fully closed, leaving a gap at the top. The overall design is simple and corporate, conveying a sense of stability and industrial strength.\n\n**Note 16.1** includes detailed information on the assumptions used in 2023 to perform the valuations.\n\n#### **f) Recoverability of tax loss and tax credit carryforwards**\n\nSeparately from tax legislation, which in many cases allows the recovery of tax losses without limitation, as established in the related accounting policy (**Note 2.19**), the Group recognises in the consolidated statement of financial position the deferred tax assets arising from tax loss and tax credit carryforwards, provided that they are recoverable over a reasonable period of time, which the Group has set at ten years. The Group regularly assesses the recoverability of available tax assets through earnings projections approved by management, to conclude as to whether they will be recoverable in the aforementioned reasonable period.\n\nThe Group takes into account the tax laws applicable to the determination of tax bases in the future, the restrictions on offsetting tax bases imposed by certain laws and the impact of minimum payments set in certain countries. **Note 19.3** includes detailed information on the Group's existing tax assets and the bases used to determine the recoverability of recognised tax assets.\n\n#### **g) Recognition of a deferred tax liability arising from investments in subsidiaries**\n\nAs established in the accounting policies (**Note 2.19**), certain companies forming part of the Consolidated Group have reserves which could be taxable if distributed, since certain legislation envisages withholdings at source that affect the payment of dividends, as well as limitations on the deductibility of gains from other countries distributed in the form of dividends. The Group recognises the tax effect in this connection provided that it considers that such reserves will have to be distributed in the foreseeable future. At the same time, the Group shall also reverse this temporary difference against profit or loss when new legislative changes eliminate or reduce the tax liability of these reserves.\n\nSince 2022, as a result of the entry into force in Spain of the amendment to income tax affecting the tax exemption for dividends received from Group companies, the aforementioned tax exemption for dividends received from qualifying ownership interests applicable to the parent of the Acerinox Group has been reduced to 95%, whereby it will be taxed on 5% of the dividends it receives from its subsidiaries, which will be treated as non-deductible expenses relating to management of the ownership interest. As with the distributable reserves mentioned in the previous paragraph, the Group also takes into account the tax effect if it believes that the distribution of reserves from subsidiaries will be required in the foreseeable future.\n\nAlthough there is no dividend distribution policy for subsidiaries, the Group analyses annually whether retained earnings of Group companies should be distributed to the parent company. The repatriation of dividends made in recent years guarantees the equity position of the parent company, meaning that management does not deem it necessary to distribute the reserves of its subsidiaries. Future repatriations of dividends are expected to be made based on the results obtained year by year. The Group does not therefore consider it necessary to recognise a deferred tax liability associated with such retained earnings.\n\n#### **h) Recognition of deferred tax liabilities under Pillar 2 standards**\n\nAs explained in accounting policies, in December 2021, the Organisation for Economic Co-operation and Development (\"OECD\") published the \"Pillar 2\" model standards for reforming international corporate taxation. The standard requires affected large multinational companies to calculate their effective GloBE (\"Global Anti-Base Erosion\") tax rate for each jurisdiction in which they operate. Such companies will be required to pay an additional tax on the difference between their effective GloBE tax rate per jurisdiction and the minimum rate of 15%. This standard has yet to be implemented in Spain, although it is mandatory for financial years beginning on or after 1 January 2024.\n\nWhile, as permitted by the amendment introduced by IAS 12, the Group has made use of the temporary exemption for the recognition and disclosure of deferred tax assets and liabilities related to income tax arising from Pillar 2, the Group is conducting an analysis based on the 2022 country-by-country report figures to determine the possible application of safe harbours, at least during the transitional period of 3 years foreseen by the rule. This would exempt it from calculating the minimum tax. From the analyses performed, no significant impact appears to arise from the application of this standard, as in the jurisdictions where the Group's main entities are located, effective taxes exceed the minimum payment of 15%.\n\n#### **NOTE 4 – FINANCIAL RISK MANAGEMENT**\n\nThe Group's activities, in both its stainless steel and special alloy divisions, are exposed to various financial risks: market risk (foreign currency risk, interest rate risk and price risk), credit risk, liquidity risk and climate risk. The Group aims to minimise the potential adverse effects on its financial profitability through the use of derivative financial instruments, where\n\n{41}------------------------------------------------\n\nImage /page/41/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right.\n\nappropriate to the risks, and by taking out insurance policies. **Note 12.2.6** includes a detailed analysis of the Group's derivative financial instruments at year-end.\n\nThe Group does not arrange financial instruments for speculative purposes.\n\n#### **4.1 Market risk**\n\nMarket risk arises from changes in market prices due to exchange rate or interest rate fluctuations or changes in prices of raw and other materials or supplies, which can affect the Company's earnings, its equity and the measurement of its assets and liabilities.\n\n#### **4.1.1 Foreign currency risk**\n\nThe Group operates internationally and in various currencies, particularly in the US dollar, and is therefore exposed to foreign currency risk. Foreign currency risk arises from commercial transactions as well as from financing and investment operations, and from the translation of financial statements the functional currencies of which is not the Consolidated Group's presentation currency (the euro).\n\nMonetary assets and liabilities denominated in foreign currencies are translated to the Group's functional currency at the reporting date at the exchange rates then prevailing. Any exchange differences that arise from such translation are recognised in the consolidated statement of profit or loss. To avoid fluctuations in the consolidated statement of profit or loss due to changes in exchange rates, and to ensure the expected cash flows, the Group uses derivative financial instruments to hedge most of its commercial and financial transactions performed in currencies other than the functional currency of each country. To this end, at the beginning of each month and subject to fortnightly review, each company considers its loans in non-local currency, the balances of its trade receivables and payables to suppliers in foreign currency, the sales and purchases in foreign currency forecast for that period and the currency forwards arranged. The Group may take commercial or financial transactions as a whole into account to evaluate its total exposure when hedging foreign currency transactions. The Group hedges balances with third parties and between Group companies.\n\nThe Group's business model is to hedge foreign currency risk through the use of derivative financial instruments and there is an economic relationship between the hedged item and the hedging instrument. The Group, mainly in its Stainless Steel Division, hedges cash flow risks for transactions performed in foreign currencies that are recognised in the consolidated statement of financial position; accordingly, any change in the derivative valuation is recognised in the consolidated statement of profit or loss and is offset by any changes that occur at each reporting date in the monetary items recognised in foreign currencies. The designation of these instruments as hedging instruments does not give rise to any accounting differences in the Group's consolidated statement of profit or loss. Consequently, in general, financial instruments designated to hedge foreign currency risk exposure arising from commercial transactions or transactions between Group companies are not treated for accounting purposes as hedging instruments. Instead, the Group categorises these instruments at fair value through profit or loss.\n\nIn the high-performance alloys division, as the manufacturing period is longer and orders are negotiated at a fixed price and much further in advance than in the stainless-steel division, hedging is performed immediately upon receipt of customer orders to ensure that the cash flow received matches the cash flow of the negotiations performed. The financial instruments arranged are valued at fair value through profit or loss.\n\nThe derivative financial instruments used by the Group to hedge this risk consist of foreign currency purchase and sale forward contracts in accordance with the policies approved by management.\n\nThe fair value of foreign currency forward contracts is equal to their market value at the reporting date, i.e. the present value of the difference between the current forward rate and the contract rate.\n\n**Note 12.2.6** details the financial instruments arranged by the Group to hedge this type of risk at 31 December 2023 and 2022.\n\nLastly, the Group is exposed to foreign currency risk as a result of the translation of the separate financial statements the functional currency of which differs from the Group's presentation currency, particularly the US dollar and the South African rand. The USD/EUR exchange rate at 2023 year-end was 1.1050, while at 2022 year-end it stood at 1.0666 (USD depreciation of 3.6% for the year). The exchange rate of the South African rand to the euro at 2023 year-end was 20.3477, while at 2022 year-end it was 18.0986 (rand depreciation of 12.4%).\n\nThe Group does not use financial instruments to hedge foreign investments, since these are strategic long-term investments.\n\n{42}------------------------------------------------\n\nImage /page/42/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that curves around the text. The text is in a dark color, contrasting with the white background, while the circle is a vibrant blue.\n\nNeither the Group's future profits nor the expected dividends are hedged, the latter only being hedged as soon as they are approved. **Note 14.4** includes a breakdown of the changes in translation difference items in the year.\n\nSensitivity to changes in these currencies with respect to the euro, with other variables remaining constant and based on the translation rates at the end of 2023 and 2022, respectively, was as follows:\n\n(Amounts in thousands of euros)\n\n|                  | Profit or loss   |                  | Equity           |                  |\n|------------------|------------------|------------------|------------------|------------------|\n|                  | 10% appreciation | 10% depreciation | 10% appreciation | 10% depreciation |\n| 31 December 2023 | 43,743           | -35,789          | 250,258          | -204,756         |\n| USD              |                  |                  |                  |                  |\n| ZAR              | -3,050           | 2,496            | 25,854           | -21,154          |\n| 31 December 2022 |                  |                  |                  |                  |\n| USD              | 55,321           | -45,263          | 237,048          | -193,948         |\n| ZAR              | 5,968            | -4,883           | 33,457           | -27,374          |\n\n#### **4.1.2 Interest rate risk**\n\nThe Group's financing comes from various countries and is provided in various currencies (mainly in the euro, the US dollar and the South African rand), with a range of maturity dates and with loans mostly tied to variable interest rates.\n\nThe Group's financial liabilities and financial assets are exposed to fluctuations in interest rates. To manage this risk, interest rate curves are analysed regularly and derivatives are occasionally used. These derivatives take the form of interest rate swaps which qualify for recognition for accounting purposes as cash flow hedging instruments. The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the reporting date, taking into account interest rates at that date and the credit risk associated with the swap counterparties.\n\nIn addition, the Group takes out fixed-rate loans to reduce its exposure to interest rate fluctuations. However, the Group did not take out any fixed-rate loans in 2023.\n\n70% of the Group's loans and private placements are at fixed interest rates (these figures include those loans closed at variable interest rates but hedged with an interest rate derivative).\n\nAs in 2022, the Group has continued to actively manage its loans during 2023. The majority of the Group's financing at 31 December 2023 corresponded to loans and private placements. Of these, almost 80% were due to mature in over a year.\n\n**Note 12.2.3** explains all new loan negotiations undertaken throughout the year.\n\nIn 2023, the Group has contracted five floating rate loans for a total amount of EUR 155 million, but has not contracted any interest rate derivatives to hedge against changes in the floating interest rate.\n\nThe last two years have been marked by interest rate increases. The rate hike that started in 2022 came to an end in the middle of this year. The last FED hike took place in July, reaching the highest level in 22 years (5.25%-5.5%). In Europe, increases slowed in September 2023, with the highest level since 2001 (4.5%).\n\nDue to the continued increase in interest rates and the high percentage of fixed-rate loans, the Group has decided not to contract new derivatives in 2023.\n\nThe risk to the Group from rising interest rates is limited, as the Group's net financial debt amounted to EUR 341 million, with bank borrowings of EUR 2,135 million and cash balances of EUR 1,794 million. Acerinox has currency deposits in US dollars. These USD deposits provide a remuneration that is higher than the remuneration of the euro interest rates to which most of the Group's variable interest rate loans are referenced, thereby mitigating the risk of an increase in interest rates.\n\nIn 2022, the Group did contract a derivative (Interest Rate Swap) with Caixabank for EUR 260 million.\n\n**Note 12.2.6** details the financial instruments arranged by the Group to hedge this type of risk at 31 December 2023 and 2022.\n\n{43}------------------------------------------------\n\nImage /page/43/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a slightly italicized style. The word is positioned inside a blue circle that is not fully closed, leaving a gap at the top right. The color of the text is the same blue as the circle.\n\nIn relation to the Group's interest rate sensitivity, had interest rates on its outstanding debt at year-end been 100 basis points higher, with all other variables remaining constant, the consolidated profit after tax would have been EUR 9.2 million lower (2022: EUR 7.2 million lower) due to higher borrowing costs on floating-rate debt not covered by interest rate swaps. The effect on the Group's equity of such an increase in interest rates across the entire interest rate curve would have been an increase of EUR 0.1 million (2022: an increase of EUR 5.3 million), since the higher borrowing costs would have been comfortably offset by increases in the values of its interest rate hedging derivatives held at the reporting date.\n\n#### **4.1.3 Price risk**\n\nThe Group is exposed to several types of price risk:\n\n#### **1. Risk due to energy price fluctuation**\n\nOver the last years, the high volatility in the price of supplies, principally gas and electricity, have acquired special relevance.\n\nAs the Group's factories are electro-intensive consumers of energy, these variations pose a risk due to the impact they have on the manufacturing costs of both stainless steel and high-performance alloys.\n\nThe steel sector requires an intensive use of energy to melt scrap and ferroalloys in electric furnaces to obtain molten material, as well as the use of fossil fuels such as natural gas in the heating and melting processes. Acerinox is therefore working to continuously improve its production processes, promoting innovation and the development of more efficient and cleaner technologies in steel production and supporting advances in less polluting and more sustainable processes.\n\nAlthough energy prices have fluctuated worldwide, they have been particularly relevant in Europe, which means a loss of competitiveness compared to other producing countries in the world. The Group has factories in Spain, Germany, the United States, South Africa and Malaysia.\n\nWhile energy prices in Europe are down this year from their peak levels in 2022, when they were primarily affected by Russia's invasion of Ukraine and international sanctions, they remain at very high levels compared to previous years. In the other countries where the Group has its factories, energy prices have risen by 20-25%. Gas prices, however, have fallen by around 60% in the United States and remained constant in South Africa.\n\nThe average price of electricity for the Group in Spain in 2023 is 30% higher than the costs of its factory in the United States and 20% higher than in South Africa. In the case of gas prices, the two plants have around 80% cheaper costs.\n\nIn 2023, the fall in gas and energy prices at the Campo de Gibraltar plant alone, which is most affected by cost volatility, meant a reduction of EUR 138 million compared to the previous year's prices. On the other hand, in 2022, the increase in prices compared to 2021 had a negative impact of EUR 136 million, only in that plant.\n\nThe Group seeks to mitigate the effects of volatile energy costs by improving the efficiency of energy consumption and by entering into PPAs (Power Purchase Agreements). As explained in the section on the Group's accounting policies, forward purchase contracts for energy are realised through the physical purchase of energy consumed by the Group in its stainlesssteel production facilities. They are therefore supply contracts for own use.\n\nThe objectives pursued by contracting PPAs are threefold:\n\n- Adequate hedging so that the final price is not so exposed to the fluctuations of the daily market\n- To fulfil the requirements of electricity-intensive consumers and those of indirect CO<sup>2</sup>\n- The consumption of green and/or renewable energy, as all of the Group's PPAs are linked to guarantees of origin\n\nOnly the Group's Spanish factories have this type of contract. The contracts signed, mainly by the Acerinox Europa factory, which has the largest volume of these contracts, guarantee 43% of Acerinox Europa's consumption until 2029, considering normal production levels. Acerinox has contracted an annual volume of 380.32 GWh until 2029.\n\nIn the area of high-performance alloys, the impact of energy price increases this year was limited by the hedging policy applied.\n\nDue to its electro-intensive nature, energy cost management is a strategic area for the Group and a constant element in excellence plans. The Group is constantly analysing alternative sources of supply in order to reduce costs.\n\n{44}------------------------------------------------\n\nImage /page/44/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that curves around the text. The text is in a dark color, contrasting with the white background, while the circle is a vibrant blue.\n\nReducing energy consumption is a key issue for Acerinox. Therefore, Acerinox has set a target of reducing the energy intensity of the stainless-steel division by 7.5% in 2030 compared to 2015 levels.\n\nDue to the impact of energy price fluctuations on the Group's costs, management has included this variable as a key assumption in valuations and forward estimates, particularly in Europe, and sensitivity analyses to energy price fluctuations are under way. A 10% fluctuation in the price of energy, both electricity and gas, compared to 2023 prices would have meant an upward or downward change in expenditure of around EUR 31 million, with all other variables remaining constant. The Group tries to pass these impacts on to sales prices, but as it is a competitive market with producers in different countries, this is not always possible.\n\nEmission allowances have remained at constant levels over the last two years at around EUR 80/allowance. The volatility of the price of allowances has hardly any impact on the stainless-steel division, given that the Spanish factories have enough free allowances allocated to them to cover their needs. As described in the accounting policy in **Note 2.13.1**, when the free allocation rights are consumed, income in the same amount is recognised at the same time as the expense is recognised and the corresponding part of the deferred income is reversed. Therefore, any increase in the price of rights allocated free of charge will be offset by income, thus not affecting the Group's income statement.\n\nIn the case of the high-performance alloys division, the free allocations obtained are lower than plant needs, meaning that rights have to be acquired on the market. In view of the significant price increase and future forecasts, the Group decided to implement a long-term purchase plan in 2021, acquiring 100% of the rights that it expects to use during 2022 and 2023, thus hedging against price fluctuations. This purchase was made at very competitive prices and below current quotations. The Group continues to systematically monitor price changes and take advantage of opportunities to meet its consumption needs.\n\n#### **2. Risk of changes in raw material prices**\n\nThe Group's exposure to raw material price fluctuations is different in the stainless-steel division than in the high performance alloys division, since, although both of the Group's divisions use metals listed on the London Metal Exchange as raw materials, the performance of demand and the way in which raw material price changes affect the markets are substantially different in each division.\n\n#### 2.1. **Raw materials used for the stainless-steel division**\n\nStainless steel is an alloy of iron, chromium ( $> 10.5%$ ) and carbon ( $< 1.2%$ ) to which other minerals such as nickel or molybdenum are added to give it certain properties. Nickel is one of the minerals that are present in all austenitic alloys, the most common on the market, in a variable percentage between 6 and 22%. Both nickel and molybdenum are listed on the London Metal Exchange and their prices are therefore subject to fluctuations in market prices.\n\nThe cost of raw materials accounts for about 70% of the total cost of the product, and of this, nickel accounts for about 50%. Therefore, nickel price volatility has a direct and significant effect on the cost of stainless steel. Consequently, the strategy in relation to setting selling prices and the repercussion of such fluctuations is one of the most critical functions and requires significant market knowledge. The price of nickel, because of its influence on the cost of stainless steel, ultimately determines the price of the final product, and there is a direct correlation between the two prices.\n\nHowever, stainless steel is a \"commodity\" product where consumers, belonging to different sectors such as metal traders, construction, engineering, automotive, kitchen appliances, industrial machinery, etc., value trust in some manufacturers more than others, but where the final price is ultimately the key to supplier selection.\n\nProducers try to pass on the volatility of raw materials in the price of the final product through a variable price mechanism called \"alloy surcharge\". The alloy surcharge is a mathematical formula, calculated on a monthly basis by each of the market's stainless-steel producers, that takes into account changes in the prices of certain raw materials (particularly nickel, chromium and molybdenum) and fluctuations in the EUR/USD exchange rate. The application of this alloy surcharge allows nickel price fluctuations on the London Metal Exchange to be passed on to customers during the order manufacturing phase, as well as fluctuations in the prices of other raw materials and in the EUR/USD exchange rate.\n\nWhile this mechanism is consistently followed in some markets such as the United States and South Africa, it does not work in the same way in Asia, where producers offer fixed prices at the time of negotiation. This has an impact on markets where imports are higher, such as in Europe, which sometimes prevents this pricing system from being passed on to the end customer.\n\nAs was the case from the second half of 2022 onwards, in 2023, the mitigating effect of the alloy surcharge on the risk of price changes performed differently in the United States and in Europe. While in the North American market the alloy\n\n{45}------------------------------------------------\n\nImage /page/45/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the word. The circle is not complete, but rather a thick arc that starts and ends near the top of the word.\n\nsurcharge is always respected and is a factor of price stability, in Europe the traditional system of base price and alloy surcharge has been partially replaced by an effective pricing system due to import pressure.\n\nOver the course of the year, demand remained at a very low level due to excess stainless-steel inventories in the supply chain and geopolitical instability, keeping prices under pressure throughout the year and reaching unprecedented record lows.\n\nHowever, in the United States, where the Group has a significant market share, the Group's strategy of containing supply in order to maintain prices has been very effective and has enabled the Group to contain fluctuations in base prices.\n\nThe downward trend in the price of nickel persisted over the period, beginning in 2023 above USD 31,000/t and ending at a price near USD 16,500. One of the main reasons for this sharp fall was the increased availability of all nickel sources. The gradual increase in stocks on the London and Shanghai metal exchanges also contributed to maintaining this downward trend in the price.\n\nThe Group aims to minimise the impact of fluctuating raw material prices by keeping low inventory levels across the production chain, along with applying an alloy surcharge mechanism.\n\nDue to all the variables involved in the price mechanism and the influence of the markets, determining the Group's sensitivity to price volatility in the stainless-steel division is very difficult.\n\n#### 2.2. **Raw materials used for the high-performance alloys division**\n\nThe high-performance alloys division involves alloys whose content of listed metals such as nickel is much higher than that of stainless steel, reaching up to almost 100% in certain alloys. In addition, they may also contain other metals such as copper, cobalt, aluminium and molybdenum. The metal content in this type of alloys accounts for 2/3 of the total cost of the product and the selling price of these alloys is up to 10 times higher than that of stainless steel. The manufacturing period lasts around three to four months and, accordingly, the Group must purchase metals several months before they are sold.\n\nDue to the percentage of metals in the total cost of the product and the associated price volatility, customers in this sector always demand fixed prices, which the Group guarantees when orders are received, initially assuming the full risk of raw material volatility. To mitigate this risk, the Group has a metals trading department in this division, which is responsible for entering into derivatives on the LME (London Metal Exchange) to hedge the metal purchases required to manufacture the products demanded by customers. In the case of metals not listed on the LME, natural hedges through physical stock are undertaken.\n\nIn order to avoid the volatility caused by the valuation of these derivatives in the income statement, following the incorporation of the High Performance Alloys division into the Group, it was decided to carry out an analysis of the economic model and hedging relationships in order to assess the possible application of hedge accounting to these derivatives. At 1 January 2021, hedging relationships for new derivatives entered into from that date were documented and a model to ensure hedge effectiveness was implemented, so the Group started to apply hedge accounting for the recognition of a large number of these financial instruments. **Note 12.2.6** includes detailed information on these instruments.\n\nA 20% increase in the price of listed metals, which the Group hedges through forward purchases and sales, would currently have an impact on the valuation of derivatives of EUR 19 million, which would have a direct impact on other comprehensive income (equity). On the other hand, a 20% drop in the price of these metals would have a negative impact of EUR -19 million on the Group's equity.\n\n#### 2.3. **Risk of price distortion due to the accumulation of stock in the market**\n\nThe stainless-steel market is characterised by robust demand, which has grown at an annual rate of approximately 6% for over 50 years. The demand for stainless steel for all industrial applications and its presence in all industries guarantee that this growth rate will be sustained in the coming years. Although end consumption continues to grow steadily, the fact that this market is largely controlled by independent wholesalers leads to volatility in apparent consumption, based on their expectations regarding nickel price trends on the London Metal Exchange (LME) and their resulting stockpiling or inventory realisation strategies.\n\nFluctuations in the price of nickel also affect consumer demand. Reductions in the price of nickel tend to go hand in hand with short-term drops in demand. Conversely, a rise in nickel prices tends to go hand in hand with higher demand. To lessen the risk associated with the predominant market control held by independent stockists, the Group's strategic approach involves emphasising direct sales to end customers rather than relying on stockists. The Group's commercial network allows for the distribution of products to end customers via warehouses and service centres, facilitating sales stability and mitigating this risk.\n\n{46}------------------------------------------------\n\nImage /page/46/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a white circle. A blue crescent shape partially surrounds the white circle, creating a border effect.\n\n#### 2.4. **Risk of overvaluation of inventories**\n\nThe convenience of maintaining sufficient inventory levels at the Group's warehouses entails the risk that these inventories might be overvalued with respect to their market price. The Group mitigates this risk by keeping strict control of its inventory levels.\n\nThe valuation of raw materials, work in progress and finished goods at average cost also helps to reduce the volatility of costs and, therefore, the impact of nickel price fluctuations on margins.\n\nDuring the year, an adjustment of inventories to net realisable value of EUR 65 million was necessary due to the continued fall in prices.\n\n#### **4.1.4 The impact of Russia's invasion of Ukraine**\n\nAlthough the conflict between the two countries has continued throughout the year, it has not had a significant impact on the Group. Energy prices have corrected from the levels reached at the beginning of the conflict, which has allowed the Group to reduce its costs, as explained in the section on energy price risk.\n\nAs far as the Group's business was concerned, from the moment the war started, its exposure in Russia was reduced to a minimum and sales were halted. The Group is currently in the process of closing its commercial office in that country.\n\nWith regard to purchasing, the Group has very diversified sources of supply of raw materials and follows a strategy of responsible purchasing. Significant efforts were made since the beginning of the conflict to secure alternative supplies, which made it possible for the Group not to be dependent on Russian raw materials.\n\nDue to the uncertainties that existed at the outbreak of the war regarding Germany's dependence on gas supplies from Russia, the Group set up a monitoring committee to assess the impact of possible measures in that country and to mitigate the consequences. Ultimately, the country acted swiftly to seek alternative sources from other countries and none of the initially expected risks materialised.\n\nManagement considers that the impact this conflict could have on future projections is not significant.\n\n#### **4.2 Credit risk**\n\nCredit risk is defined as the possible loss that could be incurred through failure of a customer or debtor to meet contractual obligations.\n\nThe Group's exposure to credit risk is determined by the individual characteristics of each customer and, where applicable, by the risk inherent to the country in which the customer operates. Due to the diversity of its customers and the countries in which the Group operates, credit risk is not concentrated in any individual customer, sector or geographical region. None of the Group's customers, whether in the stainless steel or the high- performance alloys division, account for more than 10% of the Group's total sales.\n\nThe Group hedges its commercial and political risks either through credit insurance companies, or through letters of credit and bank guarantees extended by banks of recognised solvency located in countries with low financial risk. Credit insurance hedges between 90% and 95% of declared commercial risks, depending on the country in which the customer is located and the insurance company, and between 90% and 95% of political risks. The Group's main credit insurer has an A1 credit rating from Moody's and an A (excellent) rating from A.M. Best.\n\nIn 2023, payouts of EUR 351 thousand were collected under the credit insurance policy (2022: EUR 742 thousand).\n\nA Risk Committee is responsible for monitoring the Group's credit risk policy. New customers are analysed in conjunction with the insurance company, which assigns a covered amount, enabling the Group to offer its general payment terms to those that fulfil the required credit conditions. Where required, the Risk Committee also performs a case-by-case analysis of customers' creditworthiness, setting internal risk limits and payment terms. Otherwise, payment in cash is required.\n\nThe Risk Committee consists of representatives from the sales, financial and legal departments. The risks of the companies that make up the Acerinox Group are analysed and information is, in turn, received from the Delegated Risk Committees of\n\n{47}------------------------------------------------\n\nImage /page/47/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters. The text is positioned inside a blue circle.\n\nNorth American Stainless, Bahru Stainless, Columbus, Grupinox (which represents the sales network in Spain) and VDM Metals.\n\nAmong other duties, the Risk Committee reviews the status of past-due debts, monitors sales with excessive exposure and authorises the transfer of internal risk or, depending on the amount, requests approval from the Management Committee. The Group has a formalised credit risk policy that ensures the control of credit risk in the trading companies by defining various internal risk levels, which must be approved by the responsible persons named in the policy.\n\nThe Group has long-standing commercial relationships with many of its customers. Delays in payment result in specific monitoring of future deliveries, payment terms and the review of credit limits.\n\nWhere permitted under local legislation in the country in which the customer operates, retention of title clauses may exist, to secure recovery of goods in the event of default.\n\nThe Group occasionally uses other financial instruments to reduce credit risk, such as factoring operations. The Group derecognises factored financial assets when the risks and rewards of these assets have been substantially transferred.\n\nThe Group makes the valuation adjustments to trade receivables it deems necessary based on an expected credit loss model which analyses the average credit losses at each of the subsidiaries and the claims incurred on the credit insurance policies taken out, as detailed in **Note 2.12.2**.\n\n**Note 12.2.1** details the changes in valuation adjustments to trade receivables.\n\nThe consolidated balance of trade receivables at 31 December 2023 was EUR 560,002 thousand (2022: EUR 575,036 thousand), and revenue in 2023 amounted to EUR 6,607,978 thousand (2022: EUR 8,688,494 thousand). This represented an average collection period of 31 days at the Group (2022: 24 days).\n\nCredit risk insurance was taken out for 53% of consolidated net sales (2022: 51%). Cash conditions existed for 4% of sales (2022: 3%). Confirmed letters of credit or guarantees were used to hedge credit risk in 1% of consolidated net sales (2022: 1%). Domestic sales by North American Stainless Inc., which entail a very low risk due to the collection period of under 30 days, accounted for 37% of consolidated net sales (2022: 41%), allowing deliveries to be controlled and reducing potential impairment losses.\n\nThe analysis of the age of the receivables is as follows:\n\n(Amounts in thousands of euros)\n\n| 2023                      | %<br>receivables | 2022 | %<br>receivables |      |\n|---------------------------|------------------|------|------------------|------|\n| Not past due              | 453,770          | 81 % | 479,565          | 83 % |\n| Less than 30 days         | 89,062           | 16 % | 75,550           | 13 % |\n| Between 30 and 60<br>days | 10,985           | 2 %  | 13,282           | 2 %  |\n| Between 60 and 90<br>days | 2,028            | 0 %  | 1,554            | 0 %  |\n| More than 90 days         | 4,157            | 1 %  | 5,085            | 1 %  |\n| TOTAL                     | 560,002          |      | 575,036          |      |\n\nThe Group has made provisions for EUR 4,107 thousand (2022: 4,868 thousand of euros). A provision was made for EUR 543 thousand in 2023 (2022: EUR 864 thousand), accounting for 0.008% of sales 2023 (2022: 0.010%); the Group's expected credit loss ratio is 0.018% (2022: 0.019%).\n\nMost of the past-due receivables are insured and generally reflect customary delays in trading activity (84% of past-due receivables are aged less than 30 days). At 16 February 2024, over 85% of the aforementioned past-due balances had been collected (2022: 90%).\n\nIn view of the default rates in all industries, the Group considers that the above figures are highly satisfactory and confirm the success of its commercial risk policy.\n\n{48}------------------------------------------------\n\nImage /page/48/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, stacked on top of a blue circle that is open at the top.\n\nIn short, neither the accident rate nor payment delays are higher than in any other year, even against the backdrop of geopolitical uncertainty. The Group does not expect significant impacts in the future in view of the risk coverage policy in place and the high percentage of risks covered.\n\nAny advances to non-current asset suppliers are hedged through bank guarantees issued by the supplier and confirmed by banks of recognised solvency.\n\nIn relation to the credit risk of bank balances, as a general rule only banks and financial institutions that are rated by an independent third party with an \"investment grade\" credit rating are accepted. The Group has no significant concentration of risk, as the likelihood of default by the banks and financial institutions thus authorised is remote, based on their high credit ratings.\n\n#### **4.3 Liquidity risk**\n\nLiquidity risk is the risk of not being able to meet present and future obligations, not having the funds required to perform the Group's activities.\n\nThe Group is primarily financed through the cash flows arising from its operations, in addition to loans and financing facilities.\n\nDuring the year, the Company has maintained good access to liquidity through long-term loans and financing facilities in excess of the amounts needed at any given time.\n\nThe Group's cash resources are centrally managed in order to optimise resources. The Group's debt is primarily concentrated within the parent of the Group (more than 65% of total gross debt at year-end).\n\nBased on its cash flow estimates and considering its investment plans, the Group has sufficient funding to meet its obligations, and maintains a sufficient level of undrawn credit facilities, as well as high levels of liquidity, to hedge liquidity risk.\n\nIn 2023 and 2022, no defaults occurred on the principal or interest of the Group's various financing facilities.\n\nAt year-end the Group had access to short- and long-term financing facilities totalling EUR 2,807 million and approved nonrecourse factoring facilities amounting to EUR 530 million. The amount drawn down on the financing facilities at 31 December 2023 amounted to EUR 2,135 million and EUR 297 million on the factoring facilities. In 2022, the short- and long-term financing facilities available to the Group amounted to EUR 2,786 million, and non-recourse factoring facilities amounted to EUR 480 million, while the drawdowns against the financing facilities amounted to EUR 1,989 million and drawdowns against the factoring facilities amounted to EUR 329 million. At 31 December 2023, cash and cash equivalents amounted to EUR 1,794 million (2022: EUR 1,548 million).\n\nCash and cash equivalent balances are available and there is no restriction on their use.\n\nThe Group makes short-term cash placements –never exceeding six months– and only at banks of recognised solvency.\n\nIn addition, the Group continuously monitors the maturity profile of its financial debt in order to establish the longest possible annual maturities.\n\nIn this regard, the most notable financing operations in 2023 were as follows:\n\n- Renewal of syndicated factoring in Spain until 2026, increasing the maximum amount to EUR 380 million and including a new transferor (VDM Metals International)\n- Renewal of the Columbus Borrowing Base Facility in South Africa until 2027 for a total maximum amount of ZAR 3,500 million\n- Renewal and extension of credit facilities up to a total amount of EUR 301 million and USD 135 million\n- Signing of five new long-term loans with various financial institutions for a total amount of EUR 155 million in Spain\n- 1.5 year extension of the loan signed by VDM with Intesa Sanpaolo for EUR 30 million\n- Extension of an additional year (until 2025) of the bilateral financing facilities signed with VDM with 5 financial institutions for a total amount of EUR 210 million\n\n{49}------------------------------------------------\n\nImage /page/49/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle surrounds the word, creating a clear and recognizable brand mark.\n\n• Increase in Bahru's short-term financing facilities (credit facilities and revolving credit facilities) to a maximum of USD 145 million\n\nThese financing transactions are explained in **Note 12.2.3**.\n\nThe most noteworthy financing transactions in 2022 were as follows:\n\n- Renewal and extension of credit facilities up to a total amount of EUR 301 million and USD 135 million\n- Novations of existing loans with extension of amounts up to EUR 320 million and with extension of maturities\n- Signing of five new long-term loans with various financial institutions for a total amount of EUR 145 million\n- Refinancing of VDM for a total amount of EUR 340 million, through a long-term loan of EUR 50 million and seven bilateral financing facilities for an aggregate amount of EUR 290 million\n- Increase in lines for the issuance of import letters of credit by more than EUR 100 million\n\nThe analysis of the Group's payment obligations at the end of 2023 is as follows:\n\n(Amounts in thousands of euros)\n\n|                                               |                         | 2023                                   |                       |                |           |           |                            |                          |  |\n|-----------------------------------------------|-------------------------|----------------------------------------|-----------------------|----------------|-----------|-----------|----------------------------|--------------------------|--|\n|                                               |                         | Future cash flow maturities (payments) |                       |                |           |           |                            |                          |  |\n|                                               | Amount at<br>31/12/2023 | Amount of<br>future<br>payments        | Less than 6<br>months | 6-12<br>months | 1-2 years | 2-5 years | More<br>than<br>5<br>years | Undetermined<br>maturity |  |\n| Non-current<br>payables                       | 1,291,156               | -1,391,921                             | -26,001               | -25,440        | -546,936  | -786,170  | -7,374                     |                          |  |\n| Current<br>payables                           | 843,731                 | -878,118                               | -114,296              | -763,822       |           |           |                            |                          |  |\n| Payable to<br>suppliers and<br>other payables | 916,472                 | -916,472                               | -916,472              |                |           |           |                            |                          |  |\n| Other non<br>current financial<br>liabilities | 19,799                  | -19,799                                |                       |                | -10,181   | -2,660    | -1,614                     | -5,344                   |  |\n| FINANCIAL<br>DERIVATIVES                      |                         |                                        |                       |                |           |           |                            |                          |  |\n| Hedges through<br>interest rate<br>swaps      | -21,358                 | 21,998                                 | 7,235                 | 5,314          | 5,381     | 4,068     |                            |                          |  |\n| Commodity<br>derivatives -<br>purchases       | 11,998                  | -11,998                                | -7,764                | -2,935         | -1,291    | -8        |                            |                          |  |\n| Commodity<br>derivatives -<br>sales           | -4,455                  | 4,455                                  | 328                   | 4,127          |           |           |                            |                          |  |\n| Currency<br>forwards against<br>exports       | -2,158                  | -2,158                                 | -2,158                |                |           |           |                            |                          |  |\n| Currency<br>forwards against<br>imports       | 4,860                   | 4,860                                  | 4,860                 |                |           |           |                            |                          |  |\n| TOTAL                                         | 3,060,045               | -3,189,153                             | -1,054,268            | -782,756       | -553,027  | -784,770  | -8,988                     | -5,344                   |  |\n\nThe balances of \"payable to suppliers and other payables\" do not include payables to Public Administrations. All the maturities of the debt with suppliers are short-term.\n\n\"Other non-current financial liabilities\", which are categorised as liabilities with an indefinite maturity, mainly relate to deposits and guarantees that have no specific maturity date or for which the date of repayment is unknown. The remainder are leasing payments.\n\nFuture cash flow maturities include the principal plus interest based on contractual interest rates at year-end.\n\nApproved investments not recognised under property, plant and equipment under construction at the reporting date are not included.\n\n{50}------------------------------------------------\n\nImage /page/50/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned within a blue circle that is open at the top and bottom, creating a crescent shape around the word.\n\n#### **4.4. Climate risk**\n\nStainless steel is a sustainable and durable material, and one which is highly resistant and infinitely recyclable. Despite these positive qualities, the steel sector accounts for a considerable proportion of global industrial emissions. This phenomenon is due to the intensive use of energy needed to melt scrap and ferro-alloys in electric furnaces in order to obtain molten material, as well as to the use of fossil fuels, such as natural gas, in the heating and melting processes. Reducing emissions in the steel industry is essential to mitigate climate change and meet global targets.\n\nAcerinox is aware of the risks it faces that stem from climate change. The company pays special attention to environmental protection and the efficient use of natural resources in the development of its activities.\n\nAcerinox is committed to decarbonising its operations through the implementation of the Positive Impact 360º Sustainability Master Plan. This plan includes eco-efficiency and climate change mitigation as core components and aims to reduce the intensity of greenhouse gas emissions (Scope 1 and 2) by 20% by 2030, with 2015 as the reference year.\n\nThe Group has also introduced a sustainability and climate change policy supported by complementary policies that define its commitments to mitigate climate change.\n\nAcerinox's model for managing climate change follows the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and includes information on governance, strategy, risk management and opportunities, as well as metrics and targets. Acerinox understands that business management is linked to a commitment to sustainability which takes the form of the specific, ambitious and measurable objectives that are set out in the company's Sustainability Plan.\n\nThe Board of Directors is ultimately responsible for the Group's climate change management through the sustainability and audit committees within their spheres of influence.\n\nThe Group's climate risk management is integrated into corporate risk management.\n\nClimate risks are overseen by the Audit Committee of the Board of Directors, as part of its function of overseeing the comprehensive risk control system. Likewise, climate risks are examined in the Sustainability Committee, which is also part of the Board of Directors.\n\nIn order to strengthen risk management, a physical and transition risk analysis was conducted in 2023 following the TCFD methodology. The study considered the impact that climate change would have on each of the Group's facilities over two time horizons, 2030 and 2050, and under two climate scenarios. Details are included in the Non-Financial Information Statement.\n\nThe Company has joined the UN Global Compact's Climate Ambition Accelerator initiative in Spain. It is a programme to guide companies in setting quantifiable emission reduction targets based on science and developing concrete plans to achieve them. Through this initiative, it is hoped that Spanish companies, including Acerinox, will become leaders in climate change mitigation.\n\nAcerinox defines its commitment to climate change mitigation through four key principles:\n\n- **Improving energy efficiency:** through initiatives such as heat recovery boilers, use of autonomous electric vehicles (AGVs), etc.\n- **Increased use of renewable energy:** by contracting PPAs and purchasing renewable energy certificates and by installing solar panels for self-consumption in our own facilities.\n- **Use of sustainable fuels:** the feasibility of replacing natural gas consumption with other carbon-neutral fuels, such as biomethane or green hydrogen, is analysed.\n- **Carbon capture, use and storage:** studies on the technical and economic feasibility of capturing part of the CO<sup>2</sup> produced in factories.\n\nIn addition, during 2023, the company worked on the development of the new efficiency plan, \"Beyond Excellence\", for the next three years, 2024-2026. The Plan was approved by the Board of Directors at the close of 2023 and comprises six key components, with a focus on productivity and automation, efficiency, decarbonisation and environmental initiatives.\n\nThe Company is striving to make progress in decarbonising its business model. Acerinox is working to reduce the amount of CO<sup>2</sup> released into the atmosphere and other polluting gases associated with the iron and steel process to achieve a significant improvement in air quality and reduce the impact on human health and neighbouring ecosystems. To achieve these goals, the Group has short- and medium-term initiatives divided into the following key focus areas:\n\n{51}------------------------------------------------\n\nImage /page/51/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue, crescent-shaped graphic. The crescent appears to be a partial circle, open on the right side, and is thicker than the text.\n\n- Improving energy efficiency through best available techniques.\n- Promotion of heat recovery systems from process sources.\n- Electrification of systems and vehicle fleet.\n- Increased use of renewable energies and, in particular, renewable electricity.\n- Use of alternative low-carbon fuels (e.g. green hydrogen).\n- Increased use of scrap metal.\n- Increased use of low-carbon raw materials.\n- CO<sup>2</sup> capture, storage and use.\n- Boosting digitalisation to improve energy control and management.\n\nThese measures are aligned with the Sustainability Plan's climate change targets for 2030, compared to 2015. Sustainability officers at each factory monitor them every month, alongside the corporate sustainability team. The progress of the objectives is reviewed quarterly by the Sustainability Committee, and appropriate actions are taken in each instance.\n\nAcerinox established sustainability objectives linked to its environmental, social, and corporate governance performance, aligned with its Positive Impact 360º Sustainability Master Plan and the main international standards (Paris Agreement, Sustainable Development Goals, etc.). The monitoring of climate change related targets is shown below:\n\n**1. GHG (Greenhouse Gas) emissions target:** to reduce the direct and indirect carbon emissions intensity (Scopes 1 and 2) of its stainless division by 20% by 2030 compared to 2015 levels. The Acerinox Group is committed to reducing its carbon footprint.\n\nAt the end of the year, Acerinox had reduced its emissions intensity by 3% compared to 2022, and by 11% compared to the base year of 2015 (2% increase in 2022 compared to 2021 and 8% reduction compared to the base year).\n\n**2. Energy Efficiency Target:** to reduce the energy intensity of the stainless-steel division by 7.5% by 2030 compared to 2015 levels.\n\nDuring the year, Acerinox increased its energy intensity by 6% compared to 2022 and by 8% compared to the base 2015 year.\n\nIn the last two years, the combined effect of the increase in imports, especially in 2022, the high inventories in the distribution chain and the energy crisis, exacerbated by the invasion of Ukraine, has led to a decline in stainless steel production. This decrease worsened the indicator of energy intensity per tonne of steel produced, although the total volume of emissions decreased due to the increased use of renewable energy. Acerinox has increased its renewable energy contracts and has certificates for 616,880 MWh (2022: 284,750 MWh), a 117% increase compared to the previous year.\n\n**3. Waste reduction target:** 90% waste recycled in 2030.\n\nDuring the year, Acerinox reached 80% of recycled waste, 1% higher than in 2022.\n\n**4. Water consumption:** 20% reduction in freshwater consumption intensity by 2030 compared to the 2015 baseline.\n\nDuring the year 2023, Acerinox reduced water consumption by 3% vs the previous year, a reduction of 18% over the base year of 2015.\n\nThe impact of climate risk on financial statements are both wide-ranging and potentially complex and will depend on sectorspecific risks. When analysing future business estimates, probability scenarios are presented in which not only the physical consequences of climate change are assessed, but also the changes in environmental regulations to deal with it. These are the so-called physical risks and transitional risks of climate change, with both having economic and financial consequences.\n\nThe impact of climate risk on the Group's financial statements is structured into three main areas: analysis of the recoverability of non-financial assets, determination of the useful lives of plants and equipment and credit ratings.\n\nWith regard to recoverability analyses of non-financial assets, the Group has incorporated climate risk in the estimates, making the corresponding forward-looking judgments. The growth rates used and discount and risk rates are market ratios that also implicitly reflect the valuation of climate risk. These rates do not differ significantly from those applied in previous years. Due to the nature of the business, we feel that there is no material impact from climate change risk that would indicate impairment for any of the Group's CGUs or their inventories.\n\n{52}------------------------------------------------\n\nImage /page/52/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle that is open on the left side.\n\nRegarding the determination of useful lives set out in **Note 3**, Group management determines the estimated useful lives and related depreciation charges of its plant and equipment based on valuations carried out by experts, taking into account technical innovations, variations in the activity levels of the plants, regulatory changes etc. Management periodically reviews the depreciation charge, which is modified whenever the estimated useful lives are different from the lives previously applied. The recurrent maintenance plans and investment proposals carried out by the factories take into account efficiency objectives and adaptation to new technologies, thus contributing to climate change.\n\nWith regard to credit ratings and the limitation that regulations impose on financial institutions to provide financing to unsustainable companies, the European Commission has published its classification of sustainable finance, which serves as a tool to help financial agents and companies define which activities are considered as such. The EU Taxonomy provides a universal definition of the environmental sustainability of economic activities at European level and contributes to the dissemination of consistent and transparent information on how companies are progressing in line with EU-wide transition plans and contributing to the EU's environmental objectives. In accordance with the provisions of the Regulation, companies subject to the presentation of their Non-Financial Information Statement must include in their directors' reports information related to the degree of sustainability of their activities. In particular, non-financial companies must disclose the proportion of turnover, capital expenditure and operating expenditure (capex and opex) that complies with the Taxonomy Regulation. Implementation is being phased in progressively.\n\nThe first exercise carried out in 2022 was to identify the potential activities that could be considered sustainable (eligibility) based on the above indicators. In 2023, an assessment has been made of the technical criteria provided for in the Regulation, which will determine the alignment of activities with the Taxonomy.\n\nIn terms of eligibility criteria, stainless-steel fabrication has been considered, according to the taxonomy regulation, as a potentially sustainable (eligible) activity.\n\nThe activity, in addition to being eligible, must demonstrate that it meets the requirements of Article 3 of the Regulation which, in summary, are:\n\n- Substantial contribution to one or more of the six EU environmental objectives.\n- It does not cause significant harm to the other environmental objectives (Do No Significant Harm -DNSH-).\n- It complies with the minimum social safeguards.\n\nSo far, the technical criteria of substantial contribution to Objectives 1 and 2 (climate change mitigation and adaptation) contained in Annex I and II of the Climate Delegated Regulation have been adopted. In the case of stainless steel, these technical criteria only apply to electric arc installations and set specific thresholds for the carbon intensity indicator per tonne of product and the percentage of scrap used.\n\nThe Group has published in its non-financial information report revenue, capex and opex indicators based on alignment criteria, which determine the proportion of each of these items coming from products or services related to economic activities that are considered aligned.\n\nAt year-end, there are six sustainable financing facilities with an outstanding amount of EUR 647.4 million. These loans tie the financing cost to the performance of two established indicators that are reviewed annually. The first four sustainable loans signed in 2020 and 2021 have a KPI linked to the annual reduction in CO2e emission intensity (Scope 1 + 2) and the other indicator is linked to the annual reduction of the accidents with leave frequency rate. The last sustainable loan signed at the end of 2021 and novated in June 2022 retains the first KPI linked to CO2e emissions (Scope 1 + 2) and replaces the KPI for accidents with leave with a KPI that measures the increase in renewable energy intensity. The latest sustainable financing facility was signed in 2022 by VDM, where the margin is dependent on the VDM Group's rating issued by Ecovadis. Failure to meet the two KPIs would result in a very marginal increase in the cost of these financing facilities, but in no case would it result in the early maturity of these.\n\n**Note 8** details the fixed assets whose purpose is the minimisation of environmental impact and the protection and improvement of the environment, as well as the environmental expenses incurred by the Group.\n\n#### **4.5 Capital management**\n\nThe aims of the capital management policy are:\n\n- to safeguard the Group's capacity to continue its sustained growth;\n- to provide sufficient returns to shareholders; and\n- to maintain an optimal capital structure.\n\n{53}------------------------------------------------\n\nImage /page/53/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif, uppercase letters. The word is positioned inside a blue circle that is open at the top.\n\nThe Company manages its capital structure and makes adjustments to it based on changes in economic circumstances. To maintain and adjust the capital structure, the Company can adopt various policies relating to the payment of dividends, the reimbursement of the issue premium, share repurchases, self-financing of investments, non-current borrowings, etc.\n\nCapital structure is controlled using various ratios, such as the net financial debt/EBITDA ratio, understood to be the period necessary for the resources generated by the Company to cover the level of debt; or the gearing ratio, i.e. the relationship between the net financial debt and equity of the Company.\n\nNet financial debt is taken to be the sum of current and non-current bank borrowings, plus bonds issued, less cash and cash equivalents. EBITDA reflects profit or loss from operations, less depreciation and amortisation, changes in operating provisions and allowances, and impairment losses recognised in the year.\n\nThe \"net financial debt/EBITDA\" ratio is 0.49x (2022: 0.35x), which is very satisfactory in our sector.\n\nOne of the Group's strategic pillars is the maintenance of its financial strength, which is defined as sustainable cash generation over time in order to utilise capital efficiently and generate shareholder value. Cash generation continues to be one of the primary objectives. In 2023, despite the lower results achieved by management to reduce the Group's working capital, particularly inventories, an operating cash flow of EUR 481 million was generated (2022: EUR 544 million). Working capital has been reduced this year by EUR 79 million (2022: increased by EUR 479 million due to strong business activity and higher raw material prices).\n\nFollowing investment payments of EUR 175 million (2022: EUR 126 million), generated free cash flow amounted to EUR 307 million (2022: EUR 419 million).\n\nIn 2023, the Company invested EUR 150 million in shareholder remuneration, representing a payout of 66% (payout calculated as dividend paid/net profit attributable to the Group).\n\nA cash payment of EUR 0.6 per share has been made in 2023. In accordance with Acerinox's Dividend Policy, the total shareholder remuneration is maintained, so that the reduction in the number of shares as a result of the last share buyback plan results in a higher payment per share. The Board of Directors of Acerinox, S.A., held on 20 December 2023, has agreed to propose to the Shareholders' Meeting the payment of a dividend of EUR 0.62 per share, i.e. an increase of 3.33% over the last approved dividend, of which EUR 0.31 gross per share were payable in cash on 26 January 2024.\n\nDuring the year, Acerinox, S.A.'s share capital has been reduced, as approved by the Annual General Meeting held on 23 May 2023, through the amortisation of 10,388,974 treasury shares with a value of EUR 2,597 thousand. The purpose of this reduction of share capital is to increase the value of the shareholders' stake in the Company.\n\nThe Group's net financial debt decreased by EUR 99 million to EUR 341 million (2022: EUR 440 million).\n\nThe gearing ratio stood at 13.85%, a 25-year low.\n\nReturn on Capital Employed (ROCE) in 2023 was 13.34% (2022: 29.3%). The adjusted ROCE, without taking into account the asset impairment would be 17.9%, exceeding the Group's target of 15%, as explained in **Note 8.1**. ROCE is calculated by dividing the operating result (EBIT) in the consolidated statement of profit or loss by the capital employed, i.e. equity plus net financial debt.\n\nAs of 31 December 2023, the Acerinox Group had liquidity amounting to EUR 2,465 million. Of this, EUR 1,794 million corresponds to cash and cash equivalents and short-term deposits and EUR 672 million to available financing at various Group subsidiaries.\n\nThe Group continuously monitors the maturity profile of its financial debt in order to establish the longest possible annual maturities. As explained in both Notes 4.3 and 12.2.3, the Group has continued with the active management of its financing facilities by contracting, renewing and/or extending them.\n\nAt year-end, the Group's outstanding sustainable financing amounted to EUR 647.4 million. The majority of the Group's financing at 31 December 2023 corresponded to loans and private placements. Of these, almost 80% were due to mature in over a year. In addition, 70% of the Group's loans and private placements are at fixed interest rates (these figures include those loans closed at variable interest rates but hedged with an interest rate derivative).\n\n{54}------------------------------------------------\n\nImage /page/54/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is in a dark blue color. The text is positioned inside a dark blue circle that is open at the top.\n\n#### **4.6 Insurance**\n\nThe geographical diversification of the Group's factories (with three integrated stainless-steel flat product manufacturing plants, one cold-rolling plant and three long product manufacturing plants) ensures that an accident would not affect more than one third of total stainless-steel production. This guarantees business continuity, while adequate coordination between the other factories mitigates the consequences of material damage to any of the facilities. The high-performance alloys division also has seven manufacturing plants, five in Germany and two in the United States, which also helps to reduce the consequences of an incident at one of them.\n\nSufficient coverage has been arranged for the Group's factories through material damage and loss-of-profit insurance policies, which account for over 66.67% of the Acerinox Group's insurance expenditure. Also, all assets under construction are covered by the insurance policies taken out by the respective suppliers as well as the global building and assembly policy.\n\nThe Group's adequate coverage of damages and loss of profit has enabled it to record an income in 2023 as a result of the incident at the Group's North American factory in 2022.\n\nThe Acerinox Group has also arranged general third-party liability, environmental, credit, transport, cyber-risks and group life and accident insurance policies to reduce its exposure to these various risks.\n\nThe Group also has a reinsurance company based in Luxembourg (Inox Re), which manages these risks by assuming a portion as self-insurance and accessing the reinsurance market directly.\n\n#### <span id=\"page-54-0\"></span>**NOTE 5 – SCOPE OF CONSOLIDATION**\n\n#### **5.1 Business combinations**\n\nThere were no business combinations in 2022 or 2023.\n\n#### **5.2 Changes in the scope of consolidation**\n\nThere were no changes in the Group's scope of consolidation in either 2022 or 2023.\n\nThe Group is making the final arrangements for the liquidation of the trading company in Russia. The subsidiary currently has no activities and no employees. The share capital contributed by Acerinox, S.A. amounts to EUR 101 thousand. During the year, EUR 202 thousand were repatriated from this company to the parent company. The Group expects to complete all formalities before the first quarter of 2024.\n\n#### **5.3 Subsidiaries and associates**\n\n#### **Subsidiaries**\n\nAt 31 December 2023 and 2022, in addition to Acerinox, S.A., the scope of consolidation of the Acerinox Group included 55 fully consolidated subsidiaries.\n\nThe detail of investments in associates in 2023 is as follows:\n\n| 2023                                                                     |                                 |                                     |                       |                                                                              |                                                       |\n|--------------------------------------------------------------------------|---------------------------------|-------------------------------------|-----------------------|------------------------------------------------------------------------------|-------------------------------------------------------|\n| OWNERSHIP                                                                |                                 |                                     |                       |                                                                              |                                                       |\n| FULLY CONSOLIDATED COMPANIES                                             | COUNTRY                         | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n| ACERINOX (SCHWEIZ) A.G.                                                  | Mellingen - Switzerland         | 327                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX ARGENTINA S.A.                                                  | Buenos Aires - Argentina        | 598                                 | 90%                   | ACERINOX, S.A.                                                               | Estudio Canil                                         |\n|                                                                          |                                 | 13                                  | 10%                   | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| ACERINOX AUSTRALASIA PTY. LTD.                                           | Sidney - Australia              | 385                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX BENELUX S.A. - N.V.                                             | Brussels - Belgium              | 209                                 | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                 | 0                                   | 0.02%                 | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| FULLY CONSOLIDATED COMPANIES                                             | COUNTRY                         | COST (in thousands of euros)*       | % NOMINAL VALUE       | HOLDER OF OWNERSHIP INTEREST                                                 | AUDITORS                                              |\n| ACX DO BRASIL REPRESENTAÇOES, LTDA.                                      | São Paulo - Brazil              | 373                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX CHILE, S.A.                                                     | Santiago de Chile - Chile       | 7,545                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX COLOMBIA S.A.S.                                                 | Bogotá D.C. - Colombia          | 68                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX DEUTSCHLAND GMBH                                                | Langenfeld - Germany            | 45,496                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX EUROPA, S.A.U.                                                  | Algeciras - Spain               | 274,234                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX FRANCE S.A.S                                                    | Paris - France                  | 18,060                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                 | 0                                   | 0.02%                 | INOXIDABLES DE EUSKADI S.A.U.                                                |                                                       |\n| ACERINOX INDIA PVT LTD.                                                  | Mumbai - India                  | 155                                 | 100%                  | ACERINOX, S.A.                                                               | ISK & Associates                                      |\n| ACERINOX ITALIA S.R.L.                                                   | Milan - Italy                   | 78,844                              | 100%                  | ACERINOX, S.A.                                                               | Collegio Sindicale -<br>Studio Revisori<br>Associatti |\n| ACERINOX METAL SANAYII VE TICARET L.S.                                   | Gümüşsuyu / Beyoğlu -<br>Turkey | 150                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX MIDDLE EAST DMCC (DUBAI)                                        | Dubai - United Arab<br>Emirates | 10                                  | 100%                  | ACERINOX, S.A.                                                               | HLB Hamt                                              |\n| ACERINOX PACIFIC LTD.                                                    | Wan Chai - Hong Kong            | 7,467                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX POLSKA, SP. ZO.O.                                               | Warsaw - Poland                 | 25,174                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                 | 4                                   | 0.02%                 | INOXIDABLES DE EUSKADI S.A.U.                                                |                                                       |\n| ACERINOX RUSSIA LLC                                                      | Saint Petersburg - Russia       | 100                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX SCANDINAVIA AB                                                  | Malmö - Sweden                  | 31,909                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX S.C. MALAYSIA SDN. BHD                                          | Johor - Malaysia                | 19,476                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX SHANGAI CO., LTD.                                               | Shanghai - China                | 1,620                               | 100%                  | ACERINOX, S.A.                                                               | Shanghai Shenzhou<br>Dalong                           |\n| ACERINOX (SEA), PTE LTD.                                                 | Singapore - Singapore           | 193                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX U.K, LTD.                                                       | Birmingham - United<br>Kingdom  | 28,504                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACEROL - COMÉRCIO E INDÚSTRIA DE AÇOS<br>INOXIDÁVEIS, UNIPESSOAL, LDA.   | Trofa - Portugal                | 15,828                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| BAHRU STAINLESS, SDN. BHD                                                | Johor - Malaysia                | 0                                   | 99%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| COLUMBUS STAINLESS (PTY) LTD.                                            | Middelburg - South Africa       | 241,470                             | 76%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| CORPORACIÓN ACERINOX PERU S.A.C.                                         | Lima - Peru                     | 314                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| INOX RE, S.A.                                                            | Luxembourg                      | 1,225                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXCENTER CANARIAS, S.A.U.                                              | Telde (Gran Canaria) -<br>Spain | 270                                 | 100%                  | INOXCENTER                                                                   | PWC                                                   |\n| INOXCENTER, S.L.U.                                                       | Barcelona - Spain               | 17,758                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXFIL, S.A.                                                            | Igualada (Barcelona) - Spain    | 6,247                               | 100%                  | ROLDAN, S.A.                                                                 | PWC                                                   |\n| INOXIDABLES DE EUSKADI S.A.U.                                            | Vitoria - Spain                 | 2,705                               | 100%                  | ACERINOX EUROPA,<br>S.A.U.                                                   | PWC                                                   |\n| INOXPLATE - COMÉRCIO DE PRODUCTOS DE AÇO<br>INOXIDÁVEL, UNIPESSOAL, LDA. | Trofa - Portugal                | 9,693                               | 100%                  | ACEROL - COMÉRCIO<br>E INDÚSTRIA DE<br>AÇOS INOXIDÁVEIS,<br>UNIPESSOAL, LDA. |                                                       |\n| METALINOX BILBAO, S.A.U.                                                 | Galdácano (Vizcaya) - Spain     | 3,718                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS INC.                                            | Kentucky - USA                  | 546,271                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS CANADA, INC                                     | Canada                          | 5,091                               | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS MEXICO S.A. DE<br>C.V.                          | Apodaca - N.L.Mexico            | 18,948                              | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS FINANCIAL<br>INVESTMENTS LTD.                   | Kentucky - USA                  | 15                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ROLDAN, S.A.                                                             | Ponferrada - Spain              | 17,405                              | 99.77%                | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS HOLDING GMBH                                                  | Werdohl - Germany               | 313,315                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS INTERNATIONAL GMBH.                                           | Werdohl - Germany               | 51,404                              | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM METALS GMBH                                                          | Werdohl - Germany               | 107,086                             | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM (SHANGHAI) HIGH PERFORMANCE METALS<br>TRAD. CO. LTD.                 | Shanghai - China                | 200                                 | 100%                  | VDM METALS, GMBH.                                                            | Pan-China Certified<br>Public Accounts                |\n| VDM HIGH PERFORMANCE METALS NANTONG<br>CO. LTD.                          | Nantong - China                 | 2,087                               | 100%                  | VDM METALS<br>INTERNATIONAL<br>GMBH.                                         | Pan-China Certified<br>Public Accounts                |\n| VDM METALS AUSTRALIA PTY. LTD.                                           | Mulgrave - Australia            | 1,322                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS AUSTRIA G.M.B.H.                                              | Brunn am Gebirge - Austria      | 4,515                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS BENELUX B.V.                                                  | Zwijndrecht - Belgium           | 2,535                               | 100%                  | VDM METALS, GMBH.                                                            | BDO                                                   |\n| VDM METALS CANADA LTD.                                                   | Vaughan - Canada                | 336                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS DE MEXICO S.A. DE C.V.                                        | Naucalpan de Juarez -<br>Mexico | 30                                  | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS FRANCE S.A.S.                                                 | Saint-Priest - France           | 8,465                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM UNTERSTÜTZUNGSKASSE GMBH                                             | Werdohl - Germany               | 0                                   | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS ITALIA S.R.L.                                                 | Sesto San Giovanni - Italy      | 10,704                              | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS JAPAN K.K.                                                    | Tokyo - Japan                   | 178                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| FULLY CONSOLIDATED COMPANIES                                             | COUNTRY                         | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n| VDM METALS KOREA CO. LTD.                                                | Seoul - Korea                   | 103                                 | 100%                  | VDM METALS, GMBH.                                                            | Samdo                                                 |\n| VDM METALS UK LTD.                                                       | Claygate-Esher - UK             | 100                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS USA LLC                                                       | Florham Park - USA              | 27,649                              | 100%                  | VDM METALS, GMBH.                                                            | PWC                                                   |\n\n{55}------------------------------------------------\n\nImage /page/55/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The word is positioned inside a blue circle. The circle is not fully closed, with a small gap at the top.\n\n{56}------------------------------------------------\n\nImage /page/56/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark color. The word is positioned inside a blue circle that is open on the left side.\n\n*(\\*) Amounts are shown net of impairments*\n\nThe activities of the Group companies are as follows:\n\n- Acerinox, S.A.: is the parent company of the Acerinox Group and holds directly or indirectly the shares of the companies comprising the Group. As the parent company of the Group, it assumes the highest level of management and control over the Group's business operations, corporate functions, and overall coordination with other entities. It approves and supervises the strategic business areas. It is responsible for establishing, designing and developing the Group's policies and financial strategy, designing investment and environmental policies, defining the R&D strategy, supervising the management services provided to subsidiaries and developing corporate governance policies. It also provides a range of corporate services, including legal, accounting and advisory services to all Group companies.\n- Acerinox Europa, S.A.U.: manufacture and marketing of flat stainless-steel products.\n- North American Stainless, Inc.: manufacture and marketing of flat and long stainless-steel products.\n- Columbus Stainless (Pty) Ltd.: manufacture and commercialisation of flat stainless-steel products and carbon steel.\n- Bahru Stainless, Sdn. Bhd.: cold rolling and marketing of flat stainless-steel products.\n- Roldan, S.A.: manufacture and marketing of long stainless-steel products.\n- Inoxfil, S.A.: manufacture and marketing of stainless-steel wire.\n- VDM Holding Metals GmbH: is the holding company of the group of companies comprising the High Performance Alloys business unit.\n- VDM Metals International GmbH, a company wholly owned by VDM Holding Metals GmbH, procures the raw materials required for the production of the High Performance Alloys, markets the finished products and centralises the VDM Group's research and development by directly managing and administering the business and outsourcing production to another entity from the subgroup. The company also has a quality assurance department.\n- VDM Metals GmbH, the owner of the production facilities, processes raw materials into high-performance alloys on behalf of VDM Metals GmbH.\n- Inox Re, S.A.: reinsurance company.\n- Inoxplate, Comercio de productos de Aço Inoxidávei, Unipessoal Lda: owner of the industrial building in which the Group company in Portugal -Acerol, Comércio e indústria de Aços inoxidáveis- carries out its operating activities, for the lease of which it receives income.\n- North American Stainless Financial Investment, Inc.: provision of foreign trade advisory services.\n- The rest of the companies, which are direct or indirect investees of Acerinox, S.A., as well as the VDM subgroup entities, engage in the marketing of stainless-steel products or high-performance alloys.\n\nThe detail of investments in associates in 2022 is as follows:\n\n| FULLY CONSOLIDATED<br>COMPANIES                                          | COUNTRY                                             | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n|--------------------------------------------------------------------------|-----------------------------------------------------|-------------------------------------|-----------------------|------------------------------------------------------------------------------|-------------------------------------------------------|\n| ACERINOX (SCHWEIZ) A.G.                                                  | Mellingen - Switzerland<br>Buenos Aires - Argentina | 327<br>598                          | 100%<br>90%           | ACERINOX, S.A.<br>ACERINOX, S.A.                                             | PWC<br>Estudio Canil                                  |\n| ACERINOX ARGENTINA S.A.                                                  | Buenos Aires - Argentina                            | 13                                  | 10%                   | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| ACERINOX AUSTRALASIA PTY. LTD.                                           | Sidney - Australia                                  | 385                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX BENELUX S.A. - N.V.                                             | Brussels - Belgium                                  | 209<br>0                            | 99.98%<br>0.02%       | ACERINOX, S.A.<br>INOXIDABLES DE<br>EUSKADI S.A.U.                           | PWC                                                   |\n| ACX DO BRASIL REPRESENTAÇOES, LTDA.                                      | São Paulo - Brazil                                  | 373<br>0                            | 100%<br>0%            | ACERINOX, S.A.<br>INOXIDABLES DE<br>EUSKADI S.A.U.                           |                                                       |\n| ACERINOX CHILE, S.A.                                                     | Santiago de Chile - Chile                           | 7,545                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX COLOMBIA S.A.S.                                                 | Bogotá D.C. - Colombia                              | 68                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX DEUTSCHLAND GMBH                                                | Langenfeld - Germany                                | 45,496                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX EUROPA, S.A.U.                                                  | Algeciras - Spain                                   | 341,437                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| 2022                                                                     |                                                     |                                     |                       |                                                                              |                                                       |\n| FULLY CONSOLIDATED<br>COMPANIES                                          | COUNTRY                                             | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST                                           | AUDITORS                                              |\n| ACERINOX FRANCE S.A.S                                                    | Paris - France                                      | 18,060                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX INDIA PVT LTD.                                                  | Mumbai - India                                      | 155                                 | 100%                  | ACERINOX, S.A.                                                               | ISK & Associates                                      |\n| ACERINOX ITALIA S.R.L.                                                   | Milan - Italy                                       | 78,844                              | 100%                  | ACERINOX, S.A.                                                               | Collegio Sindicale -<br>Studio Revisori<br>Associatti |\n| ACERINOX METAL SANAYII VE TICARET L.S.                                   | Gümüşsuyu / Beyoğlu -<br>Turkey                     | 150                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n|                                                                          |                                                     | 10                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ACERINOX PACIFIC LTD.                                                    | Wan Chai - Hong Kong                                | 7,467                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX POLSKA, SP. ZO.O.                                               | Warsaw - Poland                                     | 25,174                              | 99.98%                | ACERINOX, S.A.                                                               | PWC                                                   |\n|                                                                          |                                                     | 4                                   | 0.02%                 | INOXIDABLES DE<br>EUSKADI S.A.U.                                             |                                                       |\n| ACERINOX RUSSIA LLC                                                      | Saint Petersburg - Russia                           | 100                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX SCANDINAVIA AB                                                  | Malmö - Sweden                                      | 31,909                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX S.C. MALAYSIA SDN. BHD                                          | Johor - Malaysia                                    | 19,476                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX SHANGAI CO., LTD.                                               | Shanghai - China                                    | 1,620                               | 100%                  | ACERINOX, S.A.                                                               | Shanghai Shenzhou<br>Dalong                           |\n| ACERINOX (SEA), PTE LTD.                                                 | Singapore - Singapore                               | 193                                 | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACERINOX U.K, LTD.                                                       | Birmingham - United<br>Kingdom                      | 28,494                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| ACEROL - COMÉRCIO E INDÚSTRIA DE AÇOS<br>INOXIDÁVEIS, UNIPESSOAL, LDA.   | Trofa - Portugal                                    | 15,828                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| BAHRU STAINLESS, SDN. BHD                                                | Johor - Malaysia                                    | 96,480                              | 99%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| COLUMBUS STAINLESS (PTY) LTD.                                            | Middelburg - South Africa                           | 263,558                             | 76%                   | ACERINOX, S.A.                                                               | PWC                                                   |\n| CORPORACIÓN ACERINOX PERU S.A.C.                                         | Lima - Peru                                         | 314                                 | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| INOX RE, S.A.                                                            | Luxembourg                                          | 1,225                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXCENTER CANARIAS, S.A.U.                                              | Telde (Gran Canaria) -<br>Spain                     | 270                                 | 100%                  | INOXCENTER                                                                   | PWC                                                   |\n| INOXCENTER, S.L.U.                                                       | Barcelona - Spain                                   | 17,758                              | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| INOXFIL, S.A.                                                            | Igualada (Barcelona) - Spain                        | 6,247                               | 100%                  | ROLDAN, S.A.                                                                 | PWC                                                   |\n| INOXIDABLES DE EUSKADI S.A.U.                                            | Vitoria - Spain                                     | 2,705                               | 100%                  | ACERINOX EUROPA,<br>S.A.U.                                                   | PWC                                                   |\n| INOXPLATE - COMÉRCIO DE PRODUCTOS DE AÇO<br>INOXIDÁVEL, UNIPESSOAL, LDA. | Trofa - Portugal                                    | 10,193                              | 100%                  | ACEROL - COMÉRCIO<br>E INDÚSTRIA DE<br>AÇOS INOXIDÁVEIS,<br>UNIPESSOAL, LDA. |                                                       |\n| METALINOX BILBAO, S.A.U.                                                 | Galdácano (Vizcaya) - Spain                         | 3,718                               | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS INC.                                            | Kentucky - USA                                      | 546,042                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| NORTH AMERICAN STAINLESS CANADA, INC                                     | Canada                                              | 5,091                               | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS MEXICO S.A. DE<br>C.V.                          | Apodaca - N.L.Mexico                                | 18,948                              | 100%                  | NORTH AMERICAN<br>STAINLESS INC.                                             | PWC                                                   |\n| NORTH AMERICAN STAINLESS FINANCIAL<br>INVESTMENTS LTD.                   | Kentucky - USA                                      | 15                                  | 100%                  | ACERINOX, S.A.                                                               |                                                       |\n| ROLDAN, S.A.                                                             | Ponferrada - Spain                                  | 17,405                              | 99.77%                | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS HOLDING GMBH                                                  | Werdohl - Germany                                   | 313,315                             | 100%                  | ACERINOX, S.A.                                                               | PWC                                                   |\n| VDM METALS INTERNATIONAL GMBH.                                           | Werdohl - Germany                                   | 51,404                              | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM METALS GMBH                                                          | Werdohl - Germany                                   | 102,037                             | 100%                  | VDM METALS<br>HOLDING, GMBH.                                                 | PWC                                                   |\n| VDM (SHANGHAI) HIGH PERFORMANCE METALS<br>TRAD. CO. LTD.                 | Shanghai - China                                    | 200                                 | 100%                  | VDM METALS, GMBH.                                                            | Pan-China Certified<br>Public Accounts                |\n| VDM HIGH PERFORMANCE METALS NANTONG<br>CO. LTD.                          | Nantong - China                                     | 2,087                               | 100%                  | VDM METALS<br>INTERNATIONAL<br>GMBH.                                         | Pan-China Certified<br>Public Accounts                |\n| VDM METALS AUSTRALIA PTY. LTD.                                           | Mulgrave - Australia                                | 1,322                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS AUSTRIA G.M.B.H.                                              | Brunn am Gebirge - Austria                          | 4,515                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS BENELUX B.V.                                                  | Zwijndrecht - Belgium                               | 2,535                               | 100%                  | VDM METALS, GMBH.                                                            | BDO                                                   |\n| VDM METALS CANADA LTD.                                                   | Vaughan - Canada                                    | 336                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS DE MEXICO S.A. DE C.V.                                        | Naucalpan de Juarez -<br>Mexico                     | 30                                  | 100%                  | VDM METALS, GMBH.                                                            | Grant Thornton                                        |\n| VDM METALS FRANCE S.A.S.                                                 | Saint-Priest - France                               | 8,465                               | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM UNTERSTÜTZUNGSKASSE GMBH                                             | Werdohl - Germany                                   | 0                                   | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS ITALIA S.R.L.                                                 | Sesto San Giovanni - Italy                          | 10,704                              | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS JAPAN K.K.                                                    | Tokyo - Japan                                       | 178                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS KOREA CO. LTD.                                                | Seoul - Korea                                       | 103                                 | 100%                  | VDM METALS, GMBH.                                                            |                                                       |\n| VDM METALS UK LTD.                                                       | Claygate-Esher - UK                                 | 100                                 | 100%                  | VDM METALS, GMBH.                                                            | BDO                                                   |\n| VDM METALS USA LLC                                                       | Florham Park - USA                                  | 27,649                              | 100%                  | VDM METALS, GMBH.                                                            | PWC                                                   |\n\n**2022**\n\n{57}------------------------------------------------\n\nImage /page/57/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the top right.\n\n#### **2022**\n\n{58}------------------------------------------------\n\nImage /page/58/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters slightly blurred. The word is positioned inside a blue circle that is open on the left side. The circle is thicker at the top and bottom and thinner on the sides.\n\n|                                 | 2022      |                                     |                       |                                    |          |\n|---------------------------------|-----------|-------------------------------------|-----------------------|------------------------------------|----------|\n|                                 | OWNERSHIP |                                     |                       |                                    |          |\n| FULLY CONSOLIDATED<br>COMPANIES | COUNTRY   | COST (in<br>thousands of<br>euros)* | %<br>NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST | AUDITORS |\n|                                 |           |                                     |                       |                                    |          |\n\n*(\\*) Amounts are shown net of impairments*\n\n#### **Associates**\n\nThe detail of investments in associates in 2023 and 2022 is as follows:\n\n| ASSOCIATES                                    | COUNTR<br>Y | COST (in thousands<br>of euros) | % NOMINAL<br>VALUE | HOLDER OF<br>OWNERSHIP<br>INTEREST |\n|-----------------------------------------------|-------------|---------------------------------|--------------------|------------------------------------|\n| BETINOKS PASLANMAZ ÇELIK A.S.                 | Turkey      | 0                               | 25%                | ACERINOX, S.A.                     |\n| MOL Katalysatortechnik GmbH                   | Germany     | 16                              | 20.45%             | VDM METALS, GMBH.                  |\n| Evidal Schmöle Verwaltungsgesellschaft<br>mbH | Germany     | 15                              | 50%                | VDM METALS, GMBH.                  |\n\nThe associates are entities which are scantly material for the Group, the ownership interests in which are measured at cost, as the Group is not involved in their management and therefore, does not have their financial statements. The entity Betinoks Paslanmaz Celik, A.S., based in Turkey, is in the process of liquidation. MOL Katalysatortechnik, GmbH, based in Germany, engages in the production and distribution of mineral and metal catalysts. On the other hand, Evidal Schmöle Verwaltungsgesellschaft GmbH manages the pension funds of one of the former manufacturing companies.\n\n#### **5.4 Capital increases and reductions**\n\nIn 2023, as in 2022, the Group company Inoxplate, Lda, based in Portugal and wholly owned by the Portuguese company Acerol, Ltda, made a repayment of additional contributions to its parent company in the amount of EUR 500 thousand (2022: EUR 500 thousand).\n\n#### **5.5 Impairment losses on investments**\n\nAt the end of each reporting period, the parent company performs impairment tests on those investments in Group companies for which there are indications of possible impairment, in order to verify whether the valuations of the respective companies exceed their recoverable amount.\n\nFollowing the tests carried out during the year, as explained in Note 8.1, it was necessary to recognise impairment of the portfolio investment in Bahru Stainless Sdn. Bhd for EUR 96,553 thousand, in Columbus for EUR 22,200 thousand and in Acerinox Europa for EUR 67,245 thousand.\n\nAlso, in 2022, the Group recorded an impairment of the investment in Bahru Stainless Sdn. Bhd in the amount of EUR 197,197 thousand. On the other hand, there has been a reversal of the impairment recorded in previous years in the company Columbus Stainless Pty. Ltd. in the amount of EUR 58,291 thousand, as the recoverable value of the investment was higher than the impairment recorded at year-end.\n\nThese impairments or reversals do not have an impact on consolidated profit or loss as these companies are fully consolidated. A detailed breakdown of the analyses conducted is included in the notes to the parent's separate financial statements.\n\n{59}------------------------------------------------\n\nImage /page/59/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is enclosed within a blue circle.\n\n#### <span id=\"page-59-0\"></span>**NOTE 6 – SEGMENT REPORTING**\n\nThe Group is organised internally by operating segments, the strategic business units, which are made up of different products and services that are managed separately, so that Group management reviews internal reports for each of these segments at least monthly.\n\nThe operating segments presented by the Group, associated with the types of products it sells, are as follows:\n\n- Stainless steel: includes both flat and long stainless-steel products.\n- High-performance alloys: special alloys with high nickel content. This segment includes all the companies in the VDM Metals subgroup.\n\nSegment results, assets and liabilities include all items directly or indirectly attributable to a segment. There are no significant assets used jointly.\n\nThe \"unallocated\" segment includes the activities of the holding company that cannot be allocated to any of the specific operating segments. As described in **Note 1**, the main activity of the holding company, the parent company of the Acerinox Group, is to approve and oversee the strategic businesses. It also provides a range of corporate and advisory services in various areas and manages and administers the Group's financing, which is centralised through Acerinox, S.A.\n\nThe result of the \"unallocated\" segment reflects hardly any revenues as these, in the parent company, are always with Group companies and have therefore been eliminated in the consolidation process. The financial costs of this segment are the highest, due to the centralisation of financing mentioned above.\n\nRevenue and all items reflected in the statement of profit or loss by segment are presented on a consolidated basis, i.e. after eliminating income and expenses from Group companies, except for sales between segments, which are reflected separately.\n\nInter-segment transfers and transactions are performed on an arm's length basis, under commercial terms and conditions that would be available for unrelated third parties.\n\nA segment's performance is measured on the basis of its gross profit from operations and net profit before tax. The Group considers that this information is the most relevant when assessing the performance of the segment in relation to other comparables in the industry.\n\n{60}------------------------------------------------\n\n#### **6.1 Operational segments**\n\nSegment results for the year ended 31 December 2023 are as follows:\n\n(Amounts in thousands of euros)\n\n|                                                             | 2023               |                               |             |             |                   |  |\n|-------------------------------------------------------------|--------------------|-------------------------------|-------------|-------------|-------------------|--|\n|                                                             | Stainless<br>steel | High<br>performance<br>alloys | Unallocated | Adjustments | Total             |  |\n| Statement of profit or loss                                 |                    |                               |             |             |                   |  |\n| Revenue                                                     | 5,279,638          | 1,445,669                     | 2,031       |             | -19,337 6,708,001 |  |\n| Inter-segment sales                                         | -18,589            | -748                          |             | 19,337      | 0                 |  |\n| Total revenue                                               | 5,261,049          | 1,444,921                     | 2,031       |             | 0 6,708,001       |  |\n| Gross profit from operations                                | 569,900            | 174,797                       | -43,207     |             | 701,490           |  |\n| Depreciation and amortisation charge                        | -137,565           | -32,796                       | -769        |             | -171,130          |  |\n| Impairment losses                                           | -156,207           |                               |             |             | -156,207          |  |\n| Finance income                                              | 78,359             | 1,027                         | 260         |             | 79,646            |  |\n| Finance costs                                               | -39,296            | -29,947                       | -31,801     |             | -101,044          |  |\n| Exchange differences                                        | 3,433              | -1,211                        | 368         |             | 2,590             |  |\n| Impairment and loss on disposal of financial<br>instruments |                    |                               |             |             | 0                 |  |\n| Profit (loss) before tax                                    | 318,624            | 111,870                       | -75,149     | 0           | 355,345           |  |\n| Income tax                                                  | -94,369            | -38,786                       | -5,223      |             | -138,378          |  |\n| Consolidated profit (loss) for the year                     | 224,255            | 73,084                        | -80,372     | 0           | 216,967           |  |\n| Attributable to:                                            |                    |                               |             |             |                   |  |\n| Non-controlling interests                                   | -11,161            |                               |             |             | -11,161           |  |\n| Net profit (loss) attributable to the Group                 | 235,416            | 73,084                        | -80,372     | 0           | 228,128           |  |\n| Statement of financial position                             |                    |                               |             |             |                   |  |\n| Segment assets                                              | 4,848,248          | 1,170,936                     | 79,195      |             | 6,098,379         |  |\n| Investments accounted for using the equity<br>method        |                    | 390                           |             |             | 390               |  |\n| Property, plant and equipment                               | 1,220,955          | 250,176                       | 10,436      |             | 1,481,567         |  |\n| Total consolidated assets                                   | 4,848,248          | 1,171,326                     | 79,195      |             | 0 6,098,769       |  |\n| Segment liabilities                                         | 1,355,914          | 746,503                       | 1,533,226   |             | 3,635,643         |  |\n| Unallocated liabilities                                     |                    |                               |             |             |                   |  |\n| Total consolidated liabilities (excluding<br>equity)        | 1,355,914          | 746,503                       | 1,533,226   |             | 0 3,635,643       |  |\n| Property, plant and equipment                               | 1,220,955          | 250,176                       | 10,436      |             | 0 1,481,567       |  |\n| Investments in non-current assets                           | 146,286            | 27,233                        | 1,266       | 0           | 174,785           |  |\n\nUnallocated liabilities essentially comprise the financial debt, which is mainly centralised in the parent company.\n\n{61}------------------------------------------------\n\nImage /page/61/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue, semi-circular shape that resembles a crescent moon or a partial ring. The text is aligned horizontally, with the letters closely spaced. The blue color of the text matches the color of the semi-circular shape.\n\n#### The data for 2022 are as follows:\n\n(Amounts in thousands of euros)\n\n|                                                             | 2022            |                            |             |             |           |\n|-------------------------------------------------------------|-----------------|----------------------------|-------------|-------------|-----------|\n|                                                             | Stainless steel | High-performance<br>alloys | Unallocated | Adjustments | Total     |\n| Statement of profit or loss                                 |                 |                            |             |             |           |\n| Revenue                                                     | 7,477,172       | 1,280,405                  | 2,853       | -3,540      | 8,756,890 |\n| Inter-segment sales                                         | -2,508          | -1,032                     |             | 3,540       |           |\n| Total revenue                                               | 7,474,664       | 1,279,373                  | 2,853       | 0           | 8,756,890 |\n| Gross profit from operations                                | 1,181,185       | 124,897                    | -33,473     |             | 1,272,609 |\n| Depreciation and amortisation charge                        | -160,406        | -31,832                    | -697        |             | -192,935  |\n| Impairment losses                                           | -203,905        |                            |             |             | -203,905  |\n| Finance income                                              | 24,035          | 490                        | 1,548       |             | 26,073    |\n| Finance costs                                               | -20,225         | -16,395                    | -26,179     |             | -62,799   |\n| Exchange differences                                        | 1,214           | -10,856                    | 1,877       |             | -7,765    |\n| Impairment and loss on disposal of financial<br>instruments | -3              |                            |             |             | -3        |\n| Profit (loss) before tax                                    | 821,895         | 66,304                     | -56,924     | 0           | 831,275   |\n| Income tax                                                  | -231,816        | -23,343                    | -5,730      |             | -260,889  |\n| Consolidated profit (loss) for the year                     | 590,079         | 42,961                     | -62,654     | 0           | 570,386   |\n|                                                             |                 |                            |             |             |           |\n| Attributable to:                                            |                 |                            |             |             |           |\n| Non-controlling interests                                   | 14,332          |                            |             |             | 14,332    |\n| Net profit (loss) attributable to the Group                 | 575,747         | 42,961                     | -62,654     | 0           | 556,054   |\n|                                                             |                 |                            |             |             |           |\n| Statement of financial position                             |                 |                            |             |             |           |\n| Segment assets                                              | 5,060,337       | 1,212,402                  | 45,019      |             | 6,317,758 |\n| Investments accounted for using the equity<br>method        |                 | 390                        |             |             | 390       |\n| Property, plant and equipment                               | 1,398,853       | 250,354                    | 10,316      |             | 1,659,523 |\n| Total consolidated assets                                   | 5,060,337       | 1,212,792                  | 45,019      | 0           | 6,318,148 |\n| Segment liabilities                                         | 1,351,880       | 834,510                    | 1,584,064   |             | 3,770,454 |\n| Unallocated liabilities                                     |                 |                            |             |             |           |\n| Total consolidated liabilities (excluding<br>equity)        | 1,351,880       | 834,510                    | 1,584,064   | 0           | 3,770,454 |\n| Property, plant and equipment                               | 1,398,853       | 250,354                    | 10,316      | 0           | 1,659,523 |\n| Investments in non-current assets                           | 124,787         | 27,811                     | 1,294       | 0           | 153,892   |\n\nThere are no significant items that have not been reflected in cash flows other than depreciation and amortisation and impairment.\n\n#### **6.2 Geographical segments**\n\nRevenue from geographical segments is presented on the basis of customer location. Segment assets are determined by the geographical location of those assets.\n\n{62}------------------------------------------------\n\nImage /page/62/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape around the word. The word \"ACERINOX\" is in a darker shade of blue, contrasting with the lighter blue of the surrounding circle.\n\nThe data relating to geographical segments in 2023 is presented below:\n\n(Amounts in thousands of euros)\n\n|                                      | 2023      |                   |           |         |         |        |           |\n|--------------------------------------|-----------|-------------------|-----------|---------|---------|--------|-----------|\n|                                      | Spain     | Rest of<br>Europe | America   | Africa  | Asia    | Other  | Total     |\n| Revenue by destination of<br>goods   | 468,042   | 2,137,497         | 3,116,822 | 336,514 | 527,314 | 21,789 | 6,607,978 |\n| Segment assets                       | 1,267,746 | 1,364,909         | 2,857,679 | 408,691 | 195,061 | 4,683  | 6,098,769 |\n| Property, plant and<br>equipment     | 453,856   | 260,455           | 590,279   | 117,460 | 49,796  | 53     | 1,471,899 |\n| Investment property                  | 157       | 9,511             |           |         |         |        | 9,668     |\n| Investments in non-current<br>assets | 49,512    | 25,238            | 76,639    | 21,207  | 2,190   |        | 174,785   |\n\nThe data for 2022 are as follows:\n\n(Amounts in thousands of euros)\n\n|                                   | 2022      |                |           |         |         |        |           |\n|-----------------------------------|-----------|----------------|-----------|---------|---------|--------|-----------|\n|                                   | Spain     | Rest of Europe | America   | Africa  | Asia    | Other  | Total     |\n| Revenue by destination of goods   | 628,790   | 2,588,756      | 4,349,712 | 424,259 | 675,893 | 21,084 | 8,688,494 |\n| Segment assets                    | 1,330,745 | 1,449,493      | 2,620,365 | 521,631 | 389,051 | 6,862  | 6,318,147 |\n| Property, plant and equipment     | 445,281   | 262,279        | 608,608   | 122,403 | 210,968 | 68     | 1,649,607 |\n| Investment property               | 161       | 9,755          |           |         |         |        | 9,916     |\n| Investments in non-current assets | 59,410    | 27,259         | 44,944    | 19,824  | 2,456   |        | 153,892   |\n\nThe Group sells its products in about 80 countries across the five continents. The Group's sales in each of the following countries exceeded 5% of total consolidated sales in 2023 and 2022: United States 40.47% (2022: 43.29%), Germany 13.85% (2022: 10.29%) and Spain 7.08% (2022: 7.24%). These sales also include the sales of the high-performance alloys segment.\n\nNo single transaction with an external customer exceeded 10% of the Consolidated Group's total revenue for 2023 or 2022.\n\n#### <span id=\"page-62-0\"></span>**NOTE 7 – INTANGIBLE ASSETS**\n\nThe detail of the main classes of intangible assets and of the changes therein is as follows:\n\n{63}------------------------------------------------\n\nImage /page/63/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is in a lighter color, possibly white or a very light shade of blue, which contrasts with the darker blue of the circle.\n\n(Amounts in thousands of euros)\n\n| (Amounts in thousands of euros)                                |                         |                        |                                        |                       |          |          |\n|----------------------------------------------------------------|-------------------------|------------------------|----------------------------------------|-----------------------|----------|----------|\n| COST                                                           | Development<br>expenses | Industrial<br>property | Computer<br>applications<br>and others | Customer<br>portfolio | SUBTOTAL | Goodwill |\n| Balance as of 1 January 2022                                   | 17,146                  | 32,120                 | 53,844                                 | 29,200                | 132,310  | 118,953  |\n| Procurements                                                   | 1,454                   | 124                    | 1,159                                  |                       | 2,737    |          |\n| Disposals                                                      |                         | -38                    | -729                                   |                       | -767     |          |\n| Translation differences                                        |                         |                        | 153                                    |                       | 153      |          |\n| Balance as of 31 December 2022                                 | 18,600                  | 32,206                 | 54,427                                 | 29,200                | 134,433  | 118,953  |\n| Procurements                                                   | 1,030                   | 72                     | 2,010                                  |                       | 3,112    |          |\n| Transfers                                                      |                         |                        | 36                                     |                       | 36       |          |\n| Disposals                                                      |                         | -13                    | -216                                   |                       | -229     |          |\n| Translation differences                                        |                         |                        | -340                                   |                       | -340     |          |\n| Balance as of 31 December 2023                                 | 19,630                  | 32,265                 | 55,917                                 | 29,200                | 137,012  | 118,953  |\n| ACCUMULATED<br>AMORTISATION AND<br>IMPAIRMENT LOSS             | Development<br>expenses | Industrial<br>property | Computer<br>applications<br>and others | Customer<br>portfolio | SUBTOTAL | Goodwill |\n| Balance as of 1 January 2022                                   | 8,643                   | 25,959                 | 47,561                                 | 3,569                 | 85,732   | -67,889  |\n| Allocation                                                     | 1,144                   | 529                    | 2,276                                  | 1,947                 | 5,896    |          |\n| Disposals                                                      |                         | -31                    | -707                                   |                       | -738     |          |\n| Translation differences                                        |                         |                        | 106                                    |                       | 106      |          |\n| Balance as of 31 December 2022                                 | 9,787                   | 26,457                 | 49,236                                 | 5,516                 | 90,996   | -67,889  |\n| Allocation                                                     | 606                     | 539                    | 2,064                                  | 1,947                 | 5,156    |          |\n| Allowance for impairment losses                                |                         |                        | 28                                     |                       | 28       |          |\n| Disposals                                                      |                         | -19                    | -215                                   |                       | -234     |          |\n| Translation differences                                        |                         |                        | -273                                   |                       | -273     |          |\n| Balance as of 31 December 2023                                 | 10,393                  | 26,977                 | 50,840                                 | 7,463                 | 95,673   | -67,889  |\n| NET VALUE                                                      | Development<br>expenses | Industrial<br>property | Computer<br>applications<br>and others | Customer<br>portfolio | SUBTOTAL | Goodwill |\n| Cost as of 31 December 2021                                    | 17,146                  | 32,120                 | 53,844                                 | 29,200                | 132,310  | 118,953  |\n| Accumulated amortisation and<br>impairment losses              | -8,643                  | -25,959                | -47,561                                | -3,569                | -85,732  | -67,889  |\n| Carrying amount as of 31 December<br>2021                      | 8,503                   | 6,161                  | 6,283                                  | 25,631                | 46,578   | 51,064   |\n| Cost as of 31 December 2022                                    | 18,600                  | 32,206                 | 54,427                                 | 29,200                | 134,433  | 118,953  |\n| Accumulated amortisation and<br>impairment losses              | -9,787                  | -26,457                | -49,236                                | -5,516                | -90,996  | -67,889  |\n| Carrying amount as of 31 December<br>2022                      | 8,813                   | 5,749                  | 5,191                                  | 23,684                | 43,437   | 51,064   |\n| Cost as of 31 December 2023                                    | 19,630                  | 32,265                 | 55,917                                 | 29,200                | 137,012  | 118,953  |\n| Accumulated amortisation and                                   | -10,393                 | -26,977                | -50,840                                | -7,463                | -95,673  | -67,889  |\n| impairment losses<br>Carrying amount as of 31 December<br>2023 | 9,237                   | 5,288                  | 5,077                                  | 21,737                | 41,339   | 51,064   |\n\nThe amortisation charge for the year is included under \"depreciation and amortisation charge\" in the consolidated statement of profit or loss.\n\nAt 31 December 2023, the Group had entered into agreements to acquire intangible assets amounting to EUR 433 thousand (2022: EUR 791 thousand).\n\n{64}------------------------------------------------\n\nImage /page/64/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside a circular shape, also in dark blue, which surrounds the text. The background of the image is white.\n\n#### **Research and development expenditure**\n\nDue to the nature of its activity and as stated in its mission, the Acerinox Group considers research, development and innovation to be strategic in nature. R&D&I projects are focused on three main areas: development of new products, improving processes to further improve quality, productivity and costs, and adapting processes to new technologies and sustainability through projects that contribute to the circular economy, decarbonisation and waste recycling. With the incorporation of VDM Metals into the Acerinox Group, efforts were combined to leverage available resources jointly in line with the company's overall purpose and strategy of fostering sustainable innovation. The high-performance alloys division focuses its R&D&I activities mainly on the development of tailor-made products in collaboration with its customers. This includes the development of new materials, as well as the identification of alloys with high performance potential and the optimisation of key properties in those established in the market that can be classified for other applications. Most of the projects are carried out in collaboration with customers and research institutes which take part in the projects. The Group is improving the adaptability of the R&D&I departments by creating joint work structures and more agile and flexible processes. In 2023, collaboration in R&D tasks among the various units of the Group has strengthened, leading to enhanced synergies in generating knowledge and adding value to our products.\n\nVDM is the leading patent holder in the high-performance alloys sector with 53 patents.\n\nCertain research and development expenses incurred by the Group do not meet the criteria for capitalisation and are therefore expensed as incurred, according to their nature. The total research, development and technological innovation (R&D&I) expenses recorded directly as expenses for the year and charged to the Group's income statement stood at EUR 17,652 thousand (2022: EUR 16,516 thousand).\n\nThe high-performance alloys division does, however, capitalise costs relating to R&D&I projects in which the research findings are used to produce new products and processes, or to significantly improve existing products and processes, provided that the product or process proves to be technically and commercially feasible, the Group has the resources required to complete the development programme and it is considered that they will generate future cash flows that will enable their recovery. The total R&D&I expenditure capitalised in the year amounts to EUR 1,029 thousand, relating to 8 projects (2022: EUR 1,454 thousand, relating to 5 projects). VDM has 23 employees working on 89 R&D&I projects.\n\n#### **Customer portfolio**\n\nThe allocation in 2020 of the purchase price of the VDM Group to the net assets and liabilities identified led to the identification of new intangible assets, arising from the valuation of the customer portfolio.\n\nIt is standard industry practice to recognise both relationships with customers and the backlog as two of the most important intangible assets arising from a business combination. Both assets were valued jointly in the purchase price allocation process. The estimated fair value at the acquisition date was EUR 29,200 thousand.\n\n#### **Goodwill**\n\nAt 31 December 2023, goodwill in the amount of EUR 51,064 thousand reflected mainly the amount arising from the business combination performed in 2020 as a result of the acquisition of the VDM Metals Group (EUR 49,829 thousand). The goodwill was allocated to the VDM's subgroup cash-generating unit (CGU) which, as a whole, belongs to the highperformance alloys segment.\n\n#### **7.1 Impairment of goodwill**\n\nThe Group estimates the recoverable amount of goodwill on an annual basis, or more frequently where indications of possible impairment are identified. Accordingly, goodwill is allocated to each of the cash-generating units (CGUs) of the company to which the economic benefits of the business combination synergies are expected to flow.\n\nThe recoverable amount of a CGU is determined on the basis of the calculation of its value in use. These calculations use cash flow projections based on five-year financial budgets approved by management. Cash flows beyond this five-year period are extrapolated using the estimated growth rates indicated below. The terminal value is calculated by taking into consideration average amounts calculated on the basis of figures achieved in the past and also in the budgeted period, which enables bull and bear cycles to be standardised.\n\n{65}------------------------------------------------\n\nImage /page/65/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is positioned inside a blue circle that is open on the left side.\n\n#### **VDM**\n\nThe goodwill resulting from the acquisition of the VDM Group in 2020, amounting to EUR 49,829 thousand, has been allocated to the cash-generating unit (CGU) of the VDM subgroup, which belongs as a whole to the high-performance alloys segment.\n\nThe Group prepares annual five-year budgets. The estimated sales and production volumes rely on current capacities determined by existing machinery and equipment, approved investment projects, and considerations of anticipated future demand and market prices. These estimates are verified against projections provided by independent industry experts, including SMR (Steel Metals and Market Research). Management determines production costs by taking into account the current situation, the efficiency plans implemented and future price developments. Raw materials are estimated at constant prices.\n\nThe discount rates used are pre-tax values and reflect specific risks relating to the relevant segments. Other significant assumptions such as raw material prices are tied to the most recent values recorded in the pertinent markets.\n\nWith a sales volume exceeding 40 thousand tonnes in 2023 (2022: 43 thousand tonnes), VDM Metals continued to be the leading global manufacturer of nickel alloys.\n\nIn the 2023 financial year, the high-performance alloys market sustained strong performance with high demand and prices. This led to improved margins compared to the previous year, during which VDM achieved record profits. Additionally, the margins exceeded the estimates from the previous year, validating the goodwill recorded. The VDM Group achieved a new record result this year. The consolidated profit of the high-performance alloys division for the year amounted to EUR 73 million (70% higher than the previous year).\n\nMarket performance this year has varied from sector to sector. The oil and gas and chemical process industries have experienced ongoing growth. The automotive sector has maintained levels comparable to those of 2022, while the energy sector has seen significant declines, albeit with prospects for recovery ahead. In the aerospace sector, demand is increasingly oriented towards China, in many cases exceeding the capacity of the supply chain.\n\nThe Group has revised its five-year estimates to adapt them to new market circumstances, price levels and approved investment plans.\n\nThe Group is confident that the flows to perpetuity will materialise, mainly in terms of its use of production capacity and margins, using a perpetuity growth rate (g) of 2.2% in line with expected long-term inflation for the main markets in which VDM operates.\n\nThe key assumptions used to calculate the value in use were as follows:\n\n|                                      | 2023  | 2022  |\n|--------------------------------------|-------|-------|\n| Planned EBIT margin (*)              | 9.7%  | 5.5%  |\n| Weighted average growth rate, g (**) | 2.2%  | 2.3%  |\n| Pre-tax discount rate (***)          | 13.1% | 11.6% |\n| After-tax discount rate (***)        | 9.2%  | 8.4%  |\n\n*(\\*) Five-year budgeted average EBIT margin. EBIT is defined as profit or loss from operations and expressed as a margin or percentage of revenue.*\n\n*(\\*\\*) Rate used to extrapolate cash flows beyond the budgeted period.*\n\n*(\\*\\*\\*) Discount rate: weighted average cost of capital (WACC).*\n\nThe discount rate (WACC or weighted average cost of capital) was calculated on the basis of the interest rates of the German sovereign debt (twenty-year treasury bond) and a capital structure, market risk premiums and ratios of similar companies.\n\nWith respect to the terminal value, adjustments were performed to obtain flows to perpetuity, depreciation and amortisation were matched to the investments and changes in working capital were also calculated based on average amounts, deemed consistent in the long term, increased by the growth rate (g). The EBIT margin projected to perpetuity does not differ from that achieved by VDM in previous years.\n\nAnother assumption is the price of raw materials, particularly nickel, which is set when drawing up the budget. This is extrapolated and remains constant during the period of analysis.\n\nDue to the uncertain environment clouding the markets in which VDM operates, the Group analysed the probability of occurrence of the key assumptions, adjusting the estimated budgets, as well as those of the terminal year, to normalised\n\n{66}------------------------------------------------\n\nImage /page/66/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that arches over the text. The color of the text is also blue, matching the color of the circle. The overall design is simple and corporate, conveying a sense of strength and reliability.\n\nvalues that take into account the results obtained in the past. The residual value determined by the tests represents 60.3% of the total recoverable amount (2022: 63.9%).\n\nThe impairment test performed on 31 December 2023 showed a recoverable amount of EUR 1,198,380 thousand (2022: EUR 881,180 thousand), higher than the carrying amount, EUR 1,003,342 thousand (2022: EUR 814,257 thousand) by EUR 195,038 thousand (2022: EUR 66,923 thousand). Consequently, it is not necessary to recognise any impairment losses on goodwill.\n\nTo achieve an impairment of the carrying amount, the discount rate (WACC) would have to be increased by 20.3% to 11.1% (2022: 9.0%), while maintaining the growth rate (g). The planned average EBIT margin would have to be reduced by 20.4% to 7.7% (2022: 3.9%), with the other two assumptions remaining unchanged.\n\n#### <span id=\"page-66-0\"></span>**NOTE 8 – PROPERTY, PLANT AND EQUIPMENT**\n\nThe detail of the various items of property, plant and equipment and of the changes therein in 2023 and 2022 is shown in the following table:\n\n{67}------------------------------------------------\n\nImage /page/67/Picture/1 description: The image features the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is in a dark color, possibly black or a very dark blue, which contrasts with the white background of the logo. The blue circle surrounds the word, creating a clean and professional design.\n\n(Amounts in thousands of euros)\n\n| COST                           | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property,<br>plant and<br>equipment | Property, plant<br>and equipment<br>in the course of<br>construction | TOTAL     |\n|--------------------------------|-----------------------|------------------------|-------------------------------------------------------|----------------------------------------------------------------------|-----------|\n| Balance as of 31 December 2021 | 978,115               | 4,566,351              | 176,726                                               | 51,668                                                               | 5,772,866 |\n| Hyperinflation adjustments     | 344                   | 62                     | 121                                                   |                                                                      | 521       |\n| Additions                      | 1,748                 | 61,948                 | 14,480                                                | 72,979                                                               | 151,152   |\n| Transfers                      | 10,700                | 43,922                 | 4,325                                                 | -54,327                                                              | 4,626     |\n| Disposals                      | -3,109                | -32,087                | -4,467                                                | -71                                                                  | -39,734   |\n| Translation differences        | 28,686                | 147,181                | 2,113                                                 | 1,601                                                                | 179,581   |\n| Balance as of 31 December 2022 | 1,016,484             | 4,787,377              | 193,298                                               | 71,850                                                               | 6,069,009 |\n| Hyperinflation adjustments     | 319                   | 57                     | 114                                                   |                                                                      | 490       |\n| Additions                      | 2,770                 | 51,672                 | 15,348                                                | 101,883                                                              | 171,673   |\n| Decommissioning provision      | 6,871                 |                        |                                                       |                                                                      | 6,871     |\n| Transfers                      | 4,825                 | 24,897                 | 17,146                                                | -46,087                                                              | 78        |\n| Disposals                      | -2,812                | -30,169                | -22,989                                               | -59                                                                  | -56,029   |\n| Translation differences        | -19,892               | -126,157               | -2,408                                                | -2,107                                                               | -150,564  |\n| Balance as of 31 December 2023 | 1,008,565             | 4,707,677              | 200,509                                               | 125,480                                                              | 6,042,231 |\n\n| ACCUMULATED AMORTISATION AND<br>IMPAIRMENT LOSS | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant and<br>equipment | Property, plant<br>and equipment<br>in the course of<br>construction | TOTAL     |\n|-------------------------------------------------|-----------------------|------------------------|----------------------------------------------------|----------------------------------------------------------------------|-----------|\n| Balance as of 31 December 2021                  | 452,351               | 3,371,032              | 129,169                                            | 0                                                                    | 3,952,552 |\n| Allocation                                      | 23,022                | 150,356                | 6,062                                              |                                                                      | 179,440   |\n| Allowance for impairment losses                 |                       | 203,905                |                                                    |                                                                      | 203,905   |\n| Hyperinflation adjustments                      | 210                   | 50                     | 120                                                |                                                                      | 380       |\n| Transfers                                       | 2,198                 | -9,789                 | 9,616                                              |                                                                      | 2,023     |\n| Disposals                                       | -2,050                | -27,100                | -4,189                                             |                                                                      | -33,339   |\n| Translation differences                         | 12,129                | 101,020                | 1,290                                              |                                                                      | 114,439   |\n| Balance as of 31 December 2022                  | 487,860               | 3,789,474              | 142,068                                            | 0                                                                    | 4,419,402 |\n| Allocation                                      | 22,361                | 122,856                | 14,340                                             |                                                                      | 159,557   |\n| Allowance for impairment losses                 | 98,339                | 56,462                 | 1,005                                              | 373                                                                  | 156,179   |\n| Hyperinflation adjustments                      | 197                   | 46                     | 109                                                |                                                                      | 352       |\n| Transfers                                       | 62                    | 2,960                  | -2,497                                             |                                                                      | 523       |\n| Disposals                                       | -1,802                | -26,513                | -22,865                                            |                                                                      | -51,180   |\n| Translation differences                         | -11,698               | -100,786               | -2,010                                             | -9                                                                   | -114,502  |\n| Balance as of 31 December 2023                  | 595,319               | 3,844,499              | 130,150                                            | 364                                                                  | 4,570,332 |\n\n| NET VALUE                                      | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property,<br>plant and<br>equipment | Property, plant<br>and equipment<br>in the course of<br>construction | TOTAL      |\n|------------------------------------------------|-----------------------|------------------------|-------------------------------------------------------|----------------------------------------------------------------------|------------|\n| Cost as of 31 December 2021                    | 978,115               | 4,566,351              | 176,726                                               | 51,668                                                               | 5,772,860  |\n| Accumulated amortisation and impairment losses | -452,351              | -3,371,032             | -129,169                                              |                                                                      | -3,952,552 |\n| Carrying amount as of 31 December 2021         | 525,764               | 1,195,319              | 47,557                                                | 51,668                                                               | 1,820,308  |\n| Cost as of 31 December 2022                    | 1,016,484             | 4,787,377              | 193,298                                               | 71,850                                                               | 6,069,009  |\n| Accumulated amortisation and impairment losses | -487,860              | -3,789,474             | -142,068                                              |                                                                      | -4,419,402 |\n| Carrying amount as of 31 December 2022         | 528,624               | 997,903                | 51,230                                                | 71,850                                                               | 1,649,607  |\n| Cost as of 31 December 2023                    | 1,008,565             | 4,707,677              | 200,509                                               | 125,480                                                              | 6,042,231  |\n| Accumulated amortisation and impairment losses | -595,319              | -3,844,499             | -130,150                                              | -364                                                                 | -4,570,332 |\n| Carrying amount as of 31 December 2023         | 413,246               | 863,178                | 70,359                                                | 125,116                                                              | 1,471,899  |\n\nThe depreciation charge for the year is included under \"depreciation and amortisation charge\" in the consolidated statement of profit or loss.\n\nThe difference between the depreciation and amortisation charge included in the consolidated statement of profit or loss and consolidated statement of cash flows and the sum of the amounts charged reflected in the tables relating to property, plant and equipment, intangible assets, investment property and right-of-use assets is mainly due to the hyperinflation adjustments made to all the profit or loss items of the Argentine entity, which, in the case of the depreciation and amortisation charge, amount to EUR 24 thousand (2022: EUR 28 thousand).\n\n{68}------------------------------------------------\n\nImage /page/68/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue crescent shape. The crescent shape is open at the top and curves around the text. The text is also in blue, matching the color of the crescent.\n\nAny impairment of property, plant and equipment and goodwill is included under a separate, specific heading in the consolidated statement of profit or loss.\n\n#### **Investments**\n\nThe investments made in 2023 in both property, plant and equipment and intangible assets amounted to EUR 174,785 thousand. These investments include both the acquisition and installation of new equipment and recurrent maintenance expenditure investments. In many cases, these are investments aimed at improving efficiency and productivity, but they are also strategic in nature and committed to sustainability, as they entail a reduction in energy consumption. In the case of Acerinox Europa, the total amount of investments (including maintenance) is EUR 39 million, related to improvements and extensions made to several production lines. The investments made by the company North American Stainless amount to EUR 73.9 million, of which EUR 21 million correspond to the investment plan approved at the beginning of this year, and EUR 27 million to recurring investments in maintenance. At Columbus Stainless, investments for the year amounted to EUR 21.2 million. Finally, the VDM Group invested EUR 27.2 million in the year.\n\nIn January 2023, the Board of Directors of Acerinox, S.A. approved an investment of USD 244 million in the North American Stainless Group company, which will allow it to increase its production capacity by 200,000 tonnes (20% more) and thus strengthen its position in the market with higher added value products. NAS will have a new cold rolling mill, and will revamp its annealing and pickling lines. It also plans to enlarge the steelworks, along with other equipment.\n\nIn addition, in December 2023, the Board of Directors approved a EUR 67 million investment plan for the high-performance alloys division at the German plants in Unna, Altena and Werdohl, which will enable a gradual increase in production capacity for precision strip, bars, and wires, as well as sales by 15%. The planned investments include the expansion of three remelting furnaces, the upgrade of an annealing and pickling line, an additional defect detection line for bars and an atomiser for the production of stainless-steel powder and high-performance alloys for additive manufacturing.\n\nIn 2022, the investments made amounted to EUR 153,892 thousand, which include both the acquisition and installation of new equipment and recurrent investments in maintenance. As for Acerinox Europa, the total investment amount, including maintenance, reached EUR 52.7 million. The capitalisation of the major repairs conducted during the year at the steelworks and hot rolling mill, the construction of the slag storage building, and the installation of the new CS-6 cutting line were notable among these investments. The investments made by the company North American Stainless amounted to EUR 43.9 million, destined to the maintenance of existing equipment, updating of the AP1, new slitting line SL-5 and the replacement of equipment damaged in the steelworks incident and replacement of wiring. At Columbus Stainless, investments for the year amounted to EUR 19.8 million, with the installation of oxygen and nitrogen storage tanks and investments in plant maintenance being particularly noteworthy. Finally, the VDM Group invested EUR 27.8 million over the year for production growth, product quality improvement, safety, environment and the maintenance of existing equipment.\n\n#### **Property, plant and equipment in the course of construction**\n\nThe detail of the investments classified under this heading is as follows:\n\n|                                              | 2023    | 2022   |\n|----------------------------------------------|---------|--------|\n| Buildings                                    | 15,008  | 12,280 |\n| Plant and machinery                          | 103,180 | 57,437 |\n| Other items of property, plant and equipment | 6,928   | 1,371  |\n| Advances                                     |         | 762    |\n| TOTAL                                        | 125,116 | 71,850 |\n\n(Amounts in thousands of euros)\n\nOf the total amount recognised under this heading, EUR 25,082 thousand at Acerinox Europa (2022: EUR 21,316) and EUR 57,447 thousand at the US company North American Stainless, as a result of the new investment plan (2022: EUR 25,354 thousand), EUR 10,524 thousand at Roldan, EUR 12,812 thousand at Columbus (2022: EUR 10,648 thousand) and EUR 19,032 thousand in VDM (2022: 9,495 thousand), are noteworthy.\n\nThe total amount of transfers carried out from fixed assets in progress to completed in this year amounts to EUR 46,087 thousand, which include EUR 17,397 of Acerinox Europa for a new cutting line and improvements completed in several lines. In the case of North American Stainless, the transfers amounted to EUR 21,368 thousand corresponding, among others, to a bridge crane, improvements in the hot rolling annealing furnace (2022: EUR 54,327 thousand, mainly corresponding to the upgrade of the AP1).\n\n{69}------------------------------------------------\n\nImage /page/69/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue circle. The word \"ACERINOX\" is also in blue, matching the color of the circle. The circle is not fully closed, leaving a small gap at the top.\n\n#### **Property, plant and equipment located outside Spain**\n\nThe detail of the property, plant and equipment, including investment property, located outside Spain is as follows:\n\n(Amounts in thousands of euros)\n\n|                                                                | 2023      |                             | 2022      |                             |\n|----------------------------------------------------------------|-----------|-----------------------------|-----------|-----------------------------|\n|                                                                | Cost      | Accumulated<br>depreciation | Cost      | Accumulated<br>depreciation |\n| Land and buildings                                             | 710,534   | -424,046                    | 722,417   | -319,684                    |\n| Plant and machinery                                            | 3,255,890 | -2,668,683                  | 3,347,857 | -2,629,224                  |\n| Other items of property, plant and<br>equipment                | 142,873   | -78,509                     | 138,883   | -92,070                     |\n| Property, plant and equipment in the<br>course of construction | 89,860    | -364                        | 45,903    | -364                        |\n| TOTAL                                                          | 4,199,157 | -3,171,602                  | 4,255,060 | -3,040,978                  |\n\n#### **Changes in estimates**\n\nAs explained in **Note 3**, the Group periodically reviews estimated useful lives based on the valuations conducted by experts from the appropriate entity.\n\nNo useful lives were written down in the Group during the year.\n\nIn 2022, the Group company Columbus Stainless reviewed the useful lives of items whose useful life was about to end, extending it in those cases where the items were still in use. The technological improvements and maintenance plans performed on an ongoing basis by the company led the projected useful lives to be lengthened, since the company considered that it would continue to obtain cash flows from the use of these assets. The carrying amount of the assets whose useful lives were estimated in that fiscal year amounted to EUR 932 thousand, while the impact on income from the reduction of depreciation was EUR 60 thousand.\n\nThe Group proceeded with accounting of the change in estimate prospectively, as stipulated in IAS 8.\n\n#### **Guarantees**\n\nNone of the Group's assets had been pledged to secure bank borrowings at 31 December 2023 or 2022.\n\n#### **Obligations and commitments**\n\nAt 31 December 2023, the Group had entered into agreements to acquire new equipment and facilities for EUR 140,189 thousand, among which the following stand out: EUR 97,592 thousand relating to the investments made by North American Stainless as a result of the approved investment plan, EUR 19,828 thousand by Acerinox Europa, EUR 9,880 thousand corresponding to Columbus and EUR 11,152 thousand to the VDM Group.\n\nAt 31 December 2022, the Group had entered into agreements to acquire new equipment and facilities for EUR 59,254 thousand, among which the following stand out: EUR 16,543 thousand relating to the investments made by Acerinox Europa, EUR 17,387 thousand by North American Stainless, EUR 9,800 thousand corresponding to Columbus and EUR 11,254 thousand to the VDM Group.\n\n#### **Capitalisation of borrowing costs**\n\nBorrowing costs of EUR 60 thousand relating to Columbus Stainless were capitalised in 2023 (2022: EUR 14 thousand, also relating to the same Group company). The capitalisation rate in 2023 was 10.26% (2022: 7.46%).\n\n#### **Disposals of property, plant and equipment**\n\nLosses on the sale or retirement of property, plant and equipment recognised under \"other operating income\" in the consolidated statement of profit or loss for 2023 amount to EUR 2,719 thousand (2022: EUR 1,987 thousand), which mostly correspond to the removal of fixed assets from the Group's warehouses, either because they are obsolete or because they have been used for maintenance work. Last year, the assets damaged at the North American Stainless Group company as a result of the incident at the steelworks were also written off.\n\n{70}------------------------------------------------\n\nImage /page/70/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned inside a blue circle that is open at the bottom.\n\nThe gain on the sale or retirement of property, plant and equipment recognised in the 2023 statement of profit or loss under \"other operating income\" amounts to EUR 824 thousand, mainly corresponding to the sale of a warehouse in Lisbon owned by one of the Group's marketing entities (2022: EUR 1,837 thousand corresponding to the sale of a warehouse in the Spanish company Inoxcenter, classified as investment property).\n\n#### **Environment**\n\nThe items of property, plant and equipment the purpose of which is to minimise environmental impact and protect and improve the environment at 31 December 2023 and 2022 were as follows:\n\n(Amounts in thousands of euros)\n\n| Nature and purpose             | 2023        |                             | 2022        |                             |\n|--------------------------------|-------------|-----------------------------|-------------|-----------------------------|\n|                                | Gross value | Accumulated<br>depreciation | Gross value | Accumulated<br>depreciation |\n| Water treatment                | 110,447     | -97,659                     | 113,661     | -92,214                     |\n| Acid neutralisation            | 62,159      | -51,824                     | 63,171      | -48,559                     |\n| Treatment of gaseous emissions | 89,159      | -74,198                     | 89,901      | -73,093                     |\n| Automatic addition system      | 8,630       | -7,448                      | 8,741       | -7,339                      |\n| Other elements                 | 122,632     | -101,870                    | 123,839     | -101,587                    |\n| Total                          | 393,027     | -332,999                    | 399,313     | -322,792                    |\n\nIn 2023, the Group received an environmental grant of EUR 24,612 thousand mostly related to offsetting the costs of indirect greenhouse gas emissions. In 2022, EUR 9,879 thousand were received for the same concept. Both grants were recognised as income in the year under \"other operating income\".\n\nIn 2023, the Group incurred ordinary environmental expenses of EUR 119,069 thousand (2022: EUR 148,240 thousand).\n\n#### **Property, plant and equipment not used in operations**\n\nGroup property, plant and equipment not used in operations includes an industrial building which is classified as investment property. The detail and valuations of this property are broken down in **Note 9**.\n\n#### **Other disclosures**\n\nThere were no legal proceedings, attachments or similar measures that could affect items of property, plant or equipment at 31 December 2023 or 2022.\n\nThe Group companies have taken out several insurance policies to cover the risks to which their property, plant and equipment are subject. It is considered that these policies sufficiently cover such risks.\n\n#### **8.1 Impairment losses**\n\nAs established in IAS 36, and as mentioned in the accounting policies (**Note 2.11**), at each reporting date the Group assesses whether there is any indication that its assets might have become impaired. The value of an asset is impaired when its carrying amount exceeds its recoverable amount. The Group considers that indications of impairment exist when there is/are a significant decrease in the value of the asset, significant changes in the legal, economic or technological environment that could affect the measurement of assets, obsolescence or physical impairment, idle assets, low returns on assets, discontinuation or restructuring plans, repeated losses at the entity or substantial deviation from the estimates made. That is to say, to assess indications of impairment, both external sources of information (technological changes, significant fluctuations in market interest rates, market value of the assets) and internal sources of information (evidence of obsolescence, sustained losses at the entity, substantial deviation from estimates, etc.) are taken into account.\n\n{71}------------------------------------------------\n\nImage /page/71/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is a dark color, possibly blue or black. The text is enclosed within a circular shape, also in a dark color, which appears to be a ring or outline. The background is white.\n\nProperty, plant and equipment and intangible assets represent 28% of the Group's total assets. When examining individual segments, the high-performance alloys division accounts for 16.9% of the Group's total assets, while the stainless steels division represents 83.1%, with 77.3% attributed to the factories within that division. The remaining 5.8% was accounted for by the rest of the Group's 33 subsidiaries, mainly trading companies:\n\n| SUBSIDIARIES                  | 2023     | 2022     |\n|-------------------------------|----------|----------|\n| ACERINOX EUROPA, S.A.U.       | 26.55 %  | 23.50 %  |\n| ROLDAN, S.A.                  | 1.83 %   | 1.29 %   |\n| INOXFIL, S.A.                 | 0.18 %   | 0.17 %   |\n| NORTH AMERICAN STAINLESS INC. | 37.73 %  | 34.79 %  |\n| COLUMBUS STAINLESS PTY Ltd.   | 7.93 %   | 7.38 %   |\n| BAHRU STAINLESS               | 3.08 %   | 12.45 %  |\n| VDM METALS GROUP              | 16.89 %  | 15.09 %  |\n| Other subsidiaries            | 5.81 %   | 5.33 %   |\n| TOTAL                         | 100.00 % | 100.00 % |\n\nSince individual assets do not generate cash inflows independently, as the whole production process needs to be completed, impairment is not estimated on an individual basis but by allocating the assets to cash-generating units. In the case of factories, the smallest cash-generating units that can be considered encompass each factory as a whole.\n\nThe year 2023 was again marked by geopolitical tensions and supply chain problems. The Gaza-Israel conflict, alongside the ongoing Russia-Ukraine dispute, added to regional tensions. Furthermore, as the year drew to a close, disturbances in the Red Sea caused trade route disruptions, resulting in cargo being rerouted from the Suez Canal to longer alternative routes with higher costs.\n\nThe stainless division had a slow year following the inventory adjustment phase that started in the second half of 2022. Production continued the downward trend that was already evident in the fourth quarter of 2022.\n\nThe low demand throughout the year and the reduction in inventories meant that all plants in the stainless-steel division had to adjust their production to market conditions.\n\nThere were significant adjustments in all production countries with the exception of China and Indonesia, whose surpluses generated led to higher price pressure on the markets.\n\nThe market for high-performance alloys, on which Acerinox is focusing part of its strategy with a renewed commitment to higher value-added products, performed satisfactorily, maintaining its strength, solid demand and good prospects. Demand remained stable throughout the year, while production activity was slightly lower than in the record year of 2022 (-7% in steel production).\n\nAmid the uncertain conditions and challenges in the European and Asian stainless-steel markets, there are signs of a negative impacts in the Group's plants. These include Bahru Stainless in Malaysia, the Columbus plant in South Africa and Acerinox Europa, Roldan and Inoxfil in Spain.\n\n#### **Bahru Stainless, Sdn. Bhd**\n\nBahru Stainless, Sdn. Bhd was incorporated in 2008 and is located in Johor, Malaysia. Initially intended as a comprehensive stainless-steel flat product manufacturing facility, the rise in producers in the region prompted the Group to suspend the investments scheduled for future phases. It currently has two annealing and pickling lines and two cold-rolling lines.\n\nThe persistent overcapacity in the Chinese market over the past decade, along with the resulting price pressures from producers in this region on the international and Asian markets, has created a substantial price gap compared to the European and, above all, American markets for several years. China and Indonesia currently account for almost 70% of the world's stainless-steel production.\n\nThe various Southeast Asian countries and Asian countries in general, as well as Europe, have reacted to Chinese overcapacity by applying anti-dumping or protectionist measures in their local markets.\n\nDuring the year, the Asian market continued to suffer from aggressive pricing policies by major competitors in China and Indonesia.\n\n{72}------------------------------------------------\n\nImage /page/72/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue circle. The circle is not fully closed, with a gap at the top, giving it a crescent shape. The word \"ACERINOX\" is in a darker color, possibly black or a dark blue, contrasting with the white background.\n\nIn this context, and given the lack of prospects for this market, the Group is in the process of making strategic considerations about the future of Bahru Stainless, and does not rule out cessation of activity at this plant, and a time horizon of two years has been set to realise some of the alternatives currently under discussion.\n\nGiven this situation of uncertainty, the Group has again requested the support of an independent expert for the determination of the recoverable amount at 31 December 2023.\n\nIn previous years, estimates of recoverable value were made by an independent expert by calculating fair value less costs to sell and under the perspective of a market participant and considering a finite life (until 2046).\n\nGiven the new backdrop, the valuation method has been reconsidered to adapt it to the new circumstances and the latest management decisions. Thus, the value in use is the one that best reflects this situation.\n\nFor the determination of the value in use, a short-term scenario with a 2-year budget (2024-2025) and a residual value at the end of the period. The estimated budgets consider a gradual closure of the lines in the period considered. This scenario is the main assumption in the valuation conducted, where the discount rate for this two-year period is not significant. Estimated average EBIT over the two-year period is -4.1%.\n\nFor measurement purposes, a residual value of the lines has been considered in the terminal value, as well as the necessary decommissioning costs. In view of the scenario considered reasonable in this context, no value was recognised for tax credits and tax concessions, as these would be lost in the scenario under consideration.\n\nIn this scenario, the independent expert's valuation of Bahru results in zero value, so the Group has impaired all assets, including intangible assets and property, plant, and equipment, except for land and the residual value of machinery. The impairment recognised amounts to EUR 156,207 thousand. In turn, in view of this new situation, a decommissioning provision amounting to EUR 6,871 thousand has been recognised, recognising in turn an increase in the value of the assets.\n\nAs the assets are fully impaired, except for the aforementioned values, the Group does not expect any future changes in valuations and therefore no sensitivity analysis is required. Only in the event of changed circumstances would the Group be able to reverse part of the recorded impairment, as set out in the policy in Note 2.11.\n\nIn 2022, an asset impairment of EUR 203,905 thousand was recorded. Impairment accumulated at year-end amounted to EUR 489,435 thousand.\n\n#### **Acerinox Europa, S.A.U.**\n\nAcerinox Europa was incorporated in 2011 as a result of the spin-off of the manufacturing activity of Acerinox, S.A., and its main assets are the facilities located in Campo de Gibraltar. The Acerinox Europa factory, inaugurated in 1970, was the first integral stainless-steel factory in the world. The knowledge and experience gained during its design and execution played a pivotal role in the establishment of other factories within the Group. It is the leading stainless-steel producer in the Spanish market.\n\nThe integrated flat product plant has steelmaking, hot rolling and cold-rolling facilities and has a theoretical installed steelmaking capacity of one million tonnes in steelmaking and 660,000 tonnes of cold rolling. It manufactures flat stainlesssteel products in various types of steel, formats, thicknesses and finishes.\n\nAcerinox Europa is strategically located on the Strait of Gibraltar and has access to the Atlantic and the Mediterranean as well as its own seaport. The company supplies flat products all over the world, with a focus on the European continent, as well as semifinished products to other plants within the Group's production network, primarily to the Acerinox Group's long products plant in Spain (Roldan). Despite being the Group's first a nd oldest factory, the plant remains at the forefront by ensuring that its production lines are upgraded with the latest advances in order to remain competitive.\n\nAcerinox Europa is the market leader in Spain with a market share of around 50% and 10% in Europe.\n\nThis year, the adjustment of stocks in the supply chain has led to a fall in apparent consumption in Europe of around 20%. The main correction, with declines of more than 50%, was in imports, which were mainly destined for the distribution market, while demand from end consumers remained more stable.\n\n{73}------------------------------------------------\n\nImage /page/73/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle surrounds the word, creating a clear and recognizable brand mark.\n\nThe reduction in imports this year is due to the collapse of prices on the European market, as well as the safeguard and trade defence measures in force, and the positive impact of the opening of new anti-circumvention investigations into Indonesian re-rolled material in Taiwan, Vietnam and Turkey.\n\nThe complicated situation of the European markets caused by the fall in demand and in prices, and the high energy costs, have led to signs of deterioration in this financial year. In the face of this uncertainty, the management team requested a valuation by an independent expert, who determined the recoverable amount of the assets based on their value in use.\n\nFor this purpose, the Group has updated the five-year results forecasts based on the new circumstances and taking into account the future strategic plans approved by the management, which have been designed with the aim of improving the results of Acerinox Europa, the main component of the Spanish fiscal Group, redirecting a greater part of its sales towards end customers and towards products with higher added value.\n\nThe Board of Directors of Acerinox has approved the Acerinox Europa strategic plan for the next 2 financial years 2024- 2025.\n\nIn terms of demand, 2023 was the worst year in terms of sales since the creation of Acerinox Europa in 2011, due to the high stock levels in the distribution chain, which have led to a drop in sales to manufacturers, forcing the application of Temporary Layoff Plans (ERTEs) at the Algeciras factory on a recurring basis for several months of this year. Low prices have also forced the Group to forego orders due to the inability to achieve minimum contribution margins. By 2024 and with inventories in the supply chain very low, the Group expects to reach sales levels somewhat above 2022 (second worst year in history, only surpassed by 2023) and to return to more stable volumes, in line with historical pre-pandemic levels, from 2025 onwards, thanks to the strategic plans adopted by the company. From 2026, SMR (Steel Metals and Market Research) demand estimates have been considered, which estimate moderate increases of 1.7% on average for the following 3 years.\n\nOn the price side, estimates are based on external sources, which foresee slight increases in both 2024 and 2025, from the lowest historical levels ever seen in 2023. Prices remain constant from 2026 onwards.\n\nFor supply prices, forward price curves for both electricity and gas are considered. All other costs take into account increases in consumer price indices.\n\nThe Group took into account all these circumstances and the adjustments to the macroeconomic forecasts in preparing the five-year budgets.\n\nThe budgets have been prepared taking into account the following: demand estimates, raw material and selling prices, exchange rates, consumer price increases, energy costs estimates and the Company's strategy itself.\n\nThe independent expert has reviewed this initial budget provided by the company. It has taken into account the future sales scenarios and expectations, stressing gross margin to align with historical values improved by the company's strategy.\n\nTo determine the value in use of the assets, both the estimate of future cash flows that the entity expects to obtain from the assets and the discount rate, i.e. the weighted average cost of capital (WACC), were taken in account.\n\nThe key assumptions used to calculate the value in use were as follows:\n\n|                                   | 2023  | 2022  |\n|-----------------------------------|-------|-------|\n| Planned EBIT margin (*)           | 4.9%  | 5.1%  |\n| Weighted average growth rate (**) | 2.0%  | 2.3%  |\n| Pre-tax discount rate (***)       | 11.9% | 10.8% |\n| After-tax discount rate (***)     | 9.3%  | 8.2%  |\n\n*(\\*) Five-year budgeted average EBIT margin. EBIT is defined as profit or loss from operations and expressed as a margin or percentage of revenue.*\n\n*(\\*\\*) Rate used to extrapolate cash flows beyond the budgeted period.*\n\n*(\\*\\*\\*) Discount rate: weighted average cost of capital (WACC).*\n\nThe discount rate was determined by considering a normalised 20-year German bond as the benchmark. Likewise, a market risk premium for Spain, historical betas, a leverage structure and cost of debt in line with market assumptions have been considered.\n\nA normalisation exercise has been conducted in relation to the terminal value to achieve a perpetuity cash flow that is expected to remain stable in the long term, increased by the growth rate (g). The growth rate (g) was estimated on the basis of expected long-term inflation. The residual value considered in the test represents 79% of the total recoverable amount.\n\n{74}------------------------------------------------\n\nImage /page/74/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is positioned within a partial blue circle, which curves around the text, creating a sense of enclosure and emphasis.\n\nThe impairment test conducted at 31 December 2023 shows an excess of the recoverable amount (EUR 1,049,174 thousand) over the carrying amount (EUR 849,966 thousand) of EUR 199,208 thousand. Consequently, no impairment is recorded.\n\nA sensitivity analysis under different scenarios shows that the discount rate (WACC) would have to be increased by 17% to 10.8% to start generating impairment, with the other assumptions remaining unchanged. Regarding the growth rate (g) would have to be brought to zero, and the WACC would have to be increased by 1% in order to start achieving an impairment of the carrying amount.\n\nIn order to achieve impairment, the planned average EBIT margin would have to be reduced by 16% to an average value of 4.1% during the projected period, with the other two assumptions remaining unchanged.\n\n#### **Columbus Stainless Pty. Ltd.**\n\nColumbus Stainless, Middelburg (South Africa), is the only integrated stainless-steel factory in Africa. It is the main supplier of both the domestic market and the various consumer areas of the continent, in which it is the leader. The Columbus factory, the most technologically advanced in the industry, is equipped with the most efficient machinery and has a considerable competitive advantage due to its location, not just for the distribution of finished goods but also because of its proximity to sources of raw materials, particularly ferrochrome.\n\nColumbus manufactures both flat stainless steel and carbon steel products. Faced with the difficult market situation in both Europe and Asia in recent years, Columbus achieved a milestone with the manufacture of carbon steel using technology designed to produce stainless steel. After the closure of one of the local carbon steel production plants, part of this market was left unsupplied and had to be covered by imports. Columbus took advantage of this situation to win orders and serve this niche. In this way, the company was able to partially compensate for the difficulties in the stainless-steel market, reduce its dependence on exports and increase its steel production, thereby diluting fixed costs.\n\nThe Columbus factory has also been affected this year by low levels of demand, which has forced it to close the factory for a few weeks during the year to balance production and reduce stock levels. At Columbus, sales in the local market accounted for 65% of total sales. The diversification towards carbon steel accounted for 36% of total steel production this year.\n\nExports have been affected by the inclusion of South African steel imports in Europe's safeguard measures since June 2022.\n\nThis year, stainless-steel sales in the local market decreased by 7% compared to the previous year; carbon steel sales remained in line with the previous year, while exports decreased by 29%\n\nThe company's continuous improvement initiatives in line with the Group's excellence plans have boosted productivity and efficiency, leading to cost improvements. This has enabled Columbus to maintain a highly competitive cost structure.\n\nSales prices, as in other markets, have suffered a continuous deterioration this year.\n\nWith respect to the five-year budgets, the estimated sales and production volumes are based on current capacities using existing machines and equipment, and take into account the evolution of both future demand and prices, with respect to the company's product mix, as estimated by independent industry experts. Management determines production costs by taking into account the current situation, the efficiency plans implemented and future price developments.\n\nDemand estimates were based on SMR (Steel & Metals Market Research).\n\nThe discount rates used are pre-tax values and reflect specific risks relating to the relevant segments. Other significant assumptions such as exchange rates and raw material prices are tied to the most recent values recorded in the pertinent markets.\n\nThe Group is confident that the flows to perpetuity will materialise, mainly in terms of its use of production capacity and margins. They were calculated using growth rates estimated on the basis of the expected long-term inflation rate.\n\nThe key assumptions used to calculate the value in use were as follows:\n\n{75}------------------------------------------------\n\nImage /page/75/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the text. The circle is not a complete circle, but rather a curved shape that partially encloses the text.\n\n|                                   | 2023  |\n|-----------------------------------|-------|\n| Planned EBIT margin (*)           | 5.7%  |\n| Weighted average growth rate (**) | 4.5%  |\n| Pre-tax discount rate (***)       | 17.8% |\n| After-tax discount rate (***)     | 13.1% |\n\n*(\\*) Five-year budgeted average EBIT margin. EBIT is defined as operating income and expressed as a margin or percentage of revenue.*\n\n*(\\*\\*) Rate used to extrapolate cash flows beyond the budgeted period.*\n\n*(\\*\\*\\*) Discount rate: weighted average cost of capital (WACC).*\n\nThe average EBIT margin indicated for this financial year has been reached in the past, and in 2022 (10.9%) it was 1.9 times higher.\n\nThe discount rate (WACC or weighted average cost of capital) was calculated on the basis of the interest rates of the South African sovereign debt (ten-year swap of the South African rand) and the main markets where it is active, and a capital structure, market risk premiums and ratios of similar companies. The reference currency in this connection was the South African rand, since all the cash flows are estimated in this currency.\n\nWith respect to the terminal value, adjustments were performed to obtain flows to perpetuity, depreciation and amortisation were matched to the investments and changes in working capital were also calculated based on average amounts, deemed consistent in the long term, increased by the growth rate (g). The growth rate (g), like the discount rate, is estimated on the basis of the South African rand and calculated in accordance with the expected long-term inflation in that currency. At terminal value, the EBIT margin considered is lower than the average of the explicit budgeting period.\n\nOther assumptions are the ZAR/EUR exchange rate (20.35 ZAR/EUR) and the price of raw materials (USD 16,000/t), which are established when drawing up the budget. Both are extrapolated and kept constant during the period of analysis.\n\nDue to the uncertain environment clouding the markets in which Columbus operates, the Group analysed the probability of occurrence of the key assumptions, adjusting the estimated budgets, as well as those of the terminal year, to normalised values that mainly take into account the results obtained in the past, in addition to the company's new production mix. The residual value considered in the test represents 48% of the total recoverable amount.\n\nThe impairment test conducted at 31 December 2023 shows an excess of the recoverable amount (EUR 353,379 thousand) over the carrying amount (EUR 271,962 thousand) of EUR 81,417 thousand, accordingly, no impairment was necessary (there were no indications of impairment the previous year).\n\nHowever, a sensitivity analysis has been carried out, which concludes that the discount rate (WACC) would have to be increased by 21.8% to 15.9%, and the perpetual growth rate (g) would have to be equal to zero to start generating impairment. The planned average EBIT margin would have to be reduced by 65.6% (up to 2.0%) to start generating impairment.\n\n#### **Roldan, S.A.**\n\nRoldan is the eldest industrial facility of the Acerinox Group and one of the three manufacture plants for long product production. Roldan is located in Ponferrada (Leon, Spain) and produces angles, bars and wire rod in various types of steel and finishes. Part of its production is sent to Inoxfil, located in Igualada (Barcelona, Spain).\n\nRoldan uses as raw material for the production of long products, the billet supplied by the Group's plant in Palmones, Acerinox Europa, S.A.U.\n\nThe long product manufactured in this plant is supplied to both the internal market and to international customers, and its stainless steels are present in some of the most iconic international projects.\n\nApparent consumption of the long product in Europe in 2023 fell by 20%. The factories have operated at significantly lower production levels than in previous years, with volumes falling below the break-even point. As a result, the Roldan factory has had to implement the Temporary Layoff Plan on multiple occasions.\n\nThe decline in prices throughout the year was primarily driven by imports reaching nearly 40%, while the decrease in raw material costs had a considerable effect on the company's annual performance. Since the beginning of the year, prices have\n\n{76}------------------------------------------------\n\nImage /page/76/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is positioned within a partial blue circle, which curves around the text, creating a sense of enclosure and emphasis.\n\nbeen falling steadily, reaching a cumulative decline of 35% in December. The pressure on the market has also reduced the number of orders quoted with alloy surcharges compared to the effective prices mostly quoted by Asian suppliers.\n\nSimilar to stainless-steel flat products, demand has also been consistently low all year due to overstocking within the supply chain. Inventory levels have started to correct in the coming months, so 2024 is expected to see a substantial improvement in production, sales and prices, but not yet to 2022 levels.\n\nThe five-year budget and key variables used follow the same guidelines stated for Acerinox Europa, duly contextualised in the stainless-steel long products market.\n\nThe recoverable amount of the assets was determined in accordance with their value in use.\n\nTo determine the value in use of the assets, the estimate of future cash flows that the entity expects to obtain from the assets and the discount rate, i.e. the weighted average cost of capital (WACC), were taken in account.\n\nThe key assumptions used in the value in use calculations are the same as those described for Acerinox Europa with the exception of the budgeted average EBIT margin which in the case of Roldan has been 4.9%.\n\nThe terminal value represents 58% of the total recoverable amount. At terminal value, the EBIT margin considered is lower than the average of the explicit budgeting period.\n\nThe impairment test performed as of 31 December 2023 reveals an excess of the recoverable amount (EUR 92,787 thousand) over the carrying amount (EUR 57,485 thousand) of EUR 35,302 thousand, so that no impairment of the Company's assets is required.\n\nHowever, a sensitivity analysis has been carried out, which concludes that the discount rate (WACC) would have to be increased by 56.8% to 14.5%, and the perpetual growth rate (g) would have to be equal to zero to start generating impairment. The planned average EBIT margin would have to be reduced by 33.5% (up to 3.2%) to start generating impairment.\n\n#### **Inoxfil, S.A.**\n\nInoxfil, S.A. is one of the Group's two long product plants in Spain and engages in the manufacture of stainless-steel wire. Located in Igualada (Barcelona, Spain), this company is 100% owned by the Group company Roldan, S.A. Inoxfil receives wire rod mainly from Roldan, but also from other third-party suppliers, which is used as raw material to complete its production process and obtain wire. This is therefore the final production link in a network starting when Roldan receives the billet from Acerinox Europa, this being the only Group plant with a melting shop in Spain.\n\nThe long product manufactured by this plant is supplied both to the domestic market and to international customers.\n\nThe five-year budget and key variables used follow the same guidelines stated for Acerinox Europa, duly contextualised in the stainless-steel long products market.\n\nThe recoverable amount of the assets was determined in accordance with their value in use.\n\nTo determine the value in use of the assets, the estimate of future cash flows that the entity expects to obtain from the assets and the discount rate, i.e. the weighted average cost of capital (WACC), were taken in account.\n\nAs in the case of Roldan, the key assumptions used in the value in use calculations are the same as those described for Acerinox Europa with the exception of the budgeted average EBIT margin which in the case of Inoxfil has been 5.3%.\n\nThe terminal value represents 54% of the total recoverable amount. At terminal value, the EBIT margin considered is lower than the average of the explicit budgeting period.\n\nThe impairment test performed as of 31 December 2023 reveals an excess of the recoverable amount (EUR 16,278 thousand) over the carrying amount (EUR 11,063 thousand) of EUR 5,215 thousand, so that no impairment of the Company's assets is required.\n\nHowever, a sensitivity analysis has been carried out, which concludes that the discount rate (WACC) would have to be increased by 52.4% to 14.1%, and the perpetual growth rate (g) would have to be equal to zero to start generating\n\n{77}------------------------------------------------\n\nImage /page/77/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue, crescent-shaped arc. The arc encircles the word, creating a circular design.\n\nimpairment. The planned average EBIT margin would have to be reduced by 31.2% (up to 3.6%) to start generating impairment.\n\n#### **Impairment analyses conducted in 2022**\n\nThe Acerinox Group obtained the best results in its history in 2022 despite the complexity of the market, geopolitical uncertainty and high energy costs, especially in Europe. The improvement in activity in 2021 continued in the first half of 2022. In the second half of the year, however, activity was affected by the large quantities of imported material, which led to an increase in inventories at stockists and thus to a decline in apparent consumption.\n\nEBITDA of EUR 1,276 million was achieved in a complex environment. These include, among others, the instability generated by the geopolitical situation with Russia's invasion of Ukraine, cost inflation, especially energy prices in Europe, supply chain problems, the collapse of nickel prices on the London Metal Exchange (LME) in March and incidents that occurred in some of the Group's factories.\n\nIn this context of uncertainty, there were signs of deterioration in the Group's factories in Bahru Stainless, and in Acerinox Europa.\n\nIn the case of Bahru, an estimation of the recoverable amount (based on fair value less costs of disposal) was carried out in the context of an impairment test analysis from the perspective of a market participant, taking into account the existing scenario of uncertainty. The valuation was carried out by an independent expert. As a result of the analysis an impairment of EUR 203,905 thousand was recorded.\n\nFor Acerinox Europa, the determination of the recoverable value was based on calculating its value in use. In this regard, the impairment test conducted at 31 December 2022 showed an excess of the recoverable amount (EUR 1,091,106 thousand) over the carrying amount (EUR 912,260 thousand) of EUR 178,846 thousand. Consequently, no impairment was recorded.\n\n#### <span id=\"page-77-0\"></span>**NOTE 9 – INVESTMENT PROPERTY**\n\n\"Investment property\" includes Group-owned buildings not occupied by the Group which are held to earn returns, either through rental or through capital appreciation and subsequent disposal of the buildings.\n\nAt the end of 2022 and 2023, the Group only has one industrial building in Italy classified as investment property. This industrial building was used for commercial activities and is currently leased to third parties. In addition, a few square metres at Acerinox's headquarters are also included as investment property.\n\nThe detail of the changes in investment property in 2023 and 2022 is as follows:\n\n{78}------------------------------------------------\n\nImage /page/78/Picture/9 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is positioned inside a partial circle, also in dark blue, that curves around the top and right side of the word. The background is white.\n\n(Amounts in thousands of euros)\n\n| COST                                            | 2023   | 2022   |\n|-------------------------------------------------|--------|--------|\n| Opening balance                                 | 12,700 | 18,145 |\n| Transfers                                       |        | -4,620 |\n| Disposals                                       |        | -825   |\n| Balance as of 31 December                       | 12,700 | 12,700 |\n| ACCUMULATED AMORTISATION AND<br>IMPAIRMENT LOSS | 2023   | 2022   |\n| Opening balance                                 | 2,784  | 4,930  |\n| Allocation                                      | 248    | 514    |\n| Transfers                                       |        | -2,036 |\n| Disposals                                       |        | -624   |\n| Balance as of 31 December                       | 3,032  | 2,784  |\n| NET VALUE                                       | 2023   | 2022   |\n| Cost at 31 December                             | 12,700 | 12,700 |\n| Accumulated amortisation and impairment losses  | -3,032 | -2,784 |\n| Carrying amount as of 31 December               | 9,668  | 9,916  |\n\nNo changes have taken place in this year.\n\nIn 2022, certain floors of the Group's head offices in Spain were reclassified from investment property to property, plant and equipment, as they were used by the Group itself and were no longer available for lease. Meanwhile, one of the buildings classified in this category, located in Spain, was sold with a net carrying amount of EUR 201 thousand. The proceeds from this sale amounted to EUR 1,443 thousand.\n\nTotal income from the lease of warehouses amounted to EUR 351 thousand in 2023 (2022: EUR 310 thousand). The associated operating expenses, including repair and maintenance expenses, amounted to EUR 101 thousand (2022: EUR 67 thousand).\n\nThe market value of all the investment property exceeded the carrying amount thereof and amounted to EUR 11,706 thousand at 31 December 2023 (2022: EUR 11,656 thousand). This valuation takes into account observable market variables such as offers and prices per square metre of premises available in the geographical area of the Group's investment property and, therefore, the determination of fair value is classified within the LEVEL 2 hierarchy in accordance with the policy established in **Note 2.12.5**.\n\n{79}------------------------------------------------\n\nImage /page/79/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is stacked vertically, with \"ACER\" on top and \"INOX\" below. The circle is thick and prominent, giving the logo a clean and modern appearance.\n\n#### <span id=\"page-79-0\"></span>**NOTE 10 – RIGHT-OF-USE ASSETS (LEASES)**\n\nThe detail of the right-of use assets, measured in accordance with the present value of future lease payments, and of the changes therein this financial year is as follows:\n\n(Amounts in thousands of euros)\n\n| COST                           | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant<br>and equipment | TOTAL  |\n|--------------------------------|-----------------------|------------------------|----------------------------------------------------|--------|\n| Balance as of 31 December 2021 | 11,216                | 6,415                  | 6,947                                              | 24,578 |\n| Additions                      | 929                   | 3,581                  | 2,924                                              | 7,434  |\n| Revaluations                   |                       | 909                    |                                                    | 909    |\n| Disposals                      | -1,530                | -632                   | -1,657                                             | -3,819 |\n| Translation differences        | -32                   | 5                      | 236                                                | 209    |\n| Balance as of 31 December 2022 | 10,567                | 10,278                 | 8,466                                              | 29,311 |\n| Additions                      | 4,261                 | 3,125                  | 1,923                                              | 9,309  |\n| Revaluations                   |                       |                        |                                                    | 0      |\n| Transfers                      | -2                    |                        | -815                                               | -817   |\n| Disposals                      | -97                   | -4,260                 | -945                                               | -5,302 |\n| Translation differences        | -74                   | 4                      | -196                                               | -266   |\n| Balance as of 31 December 2023 | 14,655                | 9,147                  | 8,433                                              | 32,235 |\n\n| ACCUMULATED AMORTISATION AND<br>IMPAIRMENT LOSS | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant<br>and equipment | TOTAL  |\n|-------------------------------------------------|-----------------------|------------------------|----------------------------------------------------|--------|\n| Balance as of 31 December 2021                  | 3,916                 | 3,350                  | 2,912                                              | 10,178 |\n| Allocation                                      | 1,845                 | 2,794                  | 2,395                                              | 7,034  |\n| Disposals                                       | -1,519                | -626                   | -1,637                                             | -3,782 |\n| Translation differences                         | -27                   | -2                     | -310                                               | -339   |\n| Balance as of 31 December 2022                  | 4,215                 | 5,518                  | 3,371                                              | 13,104 |\n| Allocation                                      | 1,873                 | 2,145                  | 2,128                                              | 6,146  |\n| Revaluations                                    |                       |                        |                                                    | 0      |\n| Transfers                                       |                       | 28                     | -553                                               | -525   |\n| Disposals                                       | -96                   | -4,260                 | -838                                               | -5,194 |\n| Translation differences                         | -62                   | 1                      | -86                                                | -147   |\n| Balance as of 31 December 2023                  | 5,930                 | 3,432                  | 4,022                                              | 13,384 |\n\n| NET VALUE                                      | Land and<br>buildings | Plant and<br>machinery | Other items of<br>property, plant<br>and equipment | TOTAL   |\n|------------------------------------------------|-----------------------|------------------------|----------------------------------------------------|---------|\n| Cost as of 31 December 2021                    | 11,216                | 6,415                  | 6,947                                              | 24,578  |\n| Accumulated amortisation and impairment losses | -3,916                | -3,350                 | -2,912                                             | -10,178 |\n| Carrying amount as of 31 December 2021         | 7,300                 | 3,065                  | 4,035                                              | 14,400  |\n| Cost as of 31 December 2022                    | 10,567                | 10,278                 | 8,466                                              | 29,311  |\n| Accumulated amortisation and impairment losses | -4,215                | -5,518                 | -3,371                                             | -13,104 |\n| Carrying amount as of 31 December 2022         | 6,352                 | 4,760                  | 5,095                                              | 16,207  |\n| Cost as of 31 December 2023                    | 14,655                | 9,147                  | 8,433                                              | 32,235  |\n| Accumulated amortisation and impairment losses | -5,930                | -3,432                 | -4,022                                             | -13,384 |\n| Carrying amount as of 31 December 2023         | 8,725                 | 5,715                  | 4,411                                              | 18,851  |\n\nThe borrowing costs on the lease liabilities recognised by the Group at 31 December 2023 amounted to EUR 508 thousand (2022: EUR 328 thousand).\n\nThe interest rate used is the interest rate implicit in the lease, or the lessee's incremental borrowing rate if the former is not practicable to determine.\n\nLease expenses for low value assets, short-term leases or contracts that do not qualify as leases in accordance with IFRS 16 and which are shown as \"operating expenses\" in the income statement amount to EUR 18,097 thousand (2022: EUR 15,735 thousand).\n\n{80}------------------------------------------------\n\nImage /page/80/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the top, creating a crescent shape around the word. The text is also in blue, matching the color of the circle.\n\nThe term of the Group's leases and the amount of the payments remaining as of 31 December 2023 are as follows:\n\n(Amounts in thousands of euros)\n\n|                    | 2023<br>Amount of future<br>payments | 2022<br>Amount of future<br>payments |\n|--------------------|--------------------------------------|--------------------------------------|\n| Up to 1 year       | 4,367                                | 4,785                                |\n| 1-5 years          | 10,181                               | 8,366                                |\n| 5-10 years         | 2,660                                | 905                                  |\n| More than 10 years | 1,615                                | 1,386                                |\n| TOTAL              | 18,823                               | 15,442                               |\n\nOf the total amount of future lease payments, EUR 4,367 thousand correspond to the short term and EUR 14,456 thousand to the long term (2022: EUR 4,785 thousand corresponding to the short term and EUR 10,657 thousand to the long term).\n\nThe amount of the leases exceeding ten years relates mainly to a plot of land that the Group company Inoxcenter, S.L.U. has leased to the consortium of the Barcelona free trade zone, on which the Group has constructed an industrial building owned by it.\n\nAt 31 December 2023, the balance of the lease liabilities was EUR 18,823 thousand, most of which were recognised under \"other non-current financial liabilities\" (2022: EUR 15,442 thousand).\n\n#### <span id=\"page-80-0\"></span>**NOTE 11 – INVENTORIES**\n\nThe detail of \"inventories\" in the consolidated statement of financial position as at 31 December is as follows:\n\n(Amounts in thousands of euros)\n\n|                                               | 2023      | 2022      |\n|-----------------------------------------------|-----------|-----------|\n| Raw materials and other supplies              | 439,205   | 547,965   |\n| Products in process                           | 673,544   | 714,171   |\n| Finished products                             | 582,896   | 695,494   |\n| By-products, wastes and recoverable materials | 164,890   | 197,912   |\n| TOTAL                                         | 1,860,535 | 2,155,542 |\n\nThe lower activity this year and the decrease in raw material prices have led to a decrease in inventories.\n\n\"Raw materials and other supplies\" includes EUR 54,736 thousand relating to the measurement of the emission allowances held by the Group at 2023 year-end (2022: EUR 44,233 thousand).\n\nThe changes in finished goods and work in progress in the year, according to the consolidated statements of financial position as at 31 December 2023 and 2022, shown above, differ from the figures recognised in the respective consolidated statements of profit or loss as a result of translation differences.\n\nThe cost of goods sold was calculated in accordance with the policy defined in **Note 2.13** and amounted to EUR 5,704 million in 2023 (2022: EUR 6,981 million).\n\nAt the close of 2023, the Group recognised an adjustment of EUR 64,630 thousand in order to measure its inventories at net realisable value where this was lower than cost. An adjustment of EUR 97,618 thousand was recognised in 2022.\n\n#### **Obligations and commitments**\n\nAt 31 December 2023, the Consolidated Group had commitments to purchase raw materials amounting to EUR 240,579 thousand (2022: EUR 271,850 thousand). At the same date, there are no firm sales commitments, but there are formalised orders, for which the Group anticipates no circumstances that would prevent their delivery within the agreed deadlines.\n\nThe Group does not have any inventories with a cycle exceeding one year and, therefore, no borrowing costs were capitalised in this connection.\n\n{81}------------------------------------------------\n\nImage /page/81/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue, circular shape that is open on the left side. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the lighter blue of the surrounding circle. The circle appears to be a thick line or band that curves around the text, creating a sense of enclosure and unity.\n\nThe Group companies have taken out several insurance policies to cover the risks to which their inventories are subject. It is considered that these policies sufficiently cover such risks.\n\n#### **11.1 Emission allowances**\n\nThe Group recognises emission allowances as inventories.\n\nOn 13 July 2021, an agreement was approved determining the final free allocation of greenhouse gas emission allowances to Spanish entities subject to the allowance trading system for the period 2021-2025. Phase IV of the European Union Emissions Trading Scheme covers the years 2021-2030 and is divided into two allocation periods 2021-2025 and 2026-2030.\n\nThe yearly distribution of the allowances allocated to the Spanish Group companies is detailed below:\n\n| 2021    | 2022    | 2023    | 2024    | 2025    |\n|---------|---------|---------|---------|---------|\n| 195,244 | 195,244 | 195,244 | 195,244 | 195,244 |\n\nThe VDM Metals Group entity also holds CO<sup>2</sup> emission allowances. The allocations obtained by VDM free of charge fall short of the plants' requirements, and it is therefore necessary to acquire allowances on the market. The Company recognises the allowances acquired at acquisition cost and for no consideration under \"grants\". In view of the significant price increase and future forecasts, the Group decided in 2022 to acquire 100% of the rights that it expects to use until 2023, thus hedging against price fluctuations. This purchase was made at very competitive prices and well below quotations in 2023. During the year, the Group has systematically monitored price changes and taken advantage of opportunities to meet its consumption needs for the year ahead. VDM currently has sufficient allowances to cover its 2024 needs.\n\nThe changes in emission allowances in 2023 and 2022 were as follows:\n\n|                         | Number of<br>allowances | Value (in<br>thousands of<br>euros) |\n|-------------------------|-------------------------|-------------------------------------|\n| Balance at 31/12/2021   | 1,292,002               | 34,746                              |\n| Allocation for the year | 223,773                 | 18,692                              |\n| Procurements            | 29,187                  | 1,195                               |\n| Swap                    |                         |                                     |\n| Disposals               | -361,957                | -10,400                             |\n| Balance at 31/12/2022   | 1,183,005               | 44,233                              |\n| Allocation for the year | 224,756                 | 18,680                              |\n| Procurements            | 72,806                  | 4,824                               |\n| Sale                    | -290                    | -6                                  |\n| Disposals               | -305,135                | -12,995                             |\n| Balance at 31/12/2023   | 1,175,142               | 54,736                              |\n\nAs shown in the table, the Group has sufficient surplus rights to cover its long-term needs, so no provision needs to be recorded.\n\n288,939 CO<sup>2</sup> emission allowances were used in 2023, and these allowances will be surrendered to the public authorities in 2024 (2022: 306,680, surrendered in 2023). The Group has not sold its surplus allowances.\n\nThe expense for the year in respect of CO<sup>2</sup> emissions totalled EUR 14,427 thousand in 2023 (2022: EUR 12,699 thousand) and is included under \"other operating expenses\". This expense is equal to the value allocated to the allowances used in the year, which is the market value of these allowances when allocated.\n\nDisposals for the year related to CO<sup>2</sup> emission allowances used in the previous year audited and approved by an independent expert.\n\nGreenhouse gas emissions are verified each year by an ISO 14064-accredited external body. In addition, both Acerinox Europa and VDM are included in the EU Emissions Trading System (EU ETS).\n\n{82}------------------------------------------------\n\nImage /page/82/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word \"ACERINOX\" is in a darker shade of blue than the circle.\n\nDuring this year, CO<sup>2</sup> allowance prices have remained stable at the levels reached in 2022. The increase in the price of allowances last year, from an average price of EUR 25/allowance in 2021 to EUR 80 at the end of 2022, had little impact on the Group as the Spanish plants have sufficient allowances allocated to cover their needs. As described in the accounting policy in **Note 2.13.1**, any increase in the price of rights allocated free of charge will be offset by grant income, thus not affecting the Group's income statement. There were no significant variations this year.\n\nThe Group does not trade in CO<sup>2</sup> emission allowances; it merely acquires those required for internal use, as necessary. The Group does not hold any futures contracts for the acquisition of emission allowances.\n\nThere are no significant contingencies for emission-related fines.\n\n#### <span id=\"page-82-0\"></span>**NOTE 12 – FINANCIAL INSTRUMENTS**\n\n#### **12.1 General considerations**\n\nA financial instrument is a contract that gives rise to a financial asset at one company and, simultaneously, a financial liability or an equity instrument at another. The Group recognises a financial instrument in its consolidated statement of financial position when it becomes party to the contract or legal transaction.\n\n{83}------------------------------------------------\n\n#### **12.2 Categories of financial assets and liabilities**\n\n#### At year-end the Group's financial assets were as follows:\n\n(Amounts in thousands of euros)\n\n| Class                                                     | Long-term financial instruments |      |                 |      |                              |        | Short-term financial instruments |      |                 |      |                              |         |\n|-----------------------------------------------------------|---------------------------------|------|-----------------|------|------------------------------|--------|----------------------------------|------|-----------------|------|------------------------------|---------|\n|                                                           | Equity instruments              |      | Debt securities |      | Loans, derivatives and other |        | Equity instruments               |      | Debt securities |      | Loans, derivatives and other |         |\n| Category                                                  | 2023                            | 2022 | 2023            | 2022 | 2023                         | 2022   | 2023                             | 2022 | 2023            | 2022 | 2023                         | 2022    |\n| Loans and receivables                                     |                                 |      |                 |      | 5,221                        | 4,533  |                                  |      |                 |      | 632,610                      | 642,392 |\n| Held-to-maturity investments                              |                                 |      |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| Equity instruments:                                       |                                 |      |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| - Valued at fair value through other comprehensive income |                                 |      |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| - Valued at cost                                          | 381                             | 394  |                 |      |                              |        |                                  |      |                 |      |                              |         |\n| Assets at fair value through profit or loss               |                                 |      |                 |      | 10                           | 115    |                                  |      |                 |      | 4,351                        | 5,219   |\n| Hedging derivatives                                       |                                 |      |                 |      | 9,000                        | 25,540 |                                  |      |                 |      | 16,995                       | 41,756  |\n| TOTAL                                                     | 381                             | 394  | 0               | 0    | 14,231                       | 30,188 | 0                                | 0    | 0               | 0    | 653,956                      | 689,367 |\n\nAt year-end the Group's financial liabilities were as follows:\n\n(Amounts in thousands of euros)\n\n| Class                                            | Long-term financial instruments |           |                                       |        |                        |        | Short-term financial instruments |         |                                       |       |                        |           |\n|--------------------------------------------------|---------------------------------|-----------|---------------------------------------|--------|------------------------|--------|----------------------------------|---------|---------------------------------------|-------|------------------------|-----------|\n|                                                  | Bank borrowings                 |           | Bonds and other marketable securities |        | Derivatives and others |        | Bank borrowings                  |         | Bonds and other marketable securities |       | Derivatives and others |           |\n| Category                                         | 2023                            | 2022      | 2023                                  | 2022   | 2023                   | 2022   | 2023                             | 2022    | 2023                                  | 2022  | 2023                   | 2022      |\n| Financial liabilities at amortised cost          | 1,291,155                       | 1,319,182 | 74,850                                |        | 18,284                 | 14,777 | 767,147                          | 592,858 | 76,584                                | 1,634 | 1,028,386              | 1,269,353 |\n| Liabilities at fair value through profit or loss |                                 |           |                                       |        | 206                    | 194    |                                  |         |                                       |       | 6,857                  | 12,367    |\n| Hedging derivatives                              |                                 |           |                                       |        | 1,309                  |        |                                  |         |                                       |       | 10,872                 | 12,637    |\n| TOTAL                                            | 1,291,155                       | 1,319,182 | 0                                     | 74,850 | 19,799                 | 14,971 | 767,147                          | 592,858 | 76,584                                | 1,634 | 1,046,115              | 1,294,357 |\n\n{84}------------------------------------------------\n\nImage /page/84/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the word. The word \"ACERINOX\" is in a bold, sans-serif font.\n\n#### **12.2.1 Financial assets at amortised cost**\n\nThe detail of the financial assets measured at amortised cost at 31 December is as follows:\n\n(Amounts in thousands of euros)\n\n|                                    | 2023    | 2022    |\n|------------------------------------|---------|---------|\n| Customers                          | 560,002 | 575,036 |\n| Debts with personnel               | 1,624   | 1,737   |\n| Public Administrations             | 17,190  | 33,252  |\n| Other debtors                      | 29,426  | 17,685  |\n| Accruals and deferrals             | 22,139  | 14,990  |\n| Deposits and bonds                 | 69      | 103     |\n| Other financial assets             | 6,267   | 4,457   |\n| Write-downs of uncollectible debts | -4,107  | -4,868  |\n| TOTAL                              | 632,610 | 642,392 |\n\nThe amount recognised as tax receivables from Public Administrations relates mainly to VAT settlements.\n\nDuring the year, variations have not been significant, as activity levels have remained similar to those of the last quarter of the previous year.\n\nAs explained in the accounting policies, the Group measures accounts receivable at their transaction price, provided that they do not have a significant financial component, they are expected to be received in the short-term and the effect of not discounting the cash flows is not material. The Group does not have any non-current balances receivable.\n\nWrite-downs of uncollectible debts relate in full to trade receivables. The changes therein were as follows:\n\n| (Amounts in thousands of euros) |       |        |\n|---------------------------------|-------|--------|\n|                                 | 2023  | 2022   |\n| Opening balance                 | 4,868 | 5,051  |\n| Allocation                      | 543   | 86     |\n| Application                     | -706  | -17    |\n| Reversion                       | -533  | -1,111 |\n| Translation differences         | -65   | 24     |\n| Balance as of 31 December       | 4,107 | 4,86   |\n\nChanges in the balance of valuation adjustments are included under \"other operating expenses\" on the statement of profit and loss.\n\nNo interest was earned on impaired financial assets in 2023 or 2022.\n\nNo valuation adjustments were recognised for uncollectible receivables from related parties in 2023 or 2022.\n\nAt 31 December 2023, certain Group companies had receivables amounting to EUR 297,025 thousand factored on a nonrecourse basis to banks in exchange for cash (2022: EUR 329,327 thousand). The factored amounts were derecognised as they met the conditions specified in IFRS 9 regarding the transfer of risks and rewards.\n\n**Note 12.2.3** includes a detail of the Group's factoring lines.\n\n#### **12.2.2 Trade and other payables**\n\nThe detail of \"trade and other payables\" in the consolidated statements of financial position as at 31 December 2023 and 2022 is as follows:\n\n{85}------------------------------------------------\n\nImage /page/85/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The text is positioned within a partial blue circle that curves around the right side and bottom of the word. The background is white.\n\n(Amounts in thousands of euros)\n\n|                                               | 2023    | 2022      |\n|-----------------------------------------------|---------|-----------|\n| Suppliers and creditors for services rendered | 794,921 | 1,021,284 |\n| Debts with personnel                          | 73,868  | 74,782    |\n| Suppliers of fixed assets                     | 19,794  | 21,342    |\n| Taxes and Social Security                     | 34,646  | 33,876    |\n| Other creditors                               | 7,462   | 7,529     |\n| Current provisions                            | 20,427  | 22,627    |\n| TOTAL                                         | 951,118 | 1,181,440 |\n\nMost of the amount included under tax and social security payables relates to amounts payable for VAT settlements and personal income tax withholdings. EUR 4,565 thousand relate to social security payables (2022: EUR 4,131 thousand).\n\nAs with customers, the decrease in suppliers and service creditors is mainly due to lower activity this year, lower raw material prices and lower payment terms for suppliers in the area of high-performance alloys due to the diversification of suppliers, which eliminates dependence on raw material sources from Russia.\n\nWith regard to the average payment period, as established in Law 18/2022 of 29 September on the establishment and growth of companies the Group breaks down below the average payment period for suppliers, the volume of money and the number of invoices paid in a period lower than the maximum established in the regulations on late payments, as well as the percentage of these invoices in the total number of invoices and in the total amount of money paid to their suppliers for the Group's Spanish companies included in the scope of consolidation.\n\nThe following table includes the average payment period to domestic and foreign suppliers of the Spanish companies that form part of the Acerinox Group, after deducting payments made to Group companies:\n\n|                                       | 2023      | 2022      |\n|---------------------------------------|-----------|-----------|\n|                                       | Days      | Days      |\n| Average supplier payment period       | 64 days   | 63 days   |\n| Ration of operations settled          | 62 days   | 62 days   |\n| Ratio of transactions pending payment | 81 days   | 80 days   |\n|                                       | Amount    | Amount    |\n| Total payments made                   | 2,363,976 | 2,384,319 |\n| Total outstanding payments            | 189,493   | 189,759   |\n\nDetails of the volume and number of invoices paid are as follows:\n\n|                                                                                                                                         | 2023      | 2022      |\n|-----------------------------------------------------------------------------------------------------------------------------------------|-----------|-----------|\n| a) Monetary volume of invoices paid within a period equal to or less than the maximum established in the<br>regulations on late payment | 1,114,046 | 1,129,490 |\n| Percentage share of total number of invoices of payments to its suppliers                                                               | 47 %      | 47 %      |\n| b) Number of invoices paid within a period equal to or less than the maximum period established in the late<br>payment regulations      | 23,427    | 22,172    |\n| Percentage share of total monetary payments to its suppliers                                                                            | 41 %      | 40 %      |\n\nThe table includes, the same as above, the payments made to any supplier, whether domestic or foreign, and excludes Group companies.\n\n#### **12.2.3 Bank borrowings and bonds issued**\n\nThe detail of the financial debt line items in the consolidated statements of financial position as at 31 December 2023 and 2022, including both bank borrowings and bonds issued by the Group in the year, is as follows:\n\n(Amounts in thousands of euros)\n\n|                                | Non-current |           | Current |         |\n|--------------------------------|-------------|-----------|---------|---------|\n|                                | 2023        | 2022      | 2023    | 2022    |\n| Bonds issued                   |             | 74,850    | 76,584  | 1,634   |\n| Loans from credit institutions | 1,291,156   | 1,319,182 | 767,147 | 592,858 |\n| Total non-current debt         | 1,291,156   | 1,394,032 | 843,731 | 594,492 |\n\n{86}------------------------------------------------\n\nImage /page/86/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font. The word is positioned inside a blue circle that is open on the left side.\n\nThere is currently a private placement of EUR 75 million performed by Deutsche Bank AG, London Branch in July 2014, which has a term of ten years.\n\nThe detail of the maturity of the outstanding debt at 31 December 2023 is as follows:\n\n(Amounts in thousands of euros)\n\n|                      | 2024    | 2025    | 2026    | 2027    | 2028 and<br>thereafter | TOTAL     |\n|----------------------|---------|---------|---------|---------|------------------------|-----------|\n| Financial debts      | 843,731 | 521,323 | 400,771 | 260,587 | 108,475                | 2,134,887 |\n| Total financial debt | 843,731 | 521,323 | 400,771 | 260,587 | 108,475                | 2,134,887 |\n\nThe 2022 figures were as follows:\n\n(Amounts in thousands of euros)\n\n|                      | 2023    | 2024    | 2025    | 2026    | 2027 and<br>thereafter | TOTAL     |\n|----------------------|---------|---------|---------|---------|------------------------|-----------|\n| Financial debts      | 594,492 | 258,271 | 471,171 | 398,271 | 266,319                | 1,988,524 |\n| Total financial debt | 594,492 | 258,271 | 471,171 | 398,271 | 266,319                | 1,988,524 |\n\nThe breakdown of the debt by currency is as follows:\n\n(Amounts in thousands of euros)\n\n|       | Non-current payables |           | Current liabilities |         |\n|-------|----------------------|-----------|---------------------|---------|\n|       | 2023                 | 2022      | 2023                | 2022    |\n| EUR   | 1,291,156            | 1,394,032 | 625,054             | 476,017 |\n| USD   |                      |           | 122,448             | 43,667  |\n| ZAR   |                      |           | 96,229              | 74,808  |\n| TOTAL | 1,291,156            | 1,394,032 | 843,731             | 594,492 |\n\nThe breakdown of the debt by interest rate is as follows:\n\n(Amounts in thousands of euros)\n\n|          | Non-current payables |           | Current liabilities |         |\n|----------|----------------------|-----------|---------------------|---------|\n|          | 2023                 | 2022      | 2023                | 2022    |\n| Fixed    | 483,753              | 665,523   | 181,771             | 67,637  |\n| Variable | 807,403              | 728,509   | 661,960             | 526,855 |\n| TOTAL    | 1,291,156            | 1,394,032 | 843,731             | 594,492 |\n\nFixed-rate debt solely includes borrowings originally arranged at fixed rates (bank loans and private placements) and does not include borrowings for which interest rates have been fixed by arranging derivatives.\n\nThere are swap contracts to hedge the interest rate for EUR 430 million of the variable rate debt (**Note 12.2.6**).\n\nThe fair value of fixed-rate bank borrowings and private placements was EUR 665,523 thousand at 31 December 2023, and their carrying amount was EUR 650,865 thousand. The fair value of these borrowings at 31 December 2022 amounted to EUR 702,010 thousand (carrying amount of EUR 733,160 thousand).\n\nFor the determination of fair value, the Group has taken into account observable market variables such as interest rate curves, the term of the loans, etc., so the determination of fair value is classified within the LEVEL 2 hierarchy in accordance with the policy established in **Note 2.12.5**.\n\nThe interest rates of the floating-rate loans are reviewed at least once a year.\n\nThe weighted average cost of the financing instruments in euros (including interest rate hedges) at the end of 2023 was 2.77% for a total of EUR 1,916 million, 7.37% for USD 135.3 million of financing and 11% for ZAR 1,976 million of financing. In 2022, the cost of the loans (including the interest rate hedges) in euros was 1.69% for an amount of EUR 1,870 million, 6.30% for USD 46.5 million and 9.34% for ZAR 1,358 million of financing.\n\n{87}------------------------------------------------\n\nImage /page/87/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle that is not fully closed, creating a crescent shape around the text. The overall design is simple and corporate, with a focus on the company name.\n\nAt 31 December 2023, accrued interest payable on bank borrowings amounted to EUR 11,081 thousand (2022: EUR 6,164 thousand). In addition, accrued interest payable on bonds issued amounted to EUR 1,634 thousand at 2023 year-end (2022 year-end: EUR 1,634 thousand).\n\nThe total borrowing costs calculated using the effective interest rate on long-term loans at amortised cost amounted to EUR 871 thousand (2022: EUR 1,465 thousand).\n\nAt 31 December 2023, the Acerinox Group had arranged bank financing facilities and private placements amounting to EUR 2,807 million (31 December 2022: EUR 2,786 million), in addition to approved non-recourse factoring facilities amounting to EUR 530 million (31 December 2022: EUR 480 million). The amount drawn down on financing facilities at 31 December 2023 amounted to EUR 2,135 million (31 December 2022: EUR 1,989 million) and EUR 297 million on factoring facilities (31 December 2022: 329 million).\n\nCertain Group companies have arranged reverse factoring facilities with various banks to manage payments to suppliers. Trade payables payment of which is managed by the banks are recognised under \"trade and other payables\" until the related obligation is discharged or cancelled or expires. The Group uses reverse factoring solely as a payment instrument, but offers its suppliers the possibility of obtaining financing through such instruments. As far as the Acerinox Group is concerned, invoices are paid when they fall due. In some specific cases, where an extension of the payment term has been agreed with the financial company, the debt is classified as other financial liabilities. In this financial year, the Group did not reclassify any amounts as there was no extension of payments (2022: EUR 13,113 thousand).\n\n#### **Main financing transactions undertaken in the year**\n\nThe most significant financing transactions in 2023 were as follows:\n\n- Signing of the Syndicated Factoring contract in Spain between several subsidiaries of the Acerinox Group, including, for the first time, VDM Metals International as the new transferor, and Unicaja as the new transferee from among the existing ones (Abanca, BBVA, Banca March, Banco Sabadell, Bankinter, Banque Marocaine du Commerce Extérieur International, Caixabank and Santander Factoring and Confirming) for a total amount of EUR 380 million until 2025. The agent and structuring agent for the transaction continues to be Santander Factoring and Confirming\n- In August 2023, the \"Borrowing Base Facility\" contract of Columbus Stainless Pty Ltd. in South Africa was restructured and extended for ZAR 3,500 million. This deal, originally signed in April 2015 and renewed in 2017 for a further two and a half years, and in 2019 for a further three and a half years, has been extended to 2027, including some modifications to its structure to provide Columbus with greater flexibility. Participating entities include Deutsche Bank AG, Johannesburg Branch, Bankinter S.A., Banco Bilbao Vizcaya Argentaria S.A., FirstRand Bank Limited, Banco Santander S.A., Banco de Sabadell S.A. London Branch, Caixabank S.A., Investec Bank Limited, Nedbank Limited and HSBC Bank Plc Johannesburg. The agent and Co-ordinating Mandated Lead Arranger for the transaction continues to be Deutsche Bank AG, Amsterdam Branch\n- In order to ensure continued Group liquidity, credit facilities were renewed in both euros (EUR 301 million) and dollars (USD 135 million)\n- Signing of four new long-term floating rate loans in Spain for a total amount of EUR 105 million with: Kutxabank (EUR 15 million), Intesa Sanpaolo (EUR 65 million), Caja rural del Sur (EUR 10 million) and Banca March (EUR 15 million)\n- In addition, Acerinox Europa has signed a one-year floating-rate loan with BBVA for EUR 50 million\n- VDM has extended the maturity of five bilateral financing facilities for an additional year until 2025 with HSBC, Unicredit, BBVA, Santander and Caixabank for a total maximum amount of EUR 210 million. In addition, it has extended the long-term loan contracted with Intesa Sanpaolo in the amount of EUR 30 million until the end of 2024.\n- Increase in Bahru's short-term financing facilities (credit facilities and revolving credit facilities) to a maximum of USD 145 million.\n\nRegarding debt renegotiations, the Group assessed the significance of the modifications made to determine whether they were substantially different, in accordance with the criteria established in the accounting policy defined in **Note 2.12.3**, and, where\n\n{88}------------------------------------------------\n\nImage /page/88/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, leaving a small gap at the top. The word \"ACERINOX\" is in a dark color, likely black or a very dark blue, which contrasts with the white background.\n\nappropriate, determine whether to recognise the effects of certain of the new agreements as an extinguishment and the simultaneous recognition of a new loan. No debt refinancing took place during the year. In 2022, the amount of fees and commissions recognised in income in this connection amounted to EUR 557 thousand.\n\nThe most noteworthy financing transactions in 2022 were as follows:\n\n- In order to ensure continued Group liquidity, the following transactions were carried out:\n\t- The renewal of credit facilities in euros for a total amount of EUR 256 million, increasing the amount of some of them by EUR 55 million\n\t- Signing of three new euro credit facilities totalling EUR 45 million with Abanca, Unicaja and Cajamar Caja Rural\n\t- Signing of new credit facilities in US dollars and renewal of existing ones for a total amount of USD 135 million\n- Novation of the loan signed in 2020 with Caixabank for EUR 80 million, with final maturity in 2025, increasing the capital to EUR 260 million and extending its final maturity to 2027. To this end, the two loans signed with Bankia and Caixabank for amounts of EUR 160 million and EUR 50 million, respectively, with final maturity in 2024, have been cancelled\n- Signing of five new long-term loans: a fixed-rate loan of EUR 50 million with Unicredit with a final maturity of 4 years and four variable-rate loans, one with Abanca for EUR 40 million with a final maturity of 4 years; another with Bankinter for a total amount of EUR 25 million with a final maturity of 3 years; another with Kutxabank for EUR 15 million with a final maturity of 4 years; and another with Banca March for EUR 15 million with a final maturity of 5 years\n- Signing of seven bilateral financing facilities for VDM with HSBC, Banco Santander, Caixabank, Deutsche Bank, Helaba, Unicredit and BBVA for a maximum amount of up to EUR 290 million and a long-term loan with IKB for a total amount of EUR 50 million. All of these transactions replaced the syndicated revolving credit facility, which expired in 2022, and the financial covenants linked to the development of the company's results were cancelled\n- Renegotiation of the long-term loan of EUR 60 million arranged with Banco de Crédito Social Cooperativo, whereby the conditions were improved by increasing the loan principal by EUR 20 million and extending the final maturity to 2026\n- Increase in the financing facilities for the issuance of import letters of credit by more than EUR 100 million.\n\nThe Acerinox Group has satisfactorily met the repayment schedules for its borrowings.\n\nThe detail of the changes in non-current bank borrowings, not including bond issues, is as follows:\n\n(Amounts in thousands of euros)\n\n|                                          | Non-current payables |           | Current liabilities |          |\n|------------------------------------------|----------------------|-----------|---------------------|----------|\n|                                          | 2023                 | 2022      | 2023                | 2022     |\n| Opening balance                          | 1,319,182            | 1,293,494 | 592,858             | 483,271  |\n| Additions                                | 138,203              | 663,456   | 250,993             | 364,417  |\n| Debt repayment                           | -16,214              | -448,869  | -224,839            | -453,495 |\n| Interest at amortised cost               | 871                  | 1,465     | 4,998               | 4,403    |\n| Short-term transfers                     | -152,923             | -193,952  | 152,923             | 193,952  |\n| Transfers of other financial liabilities | 2,037                |           |                     |          |\n| Translation differences and others       |                      | 3,588     | -9,786              | 310      |\n| Balance as of 31 December                | 1,291,156            | 1,319,182 | 767,147             | 592,858  |\n\nThe reconciliation of the changes in non-current and current borrowings to the consolidated statement of cash flows is as follows:\n\n• The detail of income from borrowings recognised in the consolidated statement of cash flows is as follows:\n\n(Amounts in thousands of euros)\n\n{89}------------------------------------------------\n\nImage /page/89/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, dark blue letters. The letters are slightly slanted to the right. The word is enclosed within a partial circle, also in dark blue, that surrounds the top and sides of the word. The bottom of the circle is open.\n\n|                                  | 2023    | 2022      |\n|----------------------------------|---------|-----------|\n| Capital grants                   | 328     | -3        |\n| Long-term bank borrowings        | 138,202 | 663,456   |\n| Short-term bank borrowings       | 250,993 | 364,417   |\n| Other debts (capital leases)     | 3,164   | 870       |\n| Total income from borrowed funds | 392,687 | 1,028,740 |\n\n• The breakdown of the debt repayments recognised in the consolidated statement of cash flows is as follows:\n\n| (Amounts in thousands of euros) |\n|---------------------------------|\n|---------------------------------|\n\n|                                                 | 2023     | 2022     |\n|-------------------------------------------------|----------|----------|\n| Long-term bank borrowings                       | -16,214  | -448,869 |\n| Short-term bank borrowings                      | -224,839 | -453,495 |\n| Other debts (capital leases)                    | -5,554   | -6,557   |\n| Total repayment of interest-bearing liabilities | -246,607 | -908,921 |\n\n**Non-current borrowings subject to achievement of ratios**\n\n*Currently, no loan agreement entered into by the Acerinox Group contains covenants linked to ratios related to the Group's results.* The contracts subject to covenants are generally related to own funds, either of the consolidated group or own funds of the borrower and are detailed below:\n\n#### **a) Acerinox, S.A.:**\n\nThe EUR 260 million loan novated in the first half of 2022 with Caixabank and the two loans of EUR 80 million each signed with BBVA and ICO in the first half of 2020 for the acquisition of VDM are subject to compliance with the financial ratios relating to the maintenance of minimum equity levels at the consolidated level.\n\nIn addition to these three loans, there are three other financing contracts conditional on compliance with covenants also referring to the maintenance of minimum levels of own funds at consolidated level. The loan arranged in March 2017 and novated in December 2021 with Banca March for EUR 50 million and assigned to a Securitisation Fund upon arrangement, the loan arranged with the European Investment Bank (\"EIB\") in December 2017 for EUR 70 million and the loan arranged in March 2018 with the Instituto de Crédito Oficial (\"ICO\") for EUR 100 million. This type of covenant is standard market practice in financing with these maturities, as the loan arranged with Banca March had an initial term of seven years, the EIB loan of ten years and the ICO loan of eight years.\n\n#### **b) Columbus Stainless (PTY) LTD:**\n\nAdditionally, the Group company Columbus Stainless has structured financing (a Borrowing Base Facility) which is also subject to the achievement of a covenant relating to the maintenance of minimum equity levels at that Company. This financing facility is recognised under \"bank borrowings\" in the consolidated statement of financial position at the amount drawn down. At 31 December 2023, the amount drawn down from this financing amounts to ZAR 1,976 million (around EUR 97 million at the exchange rate of 31 December 2023). At 2022 year-end, ZAR 1,358 million had been drawn down from this credit facility.\n\n#### **c) VDM Group:**\n\nFinally, it should be noted that the eight bilateral financing facilities signed by VDM (both the long-term loan with IKB and the seven financing lines signed with HSBC, Banco Santander, Caixabank, Deutsche Bank, Helaba, Unicredit and BBVA) are subject to compliance with minimum equity ratios and a ratio of net financial debt to working capital.\n\nAt 2023 year-end (as in 2022), Acerinox, S.A., Columbus Stainless (PTY) Ltd. and the VDM Group had achieved all the covenants required under the aforementioned agreements with a considerable margin.\n\n#### **12.2.4 Fair value measurement**\n\nAs established in the accounting policies, the Group measures the following assets at fair value: financial assets classified at fair value through other comprehensive income and derivative financial instruments.\n\nFinancial instruments recognised at fair value are classified, based on the valuation inputs, in the following hierarchies:/\n\n LEVEL 1: quoted prices in active markets LEVEL 2: observable market variables other than quoted prices\n\n{90}------------------------------------------------\n\nImage /page/90/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is blue. The text is positioned inside a blue circle that is open at the top.\n\n#### LEVEL 3: variables not observable in the market\n\nThe Group's position at 31 December 2023 and 2022 was as follows:\n\n(Amounts in thousands of euros)\n\n|                                     | 2023    |         |         | 2022    |         |         |\n|-------------------------------------|---------|---------|---------|---------|---------|---------|\n|                                     | LEVEL 1 | LEVEL 2 | LEVEL 3 | LEVEL 1 | LEVEL 2 | LEVEL 3 |\n| Financial derivatives (assets)      |         | 30,356  |         |         | 72,630  |         |\n| TOTAL                               | 0       | 30,356  | 0       | 0       | 72,630  | 0       |\n|                                     | LEVEL 1 | LEVEL 2 | LEVEL 3 | LEVEL 1 | LEVEL 2 | LEVEL 3 |\n| Financial derivatives (liabilities) |         | 19,244  |         |         | 25,198  |         |\n\nNo financial assets or financial liabilities measured at fair value were transferred between levels.\n\nIn the case of Level 2 financial instruments, the Group uses generally accepted valuation techniques that take into account spot and future exchange rates at the measurement date, forward interest rates, interest rate spreads and credit risk of both the Group and its counterparty, i.e. the financial institutions with which it operates. In determining the fair values of commodity future contracts quoted on the LME (London Metal Exchange), the Group takes into account the difference between the future prices quoted on the LME for the commodity at the contracted maturity date and the future price set in each contract.\n\n#### **12.2.5 Financial assets at fair value through other comprehensive income**\n\nThis section includes the shares that the Group does not intend to sell and that it had designated in this category on initial recognition.\n\nThe value of financial assets at fair value through other comprehensive income at year-end amounted to EUR 381 thousand (31 December 2022: EUR 394 thousand).\n\nThe Group has classified in this category its 8.48% minority shareholding in the company Fortia Energía, S.L., whose corporate purpose is the acquisition of electricity on behalf of its shareholders. This investment enables the Group's Spanish factories to obtain more competitive electricity prices. The investment is measured at acquisition cost, as there are insufficient data to measure it at fair value. The Group has no control over this entity. The acquisition cost of the investment was EUR 276 thousand. The Group does not consider that there are any indications of impairment in this connection.\n\nThis category also includes the investment made by Columbus, Pty. Ltd in the entity Nimawize Pty Ltd. Columbus acquired a 20% stake in 2020 in compliance with the requirements of the Broad-Based Black Economic Empowerment (B-BBEE Act 53 of 2023). Columbus does not exercise any control over this entity.\n\nOn 7 July 2022, the Group sold its shares in the listed Japanese company Nippon Steel & Sumitomo Metal Corporation for EUR 10,157 thousand. Acerinox, S.A. held 747,346 shares in this company, which represented a scantly significant percentage of ownership in the Japanese Group. The shares, prior to their sale, were valued at fair value. As they are classified as assets at fair value through other comprehensive income, the gains on their sale amounting to EUR 1,070 thousand were classified through equity. The revaluation, recognised in other comprehensive income until its sale, amounted to EUR -572 thousand.\n\n#### **12.2.6 Derivative financial instruments**\n\nAs detailed in **Note 4**, in relation to market risk, the Group is essentially exposed to the following three types of risk in the course of its business activities: foreign currency risk, interest rate risk and raw material price risk. The Group uses derivative financial instruments to hedge its exposure to certain risks.\n\nThe Group classifies derivative financial instruments that do not qualify for hedge accounting in the category of assets and liabilities measured at fair value through profit or loss. Those that qualify as hedging instruments are classified as hedging derivatives and are accounted for by applying the accounting policy defined in **Note 2.12.4**.\n\n{91}------------------------------------------------\n\nImage /page/91/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters slightly slanted to the right. The word is positioned inside a blue circle that is not fully closed, creating a crescent shape around the text. The blue color of the circle is a deep, saturated shade.\n\nThe detail of the derivative financial instruments, classified by category, is as follows:\n\n| (Amounts in thousands of euros)                  |        |             |        |             |\n|--------------------------------------------------|--------|-------------|--------|-------------|\n|                                                  | 2023   |             | 2022   |             |\n|                                                  | Assets | Liabilities | Assets | Liabilities |\n| Hedging derivatives                              | 25,995 | 12,181      | 67,296 | 12,637      |\n| Derivatives at fair value through profit or loss | 4,361  | 7,063       | 5,334  | 12,561      |\n| TOTAL                                            | 30,356 | 19,244      | 72,630 | 25,198      |\n\nThe following table provides a breakdown of the Group's derivative financial instruments at 31 December 2023 and 2022 by type of hedged risk:\n\n(Amounts in thousands of euros)\n\n|                             | 2023   |             | 2022   |             |\n|-----------------------------|--------|-------------|--------|-------------|\n|                             | Assets | Liabilities | Assets | Liabilities |\n| Currency forwards           | 4,361  | 7,063       | 5,331  | 12,561      |\n| Interest rate swaps         | 21,358 |             | 34,305 |             |\n| Commodity futures contracts | 4,637  | 12,181      | 32,994 | 12,637      |\n| TOTAL                       | 30,356 | 19,244      | 72,630 | 25,198      |\n\n#### **Foreign currency risk**\n\nThe Group operates in a large number of countries and bills customers in various currencies, depending on the country where it is billing. It therefore arranges certain financial instruments to hedge cash flow risks arising from the settlement of balances in foreign currencies. The transactions arranged consist mainly of foreign currency purchase and sale forward contracts.\n\nThe Group uses derivative financial instruments to hedge most of its commercial and financial transactions performed in currencies other than the functional currency of each country.\n\nThe Company's business model is to hedge foreign currency risk through the use of derivative financial instruments and there is an economic relationship between the hedged item and the hedging instrument. The Group classifies most of its foreign exchange insurance contracts in the category of financial instruments at fair value through profit or loss.\n\nUsing these instruments ensures that any fluctuation in exchange rates that could affect assets or liabilities denominated in foreign currency would be offset by a change of the same amount in the derivative arranged. Changes in the derivative are recognised in profit or loss, offsetting any changes that occur in foreign currency monetary items. As these derivatives do not qualify as cash flow hedging instruments for accounting purposes, the revaluation of these derivatives is recorded in the consolidated statement of profit or loss \"revaluation of financial instruments at fair value\".\n\nAt 31 December 2023, the effect on profit or loss of measuring these derivatives at market value was positive, amounting to EUR 317 thousand (2022: EUR -3,141 thousand). The positive exchange differences of the Group in the year amounted to EUR 2,273 thousand (2022: loss of EUR -4,624 thousand). The differences between the two amounts are mainly due to the interest rate differences between the currencies involved in the exchange rate insurance taken out and the differences between the insurance taken out and the monetary items in foreign currency.\n\nAt 31 December 2023, all the currency forwards covered mainly receivables (assets) and payables (liabilities) and related to both commercial and financing transactions between Group companies. At 31 December 2023, the fair value of the Group's currency forwards totalled EUR -2,702 thousand (2022: EUR -7,230 thousand), of which EUR 4,361 thousand were recognised under assets (2022: EUR 5,331 thousand) and EUR 7,063 thousand under liabilities (2022: EUR 12,561 thousand). None of those currency forwards were accounted for as hedges at the end of 2023 or 2022. In 2023, EUR -159 thousand were transferred from the consolidated statement of comprehensive income to profit or loss for the year (2022: EUR -165 thousand).\n\nThe vast majority of the Group's foreign currency purchase and sale forward contracts have a term of less than one year.\n\nAt 31 December 2023, the Group had used contracts for foreign currency transactions amounting to EUR 563 million for foreign currency sales and EUR 281 million for foreign currency purchases. At 31 December 2022, EUR 479 million were used for foreign currency sales and EUR 335 million for foreign currency purchases. The detail of these foreign currency forward contracts, by currency, is as follows:\n\n{92}------------------------------------------------\n\nImage /page/92/Picture/1 description: The image features the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters. The word is positioned inside of a thick, blue circle.\n\n(Amounts in thousands)\n\n|     | 2023      |             | 2022      |             |\n|-----|-----------|-------------|-----------|-------------|\n|     | Assets    | Liabilities | Assets    | Liabilities |\n| USD | 434,472   | 268,322     | 301,791   | 338,897     |\n| EUR | 36,834    | 9,573       | 36,886    | 2,947       |\n| GBP | 44,345    | 11,542      | 55,205    | 1,790       |\n| SEK | 7,146     |             |           |             |\n| CAD | 11,372    | 4,001       | 7,807     |             |\n| AUD | 11,383    | 843         | 10,281    |             |\n| NZD | 123       | 0           | 315       |             |\n| JPY | 6,170,016 | 552,377     | 7,116,614 | 254,207     |\n| MYR | 144,700   | 0           | 138,690   |             |\n| KRW |           | 6,863,736   |           | 1,900,754   |\n\nAt 31 December 2023 and 2022, there were no bank borrowings in currencies other than the functional currency and, therefore, the Group no longer has any derivative financial instruments to hedge exposure to foreign currency risk or interest rate risk.\n\n#### **Interest rate risk**\n\nThe Group enters into interest rate derivatives to hedge floating rate cash flows from debt instruments. As Acerinox's risk management strategy allows for the exchange of hedging instruments and hedged items to meet corporate financing needs, the Group has documented the effectiveness of hedging through the contracted financial instruments so that they can be qualified for accounting purposes as cash flow hedging instruments through the designation of generic hedging relationships.\n\nThe swaps entered into by the Group as at 31 December 2023 are as follows:\n\n|                             | Notional contracted | Amount outstanding | Expiration |\n|-----------------------------|---------------------|--------------------|------------|\n| From variable to fixed rate | EUR 70 million      | EUR 50 million     | 2028       |\n| From variable to fixed rate | EUR 100 million     | EUR 50 million     | 2026       |\n| From variable to fixed rate | EUR 80 million      | EUR 70 million     | 2028       |\n| From variable to fixed rate | EUR 260 million     | EUR 260 million    | 2027       |\n\nThe average interest rate of euro-denominated financing hedged by an interest rate hedging derivative, totalling EUR 430 million at year-end, was 1.70% (2022: 1.72%). The credit spread on these borrowings is included in both cases.\n\nBy the end of 2023 and 2022 there is no interest rate hedge in a currency other than the euro.\n\nAs explained in **Note 4.1.2**, during 2023 the Group has not entered into any new swap transactions.\n\nIn 2022, the Group entered into an interest rate derivative with Caixabank for a total amount of EUR 260 million and a final maturity date of 2027 to hedge the highly probable future cash flows related to the floating interest rate and any change in this interest rate that may occur before the maturity date. In addition, three interest rate swaps were cancelled, following the novation of the loan signed in 2020 with Caixabank for EUR 80 million and final maturity in 2025 and the cancellation of the two loans signed with Bankia and Caixabank for a total amount of EUR 160 million and EUR 50 million, respectively. Given that the Group's hedging policy is through the designation of generic hedges, the amount accumulated in equity due to the cancellation of the derivatives and the contracting of the new derivative did not have any impact on the income statement.\n\nThe detail at 31 December 2022 was as follows:\n\n|                             | Notional contracted | Amount outstanding | Expiration |\n|-----------------------------|---------------------|--------------------|------------|\n| From variable to fixed rate | EUR 30 million      | EUR 15 million     | 2023       |\n| From variable to fixed rate | EUR 70 million      | EUR 60 million     | 2028       |\n| From variable to fixed rate | EUR 100 million     | EUR 70 million     | 2026       |\n| From variable to fixed rate | EUR 80 million      | EUR 75 million     | 2028       |\n| From variable to fixed rate | EUR 260 million     | EUR 260 million    | 2027       |\n\n{93}------------------------------------------------\n\nImage /page/93/Picture/1 description: The image features the logo of Acerinox, a multinational steel manufacturing corporation. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The text is positioned within a blue circle, which appears to be a thick ring. The background of the image is plain white, providing a clear contrast to the blue logo.\n\nThe fair value of the interest rate swaps was based on the market value of equivalent derivative financial instruments at the reporting date and amounted to EUR 21,358 thousand (31 December 2022: EUR 34,305 thousand). These amounts are recognised in the Group's consolidated statement of financial position under the following line items:\n\n|                             | 2023    |             | 2022    |             |\n|-----------------------------|---------|-------------|---------|-------------|\n|                             | Current | Non-current | Current | Non-current |\n| Other financial assets      | 12,367  | 8,991       | 9,051   | 25,254      |\n| Other financial liabilities |         |             |         |             |\n\nThe Group assesses whether outstanding hedging relationships meet the effectiveness requirements both at the date of designation and at year-end. At 31 December 2023 and 2022, all outstanding interest rate derivatives arranged qualified as cash flow hedging instruments and, therefore, the unrealised gains and losses in the amount of EUR -3,821 thousand, on their measurement at fair value were recognised in the consolidated statement of comprehensive income (2022: EUR 35,184 thousand). The Group has documented the effectiveness of the derivatives arranged to be recognised as hedging instruments, as detailed in **Note 2.12.4.** The financial instruments considered to be hedges were not ineffective at any point in 2023 or 2022.\n\nIn 2023, EUR -12,175 thousand were transferred from the consolidated statement of comprehensive income to profit or loss for the year, reducing borrowing costs (2022: EUR 2,494 thousand). Combined with the EUR -159 thousand arising from the foreign currency hedges referred to in the previous section and the EUR -20,068 thousand from the raw material derivatives, the amount totalled EUR -32,402 thousand and was included in the consolidated statement of comprehensive income. In 2022, the transfer amount from comprehensive income related to interest rate hedges would need to include EUR -165 thousand from currency hedges and EUR -4,105 thousand from raw material derivatives. This totals EUR -1,776 thousand in the consolidated statement of comprehensive income for 2022.\n\n#### **Risk of changes in raw material prices**\n\nAs detailed in **Note 4.1.3**, high-performance alloys have a high metal content and are mainly composed of nickel, but they also contain other metals that are listed on the London Metal Exchange (LME). The Group, and mainly this division within it, is exposed to the risk of raw material price volatility, since it is unable to pass these fluctuations on to the customers through the selling price. For this reason, it uses derivative financial instruments to guarantee set prices for its customers and ensure that those prices are aligned with its costs, thus maintaining margins. The financial instruments used are based on arranging futures contracts on the prices listed on the LME.\n\nThe Group documents the hedging relationships and has a model that guarantees the effectiveness of the hedges.\n\nThe detail of the nominal values of the purchase and sale futures contracts arranged by the Group at year-end and the fair value measurement thereof is as follows:\n\n|          | 2023    |                                 |                                      | 2022    |                                 |                                      |\n|----------|---------|---------------------------------|--------------------------------------|---------|---------------------------------|--------------------------------------|\n|          | Nominal | Derivative fair value<br>Assets | Derivative fair value<br>Liabilities | Nominal | Derivative fair value<br>Assets | Derivative fair value<br>Liabilities |\n| Purchase | 142,956 | 158                             | 12,156                               | 180,265 | 31,949                          | 194                                  |\n| Sale     | 42,483  | 4,480                           | 25                                   | 80,275  | 1,044                           | 12,443                               |\n| TOTAL    |         | 4,638                           | 12,181                               |         | 32,994                          | 12,637                               |\n\n(Amounts in thousands of euros)\n\nAll the assets and liabilities arising from derivative financial instruments in this category are current, except for the EUR 9 thousand included as non-current financial assets in the consolidated statement of financial position and EUR 1,309 thousand recorded as non-current liabilities (2022: EUR 286 thousand).\n\nAt year-end all financial instruments contracted to hedge this risk meet the conditions to be considered as cash flow hedging instruments. As of 31 December 2022, of the total financial instruments contracted to hedge this risk, EUR 20,353 thousand met the conditions to be considered as cash flow hedging instruments and EUR 4 thousand were recorded at fair value through profit or loss as they are instruments contracted prior to the start of the documentation of the hedging relationships. As of 31 December 2023, unrealised gains and losses arising from the valuation at fair value and charged to the consolidated statement of comprehensive income amount to EUR -7,829 thousand. The amount transferred from the consolidated statement of comprehensive income to the profit for the year for these hedges is EUR -20,068 thousand (in 2022, the unrealised gains and losses from fair value measurement recognised in the consolidated statement of comprehensive income\n\n{94}------------------------------------------------\n\nImage /page/94/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, stacked vertically, and enclosed within a blue circle that is open at the top.\n\namounted to EUR 20,316 thousand and the amount transferred from the consolidated statement of comprehensive income to the profit for the year for these hedges was EUR -4,105 thousand).\n\n#### <span id=\"page-94-0\"></span>**NOTE 13 – CASH AND CASH EQUIVALENTS**\n\nThe detail of \"inventories\" in the consolidated statement of financial position as at 31 December is as follows:\n\n| (Amounts in thousands of euros) |           |           |\n|---------------------------------|-----------|-----------|\n|                                 | 2023      | 2022      |\n| Cash and banks                  | 155,691   | 228,515   |\n| Short-term bank deposits        | 1,637,992 | 1,319,525 |\n| TOTAL                           | 1,793,683 | 1,548,040 |\n\nThe Group made cash placements mainly in both US dollars and South African rand. The effective interest rate on the shortterm bank deposits in 2023 was 5.51% for the dollar (2022: 4.53%) and 8.15% for the rand (2022: 6.5%). The average term of the placements is between one day and three months, and they have been deposited at banks of recognised financial solvency.\n\nAll cash and cash equivalents are held in current accounts or current deposits, and there were no restricted cash balances at year-end.\n\n#### <span id=\"page-94-1\"></span>**NOTE 14 – EQUITY**\n\n#### **14.1 Subscribed capital, issue premium and treasury shares**\n\n|                                                              | No. of shares<br>(thousands) | Number of<br>treasury<br>shares<br>(thousands) | Treasury<br>shares (in<br>thousands of<br>euros) | Share capital<br>(in<br>thousands of<br>euros) | Issue<br>premium (in<br>thousands of<br>euros) |\n|--------------------------------------------------------------|------------------------------|------------------------------------------------|--------------------------------------------------|------------------------------------------------|------------------------------------------------|\n| As of 1 January 2022                                         | 270,546                      | -908                                           | -10,251                                          | 67,637                                         | 268                                            |\n| Acquisition of treasury shares                               |                              | -20,415                                        | -206,005                                         |                                                |                                                |\n| Amortisation of treasury shares                              | -10,822                      | 10,822                                         | 124,294                                          | -2,706                                         |                                                |\n| Long-term compensation plan (delivery of<br>treasury shares) |                              | 109                                            | 1,234                                            |                                                |                                                |\n| As of 31 December 2022                                       | 259,724                      | -10,392                                        | -90,728                                          | 64,931                                         | 268                                            |\n| Acquisition of treasury shares                               |                              | -213                                           | -2,084                                           |                                                |                                                |\n| Amortisation of treasury shares                              | -10,389                      | 10,389                                         | 90,685                                           | -2,597                                         |                                                |\n| Long-term compensation plan (delivery of<br>treasury shares) |                              | 110                                            | 1,072                                            |                                                |                                                |\n| As of 31 December 2022                                       | 249,335                      | -106                                           | -1,055                                           | 62,334                                         | 268                                            |\n\nThe detail of the changes in the shares outstanding in 2023 and 2022 is as follows:\n\n#### **a) Share capital**\n\nThe parent's share capital solely comprises ordinary shares. All these shares carry the same rights and there are no bylaw restrictions on their transfer.\n\nAt the cut-off date the share capital consisted of 249,335,371 ordinary shares of EUR 0.25 nominal value each, yielding capital of EUR 62,334 thousand (259,724,345 ordinary shares at 31 December 2022 and a capital amount of 64,931). The shares have been fully subscribed and paid.\n\nAll the Company's shares are listed on the Madrid and Barcelona stock exchanges.\n\nDuring the year, Acerinox, S.A.'s share capital has been reduced, as approved by the Annual General Meeting held on 23 May 2023, through the amortisation of 10,388,974 treasury shares with a value of EUR 2,597 thousand. The purpose of this reduction of share capital is to increase the value of the shareholders' stake in the Company.\n\n{95}------------------------------------------------\n\nImage /page/95/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a gap at the bottom.\n\nAs regards 2022, the Board of Directors of Acerinox, S.A. held on 30 June 2022, on the basis of the authorisation granted by the Annual General Meeting of Acerinox, S.A. held on 16 June, resolved to execute the resolution to reduce share capital, reducing it by EUR 2,706 thousand through the redemption of 10,821,848 treasury shares.\n\nAt 31 December 2023, the only shareholder with a stake of 10% or more in the share capital of Acerinox, S.A. is Corporación Financiera Alba, S.A. with 19.29% (2022: 18.52%).\n\n#### **b) Issue premium**\n\nThe issue premium amounted to EUR 268 thousand both in 2023 and 2022 and has the same restrictions and may be used for the same purposes as the voluntary reserves of the parent, including its conversion into share capital.\n\nNo issue premium distributions were made this year or last year.\n\n#### **c) Treasury shares**\n\nAt year-end, treasury shares amounted to 106,790 with a value of EUR 1,055 thousand (31 December 2022: 10,392,827 treasury shares with a value of EUR 90,728 thousand).\n\nThe Board of Directors meeting on 27 July 2022, in view of the Company's financial strength, cash generation prospects and the low level of the share price, agreed to initiate a new 4% share buy-back programme. This programme fulfilled the Company's commitment to redeem the shares that were issued in the years when scrip dividends were made.\n\nThe terms of the buy-back programme were as follows:\n\n- The shares had to be purchased at market price and under the price and volume conditions set out in Article 3 of the Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016.\n- The Company could not purchase shares at a price higher than the higher of the prices of the last independent trade and the highest current independent purchase bid on the trading venue where the purchase was carried out.\n- The Company could not purchase on any trading day more than 25% of the average daily volume of the shares on the trading venue on which the purchase was carried out. The average daily volume of the Company's shares for the purposes of the foregoing calculation was based on the average daily volume traded during the twenty business days preceding the date of each purchase. This limit applied for the entire duration of the programme.\n\nOn 26 October 2022, the Company completed the acquisition of 10,388,974 shares included in the second approved buy-back programme. The disbursement made by the Group in connection with this programme amounted to EUR 90,685 thousand.\n\nThe Annual General Meeting held on 23 May 2023 approved the reduction of Acerinox, S.A.'s share capital by EUR 2,597 thousand, through the retirement of 10,388,974 treasury shares. The purpose of this reduction of share capital through the redemption of treasury shares is to increase the value of the shareholders' stake in the Company. This capital reduction was carried out in August this year.\n\nDuring the year, 213 thousand treasury shares were acquired to cover the Multi-Year Remuneration Plans for Group executives for an amount of EUR 2,084 thousand. In addition, 110,563 treasury shares were delivered to Company's executives as a result of the completion of the Third Cycle of the First Multi-Year Remuneration Plan. In this way, treasury shares totalling EUR 1,072 thousand were derecognised. The difference between the equity instruments recorded in accordance with the valuation made at the beginning of the plan and the treasury shares delivered has been recorded against reserves of the parent company in the amount of EUR -769 thousand.\n\nWith regard to 2022, the Board of Directors of Acerinox, S.A., at its meeting held on 16 December 2021, also approved a share buyback plan of up to 4% of the share capital. The maximum investment approved was EUR 150 million and the maximum number of shares to be acquired could not exceed 10,821,848, representing 4% of the Company's capital, at the time of approval.\n\nDuring the year, in addition to those mentioned above, 9,986,487 shares were acquired for an amount of EUR 114,875 thousand in connection with this buy-back programme (835,361 shares for an amount of EUR 9,418 thousand had been acquired the previous year). As explained in the section on share capital, all shares corresponding to this buy-back programme were redeemed in 2022 for an amount of EUR 124,294 thousand. Effective 30 August 2022, 10,821,848 shares of Acerinox, S.A. were delisted from trading on the Madrid and Barcelona Stock Exchanges.\n\nIn June 2022, 109.378 treasury shares were delivered to Group executives as a result of the completion of the second cycle of the First Multi-Year Remuneration Plan. Treasury shares totalling EUR 1,234 thousand were derecognised. The difference between the equity instruments recorded in accordance with the valuation made at the beginning of the plan and the treasury shares delivered were recorded against reserves of the parent company in the amount of EUR -810 thousand.\n\n{96}------------------------------------------------\n\nImage /page/96/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, stacked vertically, and enclosed within a blue circle that is open at the top.\n\nAlso, last year, 40,000 treasury shares amounting to EUR 419 thousand were acquired to cover the multi-year remuneration plans for Group executives.\n\n#### **14.2 Dividends paid**\n\nThe Board of Directors of Acerinox S.A., held on 20 December 2023, has agreed to propose to the Shareholders' Meeting the payment of a dividend of EUR 0.62 per share, i.e. an increase of 3.33% over the last approved dividend, of which EUR 0.31 gross per share has been payable in cash to each of the existing and outstanding shares of the Company entitled to receive such dividend on 26 January 2024 through the depositary entities participating in the \"Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. Unipersonal\" (IBERCLEAR).\n\nIn accordance with Acerinox's Dividend Policy approved on 20 December 2022, the total shareholder remuneration is maintained, so that the reduction in the number of shares as a result of the last share buyback plan results in a higher payment per share.\n\nThe provisional accounting statement prepared by the directors in accordance with Article 277 of the Spanish Corporate Enterprises Act, which shows the liquidity status for the payment of the interim dividend, is as follows:\n\n|                                                                     |        | 2023    |\n|---------------------------------------------------------------------|--------|---------|\n| Cash on hand at 30 November 2023                                    |        | 6,939   |\n| <i>Plus:</i>                                                        |        |         |\n| Planned cash increases between 30 November 2023 and 26 January 2024 |        | 97,464  |\n| Dividend collection                                                 | 83,486 |         |\n| Receivables from operating activities                               | 4,980  |         |\n| Collection of tax refunds                                           | 8,998  |         |\n| <i>Less:</i>                                                        |        |         |\n| Planned cash decreases between 30 November 2023 and 26 January 2024 |        | -6,800  |\n| Payments for operating activities                                   | 4,820  |         |\n| Payments from financial operations                                  | 1,980  |         |\n| Projected liquidity as at 26 January 2024                           |        | 97,603  |\n| Credit line capacity                                                |        | 156,300 |\n| Available liquidity at 26 January 2024                              |        | 253,903 |\n\nThe Annual General Meeting held on 23 May 2023 resolved to distribute a dividend of EUR 0.60 per share. The amount of the dividend distribution was the aggregate result of the sum of the following amounts:\n\n- the payment of the interim dividend for 2022 in the amount of EUR 0.30 gross per share agreed by the Board of Directors at its meeting on 20 December 2022, which was paid on 27 January 2023, and amounted to EUR 74,799; and\n- a complementary dividend charged to the financial year 2022 at a rate of EUR 0.30 gross per share for each of the 259,724,345 existing shares (without prejudice to the provisions of Article 148 of the Corporate Enterprises Act with respect to the shares held as treasury stock at the time of payment). This complementary dividend was paid on 17 July 2023 in the amount of EUR 74,765 thousand.\n\nThe amount paid amounted to EUR 149,562 thousand.\n\nThe Annual General Meeting held on 16 June 2022 approved the distribution of a dividend of EUR 0.5 per share, which was paid on 5 July 2022. The amount paid amounted to EUR 129,850 thousand.\n\n#### **14.3 Reserves**\n\n#### **a) Retained earnings in reserves**\n\n\"Retained earnings in reserves\" includes consolidated profit or loss for the year and reserves of fully consolidated companies and of the parent, other than those mentioned below.\n\n{97}------------------------------------------------\n\nImage /page/97/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the white background of the circle. The blue circle is a thick ring, providing a border around the word. The overall design is simple and corporate, suggesting a company identity.\n\nThe detail of the reserves by Company is included in **Note 14.5**.\n\nThere are no restrictions on the transfer of funds by any Group company in the form of dividends, except for the nondistributable reserves required by the applicable legislation. At 31 December 2023, the Group had EUR 40,141 thousand in reserves and retained earnings subject to restrictions (31 December 2022: EUR 39,733 thousand).\n\nThe parent's legal reserve, which is included under \"retained earnings in reserves\" in the consolidated statement of changes in equity, was recognised in compliance with Article 274 of the Spanish Corporate Enterprises Act, which establishes that 10% of profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of share capital. Acerinox S.A has already recorded this reserve for an amount equivalent to 20% of the share capital, amounting in both periods to EUR 13,527 thousand.\n\nThe legal reserve is not distributable to shareholders and can only be used to offset losses, in the event that sufficient other reserves are not available for this purpose, in which case the reserve must be replenished with future profits.\n\n#### **b) Property, plant and equipment revaluation reserve**\n\nIn accordance with Royal Decree-Law 7/1996, of 7 June, on urgent tax measures and measures to foster and deregulate the economy, the parent revalued its items of property, plant and equipment. The amount of the reserve reflects the revaluation gains, net of tax at 3%.\n\nThe tax authorities had a three-year period from 31 December 1996 in which to conduct a tax audit. Since such an audit did not take place, the aforementioned balance may be used to eliminate losses or increase the Company's share capital.\n\nThe balance of this account may only be distributed, either directly or indirectly, once the gain has been realised.\n\n#### **c) Hedge reserves**\n\nValuation adjustments relating to hedges includes cumulative net changes in the fair value of cash flow hedging instruments associated with highly probable future transactions.\n\n#### **d) Fair value adjustments to financial assets**\n\nThe Company designated certain financial instruments as at fair value through comprehensive income. In accordance with the related accounting policy, changes in the fair value of these instruments are recognised directly in the consolidated statement of comprehensive income. The main assets classified in this category were sold last year as described in **Note 12.2.5**.\n\n#### **e) Reserve for actuarial adjustments**\n\nThis reserve includes the changes in the actuarial value of the defined benefit plan obligations. The Group, particularly in its high-performance alloys division, has significant commitments to its employees regarding pension matters. **Note 16.1** includes detailed information. As described in the accounting policy defined in **Note 2.16**, the Group recognises changes in the actuarial valuation of the obligations in other comprehensive income.\n\n#### **14.4 Translation differences**\n\nThe detail of the changes in \"translation differences\" is included in the consolidated statement of changes in equity.\n\nThe breakdown of the cumulative translation differences by company at the end of 2023 and 2022 and the functional currencies of their respective financial statements are as follows:\n\n(Amounts in thousands of euros)\n\n{98}------------------------------------------------\n\nImage /page/98/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned inside a blue circle.\n\n| GROUP COMPANIES                                         | Currency | 2023     | 2022     |\n|---------------------------------------------------------|----------|----------|----------|\n| ACERINOX (SCHWEIZ) A.G.                                 | CHF      | 1,781    | 1,604    |\n| ACERINOX ARGENTINA S.A.                                 | ARS      | -7,379   | -6,182   |\n| ACERINOX AUSTRALASIA PTY. LTD.                          | AUD      | 20       | 36       |\n| ACX DO BRASIL REPRESENTAÇOES, LTDA.                     | BRL      | -259     | -279     |\n| ACERINOX CHILE, S.A.                                    | CLP      | -1,277   | -905     |\n| ACERINOX COLOMBIA S.A.S.                                | COP      | -199     | -227     |\n| ACERINOX INDIA PVT LTD.                                 | INR      | -81      | -67      |\n| ACERINOX METAL SANAYII VE TICARET L.S.                  | TRY      | -1,878   | -1,333   |\n| ACERINOX MIDDLE EAST DMCC (DUBAI)                       | AED      | 72       | 104      |\n| ACERINOX PACIFIC LTD.                                   | HKD      | -4,862   | -4,826   |\n| ACERINOX POLSKA, SP. ZO.O.                              | PLN      | -1,690   | -3,830   |\n| ACERINOX RUSSIA LLC.                                    | RUB      | -174     | -85      |\n| ACERINOX SCANDINAVIA AB                                 | SEK      | -7,358   | -7,441   |\n| ACERINOX S.C. MALAYSIA SDN. BHD                         | MYR      | -1,940   | -2,042   |\n| ACERINOX (SEA), PTE LTD.                                | SGD      | 183      | 208      |\n| ACERINOX SHANGAI CO., LTD.                              | CNY      | 916      | 1,140    |\n| ACERINOX U.K., LTD.                                     | GBP      | -6,138   | -6,702   |\n| BAHRU STAINLESS, SDN. BHD                               | USD      | 93,376   | 92,260   |\n| COLUMBUS STAINLESS INC.                                 | ZAR      | -192,677 | -168,040 |\n| CORPORACIÓN ACERINOX PERU S.A.C.                        | PEN      | -20      | -22      |\n| NORTH AMERICAN STAINLESS CANADA, INC                    | USD      | 3,785    | 5,826    |\n| NORTH AMERICAN STAINLESS MEXICO S.A. DE C.V.            | USD      | 5,648    | 7,465    |\n| NORTH AMERICAN STAINLESS FINANCIAL<br>INVESTMENTS, LTD. | USD      | 3        | 4        |\n| NORTH AMERICAN STAINLESS INC.                           | USD      | 108,206  | 181,514  |\n| VDM METALS GROUP                                        | —        | 3,952    | 5,743    |\n| TOTAL                                                   |          | -7,990   | 93,923   |\n\nThe origin of the changes arising in 2023 as in 2022 is detailed below:\n\n| (Amounts in thousands of euros)                             |         |         |\n|-------------------------------------------------------------|---------|---------|\n|                                                             | 2023    | 2022    |\n| Opening balance                                             | 93,923  | -10,154 |\n| Difference in equity translation                            | -89,339 | 115,829 |\n| Difference in translation results                           | -7,471  | -6,380  |\n| Difference on translation of investments in Group companies | -4,919  | -5,961  |\n| Dividend distribution translation difference                |         | 83      |\n| Other changes                                               | -184    | -242    |\n| Balance as of 31 December                                   | -7,990  | 93,923  |\n\nThe translation difference resulting from the measurement of equity was negative, i.e. EUR -89,339, due to the depreciation of 4% of the USD and 12% of the rand with respect to the exchange rate at the end of 2022. The EUR/USD exchange rate applied at the end of 2023 was 1.1050 (2022: 1.0666), while the EUR/ZAR rate was 20.3477 in 2023 (2022: 18.0986).\n\nIn 2022, this difference was also positive in the amount of EUR 115,829, mainly due to the appreciation of the USD. The EUR/USD exchange rate applied at the end of 2022 was 1.10666 (2021: 1.1326), while the EUR/ZAR rate was 18.0986 in 2022 (2021: 18,0625).\n\nThe translation difference by income derives from the difference between the average exchange rate applied in the translation of the income statement and the closing exchange rate applied to the balance sheet items.\n\n#### **14.5 Detail of reserves, profit or loss and non-controlling interests: Contribution by company**\n\nAt 31 December 2023 and 2022, the contribution of each of the consolidated companies to reserves and consolidated profit or loss is detailed as follows:\n\n(Amounts in thousands of euros)\n\n|                                                                                   | 2023                     |                                |                                                            | 2022                                   |                           |                                |                                                            |                                        |\n|-----------------------------------------------------------------------------------|--------------------------|--------------------------------|------------------------------------------------------------|----------------------------------------|---------------------------|--------------------------------|------------------------------------------------------------|----------------------------------------|\n|                                                                                   | Contribution<br>reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests | Contributio<br>n reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests |\n| ACERINOX S.A                                                                      | 2,087,657                | -5,948                         |                                                            |                                        | 2,048,140                 | -16,196                        |                                                            |                                        |\n|                                                                                   | 2023                     |                                |                                                            |                                        | 2022                      |                                |                                                            |                                        |\n|                                                                                   | Contribution<br>reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests | Contributio<br>n reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests |\n| ACERINOX<br>(SCHWEIZ) A.G.                                                        | 883                      | -21                            |                                                            |                                        | 825                       | 58                             |                                                            |                                        |\n| ACERINOX<br>ARGENTINA S.A.                                                        | 8,514                    | -561                           |                                                            |                                        | 7,173                     | 313                            |                                                            |                                        |\n| ACERINOX<br>AUSTRALASIA PTY.<br>LTD.                                              | 32                       | -22                            |                                                            |                                        | 62                        | -30                            |                                                            |                                        |\n| ACERINOX BENELUX S.A.<br>- N.V.                                                   | 1,307                    | 231                            |                                                            |                                        | 667                       | 641                            |                                                            |                                        |\n| ACX DO BRASIL<br>REPRESENTAÇOES,<br>LTDA.                                         | 277                      | -4                             |                                                            |                                        | 289                       | -12                            |                                                            |                                        |\n| ACERINOX CHILE,<br>S.A.                                                           | 1,679                    | -1,314                         |                                                            |                                        | 578                       | 1,100                          |                                                            |                                        |\n| ACERINOX<br>COLOMBIA S.A.S.                                                       | 376                      | -199                           |                                                            |                                        | 514                       | -138                           |                                                            |                                        |\n| ACERINOX<br>DEUTSCHLAND<br>GMBH                                                   | -19,241                  | 1,866                          |                                                            |                                        | -18,299                   | -941                           |                                                            |                                        |\n| ACERINOX EUROPA,<br>S.A.U.                                                        | -117,073                 | -189,947                       |                                                            |                                        | -70,289                   | -46,784                        |                                                            |                                        |\n| ACERINOX FRANCE<br>S.A.S                                                          | -11,369                  | 207                            |                                                            |                                        | -11,892                   | 522                            |                                                            |                                        |\n| ACERINOX ITALIA<br>S.R.L.                                                         | -30,809                  | -3,880                         |                                                            |                                        | -34,164                   | 3,355                          |                                                            |                                        |\n| ACERINOX INDIA<br>PVT LTD.                                                        | 123                      | 193                            |                                                            |                                        | -52                       | 176                            |                                                            |                                        |\n| ACERINOX METAL<br>SANAYII VE TICARET<br>L.S.                                      | 2,198                    | 715                            |                                                            |                                        | 1,750                     | 448                            |                                                            |                                        |\n| ACERINOX MIDDLE<br>EAST DMCC (DUBAI)                                              | 807                      | -4                             |                                                            |                                        | 871                       | -65                            |                                                            |                                        |\n| ACERINOX PACIFIC<br>LTD.                                                          | -21,326                  | 566                            |                                                            |                                        | -21,270                   | -57                            |                                                            |                                        |\n| ACERINOX POLSKA,<br>SP. ZO.O.                                                     | 3,287                    | 2,142                          |                                                            |                                        | 4,418                     | -1,131                         |                                                            |                                        |\n| ACERINOX RUSSIA<br>LLC.                                                           | 200                      | -26                            |                                                            |                                        | 606                       | -214                           |                                                            |                                        |\n| ACERINOX<br>SCANDINAVIA AB                                                        | 1,180                    | -151                           |                                                            |                                        | 1,914                     | -733                           |                                                            |                                        |\n| ACERINOX S.C.<br>MALAYSIA SDN. BHD                                                | -36,670                  | -778                           |                                                            |                                        | -38,362                   | 1,693                          |                                                            |                                        |\n| ACERINOX SHANGAI<br>CO., LTD.                                                     | 789                      | -17                            |                                                            |                                        | 906                       | -118                           |                                                            |                                        |\n| ACERINOX (SEA), PTE<br>LTD.                                                       | 844                      | -79                            |                                                            |                                        | 857                       | -13                            |                                                            |                                        |\n| ACERINOX U.K., LTD.                                                               | 5,105                    | 661                            |                                                            |                                        | 5,409                     | -303                           |                                                            |                                        |\n| ACEROL - COMÉRCIO<br>E INDÚSTRIA DE<br>AÇOS INOXIDÁVEIS,<br>UNIPESSOAL, LDA.      | -2,358                   | 91                             |                                                            |                                        | -2,137                    | -220                           |                                                            |                                        |\n| BAHRU STAINLESS,<br>BDN. BHD                                                      | -766,830                 | -205,208                       | -2,463                                                     | -1,280                                 | -548,880                  | -217,950                       | -2,652                                                     | 1,170                                  |\n| COLUMBUS<br>STAINLESS (PTY)<br>LTD.                                               | 117,674                  | -26,304                        | -8,669                                                     | 55,845                                 | 59,631                    | 58,043                         | 16,961                                                     | 72,266                                 |\n| CORPORACIÓN<br>ACERINOX PERU<br>S.A.C.                                            | -263                     | -156                           |                                                            |                                        | -209                      | -54                            |                                                            |                                        |\n| INOX RE, S.A.                                                                     | 33,972                   | -2,949                         |                                                            |                                        | 34,245                    | -273                           |                                                            |                                        |\n| INOXCENTER<br>CANARIAS, S.A.U.                                                    | 1,071                    | 141                            |                                                            |                                        | 1,071                     | 1                              |                                                            |                                        |\n| INOXCENTER, S.L.U.                                                                | -10,877                  | -3,524                         |                                                            |                                        | -12,137                   | 1,259                          |                                                            |                                        |\n| INOXFIL, S.A.                                                                     | 667                      | -2,670                         | -6                                                         | 10                                     | -2,075                    | 2,742                          | 6                                                          | 16                                     |\n| INOXIDABLES DE<br>EUSKADI S.A.U.                                                  | 5,263                    | 672                            |                                                            |                                        | 5,826                     | -563                           |                                                            |                                        |\n| INOXPLATE -<br>COMÉRCIO DE<br>PRODUCTOS DE AÇO<br>INOXIDÁVEL,<br>UNIPESSOAL, LDA. | 2,190                    | 115                            |                                                            |                                        | 2,077                     | 114                            |                                                            |                                        |\n| METALINOX BILBAO,<br>S.A.U.                                                       | 16,374                   | 938                            |                                                            |                                        | 16,371                    | 2                              |                                                            |                                        |\n|                                                                                   | 2023                     |                                |                                                            |                                        | 2022                      |                                |                                                            |                                        |\n|                                                                                   | Contribution<br>reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests | Contributio<br>n reserves | Contribution<br>profit or loss | Results<br>attributable to<br>non-controlling<br>interests | Total non-<br>controlling<br>interests |\n| NORTH AMERICAN<br>STAINLESS CANADA,<br>INC                                        | 45,411                   | 3,816                          |                                                            |                                        | 39,486                    | 5,925                          |                                                            |                                        |\n| NORTH AMERICAN<br>STAINLESS MEXICO<br>S.A. DE C.V.                                | 21,807                   | 6,435                          |                                                            |                                        | 15,655                    | 6,152                          |                                                            |                                        |\n| NORTH AMERICAN<br>STAINLESS<br>FINANCIAL<br>INVESTMENTS LTD.                      | -9,993                   | 9,993                          |                                                            |                                        | -10,207                   | 10,207                         |                                                            |                                        |\n| NORTH AMERICAN<br>STAINLESS INC.                                                  | 737,281                  | 579,366                        |                                                            |                                        | 338,590                   | 697,451                        |                                                            |                                        |\n| ROLDAN, S.A.                                                                      | 45,194                   | -9,342                         | -23                                                        | 121                                    | 36,507                    | 8,687                          | 17                                                         | 144                                    |\n| VDM METALS<br>HOLDING GMBH                                                        | 84,496                   | 73,084                         |                                                            |                                        | 66,288                    | 42,960                         |                                                            |                                        |\n| TOTAL                                                                             | 2,199,849                | 228,128                        | -11,161                                                    | 54,696                                 | 1,920,753                 | 556,054                        | 14,332                                                     | 73,596                                 |\n\n{99}------------------------------------------------\n\nImage /page/99/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif, dark blue letters. The word is enclosed within a partial circle, also in dark blue, that curves around the top and bottom of the word. The background is white.\n\n{100}------------------------------------------------\n\nImage /page/100/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a partial circle. The circle is open on the right side and is colored in blue. The text is also in blue, matching the color of the circle.\n\nIn this financial year, the Group company North American Stainless paid dividends of EUR 296 million to the parent company (2022: EUR 469 million), which explains why the reserves of the American company have barely increased compared to the previous year, as well as the change in the reserves of Acerinox, S.A.\n\n#### **14.6 Hyperinflation adjustments**\n\nSince 1 July 2018, Argentina has been classified as a hyperinflationary economy due to meeting the qualification requirements established in IAS 29. The Acerinox Group has an entity in Argentina which engages exclusively in the marketing of stainless steel in that country and, accordingly, the amount of its assets and liabilities and its contribution to the Group's results are not significant. The Group did not restate the comparative figures for the previous period as the impacts are not significant for the Group.\n\nThe financial statements of Acerinox Argentina for both 2023 and 2022 were expressed in terms of the measuring unit current at the end of the reporting period. The restated cost of each non-monetary item in the financial statements was determined by applying to its historical cost and accumulated depreciation and amortisation charge the change in a general price index from the date of acquisition to the end of the reporting period. The revaluation of non-cash assets amounted to EUR 490 thousand cost and EUR 351 thousand accumulated depreciation (2022: EUR 527 thousand cost and EUR 380 thousand accumulated depreciation).\n\nThe components of owners' equity, except retained earnings and any revaluation surplus, were restated by applying a general price index to the various items from the date on which the components were contributed or otherwise arose. Restated retained earnings are the result of applying these indices to the other amounts in the consolidated statement of financial position. The impact on reserves amounted to EUR 1,028 thousand, as reflected in the consolidated statement of changes in equity (2022: EUR 973 thousand).\n\nAll the items in the consolidated statement of comprehensive income were also restated in the monetary unit current at the end of the reporting period. For this purpose, all the amounts were restated by applying an index calculated on the basis of the change in the general price index from the date on which the income and expenses were recognised in the financial statements. The amount recognised in the consolidated statement of profit or loss for this item was EUR -1,345 thousand (2022: EUR -605 thousand).\n\n#### **14.7 Non-controlling interests**\n\nAt year-end, the companies with non-controlling interests were Columbus Stainless, Ltd. (Columbus), with an interest of 24% held by the South African group IDC (Industrial Development Corporation), and Bahru Stainless Sdn. Bhd, (Bahru), whose non-controlling interests were reduced to 1.19% owned by Hanwa, Co. Ltd.\n\nThere are no rights to protect non-controlling interests that may restrict the entity's ability to access or use assets, or settle the entity's liabilities.\n\nNeither of these companies distributed dividends in 2023 or 2022.\n\n{101}------------------------------------------------\n\nImage /page/101/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not fully closed, leaving a gap at the top.\n\nThe detail of the main items in the financial statements of Columbus, which was the only Group company with significant non-controlling interests at year-end, is as follows:\n\n#### **Columbus**\n\n(Amounts in thousands of euros)\n\n|                             | 2023    | 2022    |\n|-----------------------------|---------|---------|\n| Non-current assets          | 119,822 | 123,328 |\n| Current assets              | 304,520 | 432,168 |\n| Total Assets                | 424,342 | 555,496 |\n|                             |         |         |\n| Non-current liabilities     | 8,912   | 22,712  |\n| Current liabilities         | 182,741 | 231,671 |\n| Total Liabilities           | 191,653 | 254,383 |\n|                             |         |         |\n| Statement of profit or loss | 2023    | 2022    |\n| Revenue                     | 610,191 | 984,008 |\n| Profit/(loss) for the year  | -36,121 | 70,669  |\n|                             |         |         |\n| Cash flows                  | 2023    | 2022    |\n| Operating cash flows        | -19,439 | 44,511  |\n| Investment flows            | -21,924 | -18,803 |\n| Financing flows             | 29,649  | -2,729  |\n| Total cash flows generated  | -11,714 | 22,979  |\n\nWhen Columbus Stainless was incorporated, Acerinox signed a Shareholders Agreement in December 2001 with the three South African partners, Highveld Steel and Vanadium Corporation, Ltd., Samancor, Ltd. and IDC, which held ownership interests therein.\n\nIn Clause 9 of that agreement it was stipulated that, in the event of a change of control at Acerinox, S.A., by virtue of which a shareholder acquired shares of Acerinox, S.A. that afforded it a majority of votes at the General Meeting or on the Board, the shareholders would be able to exercise a put option on their ownership interests vis-à-vis Acerinox, S.A.\n\nIn the years that have passed, two of the three partners who signed the agreement, Highveld and Samancor, have renounced their shareholdings, and the third, IDC, a state entity supporting industrial development in South Africa, has increased its ownership interest from 12% to 24%, given its interest in supporting the creation of wealth, the maintenance of employment and the status of the stainless-steel industry as a strategic industry for the country. IDC recently declared that this was a strategic and long-term interest.\n\nConsequently, the exercise of this option, with respect to the aforementioned assumption, is highly unlikely for the only minority shareholder of Columbus Stainless, since its permanence is not determined by the presence of Acerinox, as it was in the case of the other shareholders, but by support to the national industry.\n\n#### **14.8 Distribution of profit**\n\nThe proposed distribution of profit of the parent, Acerinox, S.A., for 2023 that the Board of Directors will submit for approval by the shareholders at the Annual General Meeting is as follows:\n\n|                                                         | 2023        |\n|---------------------------------------------------------|-------------|\n| Basis for distribution:                                 |             |\n| Profit/(loss) for the year                              | 114,186,613 |\n| Application:                                            |             |\n| Dividends                                               | 149,537,702 |\n| Distribution of dividends against prior years' reserves | -35,351,089 |\n\nThe Board of Directors of Acerinox, S.A. resolved to propose to the next Annual General Meeting of the Company a dividend distribution of EUR 0.62 per share.\n\n{102}------------------------------------------------\n\nImage /page/102/Picture/1 description: The image features the logo of Acerinox, a company specializing in stainless steel manufacturing. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that frames the company name. The overall design is simple and corporate, conveying a sense of stability and professionalism.\n\nOn 23 May 2023, the General Meeting of Shareholders approved the appropriation of the results of the parent company for the financial year 2022, with the following distribution:\n\n|                            | 2022        |\n|----------------------------|-------------|\n| Basis for distribution:    |             |\n| Profit/(loss) for the year | 332,013,162 |\n| Application:               |             |\n| Dividends                  | 149,599,165 |\n| To voluntary reserves      | 182,413,997 |\n\nThe dividend finally distributed does not correspond exactly to the distribution approved last year, as the number of treasury shares had changed at the time of the dividend distribution.\n\n#### **14.9 Earnings per share**\n\nThe basic earnings per share are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding in the year, less treasury shares.\n\n(Amounts in thousands of euros)\n\n|                                                      | 2023        | 2022        |\n|------------------------------------------------------|-------------|-------------|\n| Profit/(loss) for the year attributable to the Group | 228,128     | 556,054     |\n| Weighted average number of common shares outstanding | 249,260,083 | 257,598,114 |\n| Earnings per share (in euros)                        | 0.92        | 2.16        |\n\nAlthough there were other equity instruments that gave access to capital at 31 December 2023, as indicated in **Note 16.1.3**, these do not have a significant effect on the calculation of earnings per share and, therefore, diluted earnings or losses per share are the same as basic earnings or losses per share.\n\n#### <span id=\"page-102-0\"></span>**NOTE 15 – DEFERRED INCOME**\n\n\"Deferred income\" includes non-refundable government aid, including emission allowances received free of charge (see **Note 11.1**) and other grants related to assets. The changes therein were as follows:\n\n|                           | 2023    | 2022    |\n|---------------------------|---------|---------|\n| Balance as of 1 January   | 27,465  | 18,684  |\n| Grants awarded            | 45,979  | 29,156  |\n| Application to results    | -37,097 | -20,375 |\n| Balance as of 31 December | 36,347  | 27,465  |\n\n(Amounts in thousands of euros)\n\nThe amount recognised under \"deferred income\" includes mainly aid received by Acerinox Europa for its research and development and environmental activities, and the balancing entry for emission allowances allocated for no consideration under the National Allocation Plan and not used in the year (**Note 11.1**).\n\n{103}------------------------------------------------\n\nImage /page/103/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is enclosed within a blue circle that is open at the bottom, creating a crescent shape.\n\nThe detail of the grants received in 2023 is as follows:\n\n(Amounts in thousands of euros)\n\n|                          | 2023   | 2022   |\n|--------------------------|--------|--------|\n| R&D                      | 1,889  | 14     |\n| Environment              | 24,612 | 9,879  |\n| Allocation of CO2 rights | 19,113 | 18,692 |\n| Covid-19 grants          | 29     | 198    |\n| Training                 | 273    | 306    |\n| Other                    | 63     | 67     |\n| Total                    | 45,979 | 29,156 |\n\nIn 2023, the Group received an environmental grant of EUR 24,612 thousand mostly related to offsetting the costs of indirect greenhouse gas emissions and energy offsetting. In 2022, EUR 9,879 thousand were received for the same concept.\n\nThe Group considers that it has met or will meet all the conditions for receiving the grants in the period stipulated and, therefore, there are no significant contingencies in connection with the grants obtained.\n\n#### <span id=\"page-103-0\"></span>**NOTE 16 – PROVISIONS AND CONTINGENCIES**\n\nThe detail of the long-term provisions included in the consolidated statements of financial position for the 2023 and 2022 tax years is as follows:\n\n| (Amounts in thousands of euros) |         |         |\n|---------------------------------|---------|---------|\n|                                 | 2023    | 2022    |\n| Employee benefits               | 148,311 | 135,397 |\n| Other provisions                | 31,683  | 23,661  |\n| TOTAL                           | 179,994 | 159,058 |\n\n#### **16.1 Employee benefits**\n\n#### **16.1.1 Defined contribution plans**\n\nIn accordance with their domestic legislation, certain Group companies make contributions to pension plans managed by external entities. An expense of EUR 17,656 thousand was recognised in this connection under \"staff costs\" in the consolidated statement of profit or loss for the year (2022: EUR 20,400 thousand).\n\n#### **16.1.2 Defined benefit plans**\n\nThe detail of the provisions for employee benefits, by type of obligation, is as follows:\n\n| (Amounts in thousands of euros)   | 2023    | 2022    |\n|-----------------------------------|---------|---------|\n| Pension plans                     | 118,137 | 106,326 |\n| Compensation for early retirement | 7,661   | 7,130   |\n| Supplements                       | 12,395  | 11,625  |\n| Post-employment obligations       | 8,675   | 9,004   |\n| Other obligations                 | 402     |         |\n| Restructuring plans               | 1,041   | 1,312   |\n| TOTAL                             | 148,311 | 135,397 |\n\nThe defined benefit liability recognised in the consolidated statement of financial position corresponds to the present value of the defined benefit obligations existing at the reporting date less the fair value of the plan assets at that date.\n\n{104}------------------------------------------------\n\nImage /page/104/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue crescent shape. The crescent shape is open at the top and curves around the text. The text is also in blue, matching the color of the crescent shape.\n\nThe detail of the main liabilities recognised by the Group is as follows:\n\n#### **Pension plans**\n\nThe VDM Group guarantees pension plans to its employees, mainly in Germany. The pension obligations are discharged under voluntary plans established by the company prior to the acquisition. Nowadays, new hires cannot benefit from obligations of this nature. These obligations take into consideration various remuneration schemes representing various risk profiles and are based on individual and collective regulations. All these obligations are pension plans that provide benefits to plan members in the form of a pension for life. The level of this pension is based on the years of service and, depending on the case, may be based on the final salary, average salary or even fixed amounts. Since the obligations undertaken by the company in this connection are not outsourced, the company fulfils the related payment obligation when it falls due.\n\nThe weighted average term of the defined benefit obligations is 14.46 years (2022: 14.3).\n\nThe actuarial valuation of these obligations is conducted annually by an independent expert.\n\nThe detail of the amounts recognised in the consolidated statement of financial position and of the changes in the net defined benefit obligations in the financial year is as follows:\n\n|                                                        | 2023    | 2022    |\n|--------------------------------------------------------|---------|---------|\n| Balance as of 1 January                                | 106,326 | 147,250 |\n| Contributions paid                                     | -4,253  | -3,846  |\n| Expense for services rendered recognised in income     | 3,372   | 5,278   |\n| Interest cost                                          | 3,785   | 1,604   |\n| Actuarial loss recognised against comprehensive income | 8,906   | -43,959 |\n| Balance as of 31 December                              | 118,137 | 106,326 |\n\nThe analyses of the expected maturity of undiscounted pensions in the years 2023 and 2022 are as follows:\n\n|           | 2023   | 2022   |\n|-----------|--------|--------|\n| 2023      |        | 4,824  |\n| 2024      | 5,039  | 4,559  |\n| 2025      | 4,793  | 4,764  |\n| 2026      | 5,134  | 5,128  |\n| 2027      | 5,729  | 5,504  |\n| 2028-2032 | 37,011 | 29,719 |\n| Total     | 57,706 | 54,498 |\n\nThe actuarial assumptions used in this valuation for 2023 and 2022 are as follows:\n\n|                                                         | 2023     | 2022              |\n|---------------------------------------------------------|----------|-------------------|\n| Discount rate                                           | 3.20     | 3.70              |\n| Inflation                                               | 2.20     | 2.20              |\n| Long-term growth rate                                   | 3.00     | 3.00              |\n| Pension dynamic with adjustment according to Sec. 16    | 2.20     | 0.00              |\n| Pension dynamics with adjustment according to inflation | 2.20     | 2.20              |\n| Mortality rate                                          | RT2018 G | Richttafeln 2018G |\n\nThe sensitivity analysis performed by the company gave rise to the following adjustments to the pension obligations, based on changes in certain assumptions:\n\n|                  |                                       | 2023   | 2022  |\n|------------------|---------------------------------------|--------|-------|\n| Discount rate    | 0.50 bp decrease                      | 10,735 | 9,468 |\n| Salary increase  | 0.50 bp increase                      | 100    | 82    |\n| Pension increase | 0.25 bp increase                      | 2,065  | 1,872 |\n| Mortality rate   | Increase in life expectancy by 1 year | 3,108  | 2,751 |\n\n#### **Post-employment obligations**\n\n{105}------------------------------------------------\n\nImage /page/105/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned within a blue crescent shape. The crescent shape is open on the left side, and the text is aligned to the left within the crescent.\n\nPost-employment obligations relate to medical care plans provided by Columbus Stainless to plan members following their retirement. No new members have joined the plan. The company generally performs actuarial valuations of the obligations assumed. The most recent valuation was performed this financial year. The assumptions used in the latest valuation were a discount rate of 12.33% and a medical cost inflation rate of 9.06%. The beginning and closing balances for the year are reconciled as follows:\n\n#### (Amounts in thousands of euros)\n\n|                                                          | 2023  | 2022  |\n|----------------------------------------------------------|-------|-------|\n| Balance as of 1 January                                  | 9,004 | 8,456 |\n| Contributions paid                                       | -394  | -494  |\n| Expense for services rendered recognised in income       | 98    | 134   |\n| Interest cost                                            | 963   | 965   |\n| Actuarial result recognised against comprehensive income |       | -40   |\n| Translation differences                                  | -995  | -18   |\n| Balance as of 31 December                                | 8,675 | 9,004 |\n\nThe discount rates applied are based on the expected growth rates of health insurance policies. Any changes in these rates may have an impact on both the obligations recognised and on comprehensive income. An increase of one percentage point in the discount rate would increase the obligation by EUR 892 thousand (2022: EUR 928 million). By contrast, a decrease of one percentage point in the discount rate would reduce the obligation by EUR 1.1 million in 2023 (2022: EUR 1.1 million).\n\n#### **Acerinox Europa, S.A.U.'s employment regulation plan**\n\nOn 13 November 2019, the representatives of Acerinox Europa, S.A.U. and the workers' representatives signed an agreement at the Servicio de Resolución Extrajudicial de Conflictos Laborales (SERCLA) of the Junta de Andalucía (Andalusian Regional Government) to reduce the workforce at the Campo de Gibraltar Factory (Cádiz) by 215 people.\n\nThese 32 employees left immediately after the execution of the aforementioned agreement and prior to year-end. The remaining departures, i.e. those leaving the company due to age reasons, took place gradually until the end of 2022, as the employees signed up to the plan reached 60 years of age. The last 4 employees involved in the collective redundancy procedure left the company in 2022.\n\nThe obligations arising from the approved early retirement plan are completely externalised, which means that the insurance company will compensate the employees at the time of their retirement. EUR 4,997 thousand were paid in this fiscal year in this connection with a charge to the insurance policy taken out (EUR 5,968 thousands in 2022).\n\nAt 31 December the existing liabilities relating to the future payments to be made by the Group were duly outsourced and covered in full. Accordingly, it was not necessary for the Group to recognise any additional liabilities. Any differences arising between the amount of the provision and the insurance taken out are charged or credited to profit or loss for the year.\n\nThe Company also provisioned EUR 9,254 thousand relating to the contribution to the Treasury established in Additional Provision Sixteen of Law 27/2011, amended by Royal Decree 1484/2012, accrued as a result of the presence of certain workers of over 50 years of age. This contribution will be payable to the pertinent authority in accordance with the aforementioned legislation. This provision is included under \"other provisions\", as disclosed in **Note 16.2**.\n\nIn 2022, the Company claimed exceptional aid on the basis of Royal Decree 908/2013, of 22 November, in favour of workers involved in company restructuring processes. This aid is subject to the workers signing up to a special agreement with the social security authorities and will be used to pay for social security contributions. The Group received subsidies totalling EUR 583 thousand which was recorded as \"other operating income\".\n\nThe company has made a provision of EUR 998 thousand, to cover an amount in anticipation of possible repayments to be made through the insurance company of the aforementioned aid, mainly by employees opting to bring forward their retirement age.\n\n#### **16.1.3 Other obligations**\n\nIn addition, there are obligations arising from certain senior executive retirement benefit arrangements amounting to EUR 18.8 million (2022: EUR 17.9 million). Since these obligations were appropriately insured in both 2023 and 2022, and their\n\n{106}------------------------------------------------\n\nImage /page/106/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not fully closed, leaving a gap at the top.\n\nestimated amount was covered by cash flows arising from the insurance policies taken out for this purpose, no liabilities were recognised in this connection.\n\nThe assumptions used to calculate the fair value are detailed below:\n\n|                           | 2023                  | 2022                   |\n|---------------------------|-----------------------|------------------------|\n| Mortality table           | PER2020_Col_1er.orden | PER 2020_Col_1er.orden |\n| CPI                       | 2.00 %                | 2.00 %                 |\n| Salary growth             | 2.00 %                | 2.00 %                 |\n| Growth in social security | IPC+0.115%            | 2.00 %                 |\n| Retirement age            | 65 years              | 65 years               |\n| Accrual method            | Projected Unit Credit | Projected Unit Credit  |\n\n#### **16.1.4 Sare-based payment transactions**\n\nAt its meeting held on 22 March 2018, the Board of Directors of Acerinox, S.A. approved a multi-year remuneration or longterm incentive (LTI) plan enabling the CEO and senior executives of the Acerinox Group to receive a portion of their variable remuneration in the form of treasury shares of Acerinox, S.A. The target amount is 30-50% of their base salary, subject to a personal limit of 200% of the respective target. This plan was subsequently submitted to, and approved by, the shareholders of Acerinox at the General Meeting held on 10 May 2018.\n\nThe approved LTI plan consists of three three-year cycles. The First Cycle of the plan ran from 1 January 2018 to 31 December 2020. The Second Cycle commenced on 1 January 2019 and ended on 31 December 2021, and the Third Cycle commenced on 1 January 2020 and ended on 31 December 2022.\n\nOn 1 January 2021, a new multi-year remuneration plan was also approved, consisting of three cycles, each with a duration of three years. Other Group executives have also been included in this second plan.\n\nUnder both remuneration plans, employees receive shares of the parent (\"performance shares\") at the end of each cycle. The delivery of the shares and the number to be delivered are contingent upon the fulfilment of certain vesting requirements relating to the employee remaining in service and the achievement of individual corporate objectives, certain of which depend on market circumstances.\n\nThe Group presumes that the services are to be provided over the irrevocability or vesting period as consideration for the future delivery of the shares. Accordingly, the services rendered are recognised on a straight-line basis over the period in which the rights to receive those shares become irrevocable.\n\nThe Group measures the goods or services received, as well as the corresponding increase in equity, at the fair value of the equity instruments granted at the grant date.\n\nTo calculate this theoretical number of shares, the shares of Acerinox, S.A. are measured at their quoted price 30 trading days prior to commencement of the plan, and their subsequent increase or decrease in value is assumed by the employee. The resulting number of Performance Shares is used as the basis for determining the actual number of Acerinox, S.A. shares to be delivered (if any) at the end of each cycle, depending on the extent to which objectives are achieved and subject to compliance with the requirements set out in the regulations governing each plan.\n\nThe Group engaged an independent expert to calculate the percentage of objectives achieved, subject to market conditions. Using accepted valuation techniques (the Monte Carlo method), the expert calculated the reasonable percentage of shares attributable to each employee subject to the remuneration plan. According to this valuation, the number of shares to be delivered in the performance of each of the plan cycles would be 78,853 shares for the first plan and 203,830 shares for the second, which would represent 0.3% of the share capital of Acerinox, S.A. at the end of the three cycles.\n\nThis year, 110,563 treasury shares were delivered to Group executives as a result of the completion of the third cycle of the First Multi-Year Remuneration Plan (2022: 109.378 treasury shares delivered). The difference between the value of the treasury shares delivered (2023: EUR 1,072 thousand and 2022: EUR 1,234 thousand) and the equity instruments provisioned on the basis of the estimates made (2023 and 2022: EUR 940 thousand), after deducting withholdings on account, was moved to reserves in the amount of EUR -769 thousand and EUR -810 thousand, respectively.\n\nThe expense incurred in 2023 amounted to EUR 1,429 thousand (2022: EUR 1,617 thousand), the balancing entry of which was recognised under \"other equity instruments\". The amount recognised at year-end under \"other equity instruments\" in the balance sheet totalled EUR 4,157 thousand (2022: EUR 3,695 thousand).\n\n{107}------------------------------------------------\n\nImage /page/107/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The word is in a lighter color, possibly white or light blue, which contrasts with the darker blue of the circle.\n\n#### **16.2 Other provisions**\n\nThe changes in 2023 and 2022 were as follows:\n\n(Amounts in thousands of euros)\n\n|                         | Litigation | CO2     | Other provisions | Total   |\n|-------------------------|------------|---------|------------------|---------|\n| As of 31 December 2021  | 300        | 9,643   | 10,468           | 20,411  |\n| Allocation provision    |            | 12,804  | 396              | 13,200  |\n| Application             |            | -9,835  | -97              | -9,932  |\n| Release of provisions   |            | -2      | -1               | -3      |\n| Translation differences |            |         | -15              | -15     |\n| As of 31 December 2022  | 300        | 12,610  | 10,751           | 23,661  |\n| Allocation provision    |            | 14,264  | 7,212            | 21,476  |\n| Application             | -250       | -12,658 | -478             | -13,386 |\n| Release of provisions   | -50        | -14     | -100             | -164    |\n| Translation differences |            |         | -24              | -24     |\n| As of 31 December 2023  | 0          | 14,202  | 17,481           | 31,683  |\n\n#### **CO<sup>2</sup>**\n\nThis heading includes the provisions relating to CO<sup>2</sup> emissions in the year, for which the emission allowances had yet to be surrendered at year-end (see **Note 11.1**).\n\n\"Amount used\" in the year includes derecognition of emission allowances for 2023, totalling EUR 12,658 thousand (2022: EUR 9,835 thousand) (see **Note 11.1**).\n\n#### **Litigation**\n\nAt the end of 2023, the Group continued to be involved in litigation with the Italian tax authorities concerning transfer pricing adjustments made for the years 2007 to 2015, which are explained in detail in **Note 19.5**. These legal proceedings relate to the adjustments imposed by the Italian authorities as a result of the purchase and sale transactions between the Italian Group company and Columbus Stainless (Pty) Ltd., as the transactions with the Group's Spanish factories have already been settled through an amicable procedure between the tax authorities of both countries.\n\nDuring the year, negotiations between the Italian company and the tax authorities for the years 2007 to 2013 were completed and the Group's estimates were confirmed. The Italian company has made payments arising from these agreements amounting to EUR 3.6 million, which were fully provisioned, so the provision was reduced by that amount.\n\nFor the years 2014 and 2015, the Group is in negotiations with the authorities to try to conclude the agreements on the same terms.\n\nThe amount of the provision at year-end amounted to EUR 7,556 thousand. This amount includes not only the aforementioned open litigation, but also the amounts resulting from the amicable settlements reached between the Spanish and Italian tax authorities from 2007 to 2015, which are pending enforcement in Italy. The company, in view of the opinion obtained from the experts who advise it on the subject, considers that the provision provided is sufficient to cover the amounts resulting from the litigation as well as the pending settlements\n\n#### **Other provisions**\n\n\"Other provisions\" includes mainly the measurement by Acerinox Europa, S.A.U. of the obligations arising from the collective redundancy procedure implemented in 2019 and those relating to the contribution to the Treasury set forth in Additional Provision Sixteen of Law 27/2011. The amount of this obligation, as verified by an independent expert, totals EUR 9,254 thousand. When calculating the provision, the characteristics of the employees included in the collective redundancy procedure were taken into account, together with observance of the legal requirements established by law and the applicable percentages. **Note 16.1.2** sets out the details of this collective redundancy procedure.\n\nIn addition, this year, as explained in Note 8.1, a provision for the possible obligation to dismantle the land of the Group entity in Bahru Stainless has been recorded in the amount of EUR 6,871 thousand. This provision has also been recognised as an increase in the value of assets. This provision was valued at market value and recorded at its current value.\n\n{108}------------------------------------------------\n\nImage /page/108/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a small gap at the top right. The text is also in blue, matching the color of the circle.\n\n#### **16.3 Guarantees provided**\n\nAt 31 December 2023, the Group had provided guarantees to third parties, mainly public authorities, totalling EUR 28.8 million (2022: EUR 28.2 million). This amount includes the guarantees totalling EUR 1.5 million provided to the Italian tax authorities as a result of the tax assessments arising from the tax audits described in **Note 19.5**. It also includes EUR 4.2 million deposited as a guarantee with the Ministry of Industry for credits obtained under the financial support programme for industrial investment in the framework of the public policy for reindustrialisation and strengthening industrial competitiveness (REINDUS). Guarantees totalling EUR 2.5 million were also deposited with the customs authorities.\n\nGroup management does not expect any significant liabilities to arise from these guarantees.\n\n#### **16.4 Contingencies**\n\nThere are no contingent liabilities at the end of this year or last year.\n\n#### <span id=\"page-108-0\"></span>**NOTE 17 – INCOME AND EXPENSES**\n\n#### **17.1 Revenue**\n\nThe detail of \"revenue\" in 2023 and 2022 is as follows:\n\n(Amounts in thousands of euros)\n\n|                                                   | 2023      | 2022      |\n|---------------------------------------------------|-----------|-----------|\n| Sale of goods                                     | 6,594,564 | 8,679,783 |\n| Provision of services                             | 13,414    | 8,711     |\n| Work performed by the company on its fixed assets | 7,825     | 27,371    |\n| Operating lease income                            | 622       | 567       |\n| Income from disposal of fixed assets              | 824       | 1,837     |\n| Income from grants or subsidies                   | 29,066    | 13,070    |\n| Revenues from emission allowance subsidies        | 8,031     | 7,305     |\n| Valuation at fair value of derivatives            | -2,687    | 10,701    |\n| Other income                                      | 56,342    | 7,545     |\n| TOTAL                                             | 6,708,001 | 8,756,890 |\n\nThe decline in sales compared to the previous year is due to lower demand in all markets and lower stainless-steel prices, which were partly influenced by the continuous decline in nickel prices over the course of the year.\n\nThe decrease in \"work performed by the company on its fixed assets\" is mainly due to the fact that major repairs were carried out on the steel and hot-rolling mills at one of the Group's plants last financial year, which were capitalised in accordance with the policy set out in **Note 2.8**.\n\n\"Income from grants or subsidies\" includes the extraordinary subsidies from public bodies listed in **Note 15**.\n\n\"Other income\" mainly includes the compensation received from the insurance company as a result of the incident at the Group's factory in the United States last year.\n\n#### **17.2 Staff costs**\n\nThe detail of \"staff costs\" incurred in 2023 and 2022 is as follows:\n\n| (Amounts in thousands of euros)         |         |         |\n|-----------------------------------------|---------|---------|\n|                                         | 2023    | 2022    |\n| Wages and salaries                      | 487,654 | 503,064 |\n| Social security                         | 113,786 | 109,684 |\n| Contributions to employee benefit plans | 11,183  | 10,897  |\n| Contributions to defined benefit plans  | 6,473   | 9,503   |\n| Termination benefits                    | 3,138   | 2,621   |\n| Variation in employee benefit provision | 1,709   | -947    |\n| Other staff costs                       | 12,603  | 18,941  |\n| TOTAL                                   | 636,546 | 653,763 |\n\n{109}------------------------------------------------\n\nImage /page/109/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked on top of a blue circle. The word \"ACERINOX\" is in a dark color, possibly black or a very dark blue, which contrasts with the white background. The blue circle partially surrounds the text, creating a sense of enclosure and emphasis.\n\nDue to the unprecedented high prices of electricity and gas, on 16 March 2023, the Labor Authority was informed of the company's decision to extend the Temporary Layoff Plan (ERTE) agreed on 16 March 2022, of the Campo de Gibraltar (Cádiz) factory, whereby a Temporary Layoff Plan was approved due to economic and productive circumstances. This extension has a duration of one year from 17 March 2023, includes the entire workforce and allows for the adaptation of staff to the production needs prevailing at any given time, thus providing considerable flexibility for management purposes. As it is an extension of the existing ERTE, it creates an environment of safety and certainty which is beneficial to all parties, helping to maintain jobs and enabling the workforce to adapt to the portfolio of orders. This ERTE has been applied to all workshops throughout the year, although the necessary activity has been maintained in order to comply with the commitments acquired with our customers.\n\nThe average number of employees for 2023 and 2022, by category, is as follows:\n\n|                       | 2023  |       | 2022  |       |\n|-----------------------|-------|-------|-------|-------|\n|                       | Men   | Women | Men   | Women |\n| Senior Vice President | 9     |       | 11    |       |\n| Director              | 24    | 7     | 19    | 5     |\n| Manager               | 243   | 53    | 220   | 48    |\n| Analyst / Supervisor  | 604   | 210   | 569   | 181   |\n| Specialist            | 339   | 124   | 312   | 130   |\n| Administrative staff  | 595   | 466   | 598   | 462   |\n| Operators             | 5,347 | 215   | 5,444 | 230   |\n| TOTAL                 | 7,161 | 1,075 | 7,173 | 1,056 |\n\nThe detail of the employees, including directors, at 31 December, by gender and category, is as follows:\n\n|                       | 2023  |       | 2022  |       |\n|-----------------------|-------|-------|-------|-------|\n|                       | Men   | Women | Men   | Women |\n| Board Members         | 7     | 4     | 7     | 4     |\n| Senior Vice President | 9     |       | 9     |       |\n| Director              | 25    | 7     | 19    | 5     |\n| Manager               | 243   | 49    | 220   | 49    |\n| Analyst / Supervisor  | 624   | 226   | 570   | 176   |\n| Specialist            | 332   | 118   | 321   | 138   |\n| Administrative staff  | 599   | 476   | 598   | 458   |\n| Operators             | 5,313 | 217   | 5,356 | 214   |\n| TOTAL                 | 7,152 | 1,097 | 7,100 | 1,044 |\n\nThese figures do not include 6 workers on partial retirement plan (60 workers in 2022).\n\nAt 31 December 2023, the number of employees in Spain with a disability equal to or greater than 33% was 43 (39 men and 4 women) (44 in 2022 (43 men and 1 woman)).\n\nAll the companies comply with the provisions of the General Law on the Rights of Persons with Disabilities and their Social Inclusion, with the exception of Acerinox Europa, S.A.U. which, due to the retirements that have taken place in recent years, does not comply with the provisions of the aforementioned Law at 31 December 2023. To remedy this, on 15 December 2023 a request was submitted to the Junta de Andalucía for authorisation to adopt alternative measures. On 1 February 2024 this authorisation was received.\n\nAt Acerinox Europa, the collective redundancy procedure approved in 2019 resulted in the departure in 2022 of the last 4 employees signed up to the plan.\n\n{110}------------------------------------------------\n\n#### **17.3 Other operating expenses**\n\nThe detail of \"other operating expenses\" is as follows:\n\n(Amounts in thousands of euros)\n\n|                                | 2023    | 2022      |\n|--------------------------------|---------|-----------|\n| Rentals                        | 18,097  | 15,735    |\n| Commercial expenses            | 179,260 | 267,503   |\n| Supplies                       | 347,689 | 530,636   |\n| Maintenance                    | 87,134  | 99,032    |\n| Outside services               | 185,022 | 188,011   |\n| Insurance                      | 28,429  | 23,210    |\n| Banking services               | 3,929   | 5,408     |\n| Other operating expenses       | 44,699  | 31,543    |\n| Taxes                          | 18,031  | 30,670    |\n| Changes in current provisions  | 1,955   | 3,295     |\n| Losses on sale of fixed assets | 2,719   | 1,987     |\n| Other extraordinary expenses   | 18,812  | 429       |\n| TOTAL                          | 935,776 | 1,197,459 |\n\nOf note was the generalised decrease in all costs due to the decrease in sales and productions. The decrease in the supplies item stands out as a result of the decrease in prices compared to the maximums reached in Europe last year, as well as the decrease in the tonnage produced. **Note 4.1.3** includes detailed information on the risk posed to the Group by the volatility of energy prices.\n\n#### <span id=\"page-110-0\"></span>**NOTE 18 – NET FINANCE COSTS**\n\nThe detail of \"net finance costs\" is as follows:\n\n(Amounts in thousands of euros)\n\n|                                                                                     | 2023     | 2022    |\n|-------------------------------------------------------------------------------------|----------|---------|\n| Interest income and other financial income                                          | 79,641   | 25,207  |\n| Dividend income                                                                     | 5        | 866     |\n| TOTAL FINANCIAL INCOME                                                              | 79,646   | 26,073  |\n| Interest and other financial expenses                                               | -101,044 | -62,799 |\n| Impairment and loss on disposal of financial investments                            | 0        | -3      |\n| TOTAL FINANCIAL EXPENSES                                                            | -101,044 | -62,802 |\n| Income from exchange differences                                                    | 2,273    | -4,624  |\n| Results from revaluation of financial instruments at fair value (currency forwards) | 317      | -3,141  |\n| FINANCIAL INCOME FROM EXCHANGE DIFFERENCES                                          | 2,590    | -7,765  |\n| NET FINANCIAL COSTS                                                                 | -18,808  | -44,494 |\n\n\"Interest income\" includes mainly the income arising from the cash placements made by the Group. The increase compared to the previous year is mainly due to higher interest rates and the Group's higher cash investments in USD. **Note 4.1.2** includes detailed information on the management of interest rate risk in the Group.\n\nBorrowing costs include mainly the interest accrued on bank borrowings and bonds issued, which are explained in **Note 12.2.3**. The increase over the previous year is due to higher interest rates.\n\nLastly, gains or losses from translation differences arise in the course of the Group's commercial transactions as well as its financial and investment transactions. The Group uses derivative financial instruments to hedge most of the transactions performed in a currency other than the functional currency of each country. The use of these instruments ensures that any exchange rate fluctuations are offset by changes with the opposite sign in respect of the arranged derivative. The differences between the two amounts are mainly due to the interest rate differences between the currencies involved in the exchange rate insurance taken out and the differences between the insurance taken out and the monetary items in foreign currency.\n\n{111}------------------------------------------------\n\nImage /page/111/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circular outline. The wordmark is in a darker shade of blue, contrasting with the lighter blue of the surrounding circle. The overall design is simple and corporate, conveying a sense of stability and professionalism.\n\n#### **NOTE 19 – TAX MATTERS**\n\n#### **19.1 Legislative amendments**\n\nThe most significant regulatory amendments approved during this period are as follows:\n\n• In March 2022, the Organisation for Economic Co-operation and Development (OECD) approved the new international taxation model known as Pillar 2, within the scope of what are known as GloBE standards. These rules aim to ensure that multinational groups pay a minimum level of tax on their profits in each jurisdiction in which they operate. The Pillar 2 standard apply to all multinational groups with a turnover of more than EUR 750 million. The basic principle of this standard, with some exceptions, is to ensure that the minimum payment in each jurisdiction is at least 15%, requiring the establishment of a supplementary tax system.\n\nA Directive was recently adopted at European Union level that defines the content of the GloBE standards in order to ensure their consistent and harmonised application in all EU Member States. This Directive should have been transposed by EU member states by 31 December 2023 at the latest, with effect from 2024. Transposition is pending in Spain, although the prior public consultation document on the transposition of the Pillar 2 Directive into Spanish law was published on 6 March 2023.\n\nThe Group has carried out an analysis of the potential impacts of the application of this standard on the Group. The country-by-country report for 2022 presented this year has been used as a basis for the analyses. The GloBE standards provide for the possibility of applying safe harbours, based on a number of established parameters, which are calculated per jurisdiction on the basis of data published in the country-by-country report. Compliance with these parameters allows companies to limit the number of jurisdictions affected by the calculation of the minimum payment. The implementation of safe harbours is a temporary measure applicable for the first three years of implementation of the law, i.e. from 2025 to 2027.\n\nFrom the analysis carried out by the Group, it follows that all jurisdictions significant to the Group would be eliminated from the application of the minimum tax, so the Group does not expect the application of this standard to have a significant impact.\n\n• In Spain, Law 38/2022 of 27 December introduced, among other things, a temporary measure concerning the calculation of corporate income tax for companies taxed under the tax consolidation regime. Commencing with tax periods beginning in 2023, the taxable income of the tax group will be determined by integrating the taxable income of the entities forming part of the tax group and 50 per cent of the individual tax losses. Any remaining individual tax losses not accounted for in the tax group's taxable income shall be integrated evenly over the initial ten tax periods beginning on or after 1 January 2024.\n\nThe group has applied the rule in the calculation of the tax for this year, although it has had no economic impact as the tax base is negative in any case. The Group has recognised carry-forward tax losses that have not been recognised for tax purposes and which are to be included on a straight-line basis over the next ten years.\n\n• On 24 May, also in Spain, Law 13/2023 was approved, which introduces amendments to Law 27/2014 on corporate income tax. In particular, the amendment concerns the calculation of the operating profit applicable to the limitation of the deductibility of financial expenses. The provision makes it clear that income, expenses or earnings that are not included in the basis of assessment for this tax are never part of the operating profit. This prevents the inclusion of dividends from foreign subsidiaries, which are exempt from the calculation of the tax, in the calculation of operating profit. The rule is applicable from 1 January 2024.\n\nThe Spanish tax group has accumulated excess operating profits that have not been utilised in previous years and that can be utilised over a period of 5 years, meaning that the application of this standard should have no impact in the medium term. From the fifth year onwards, Acerinox could be affected by this standard due to its financial structure if the operating profit of the consolidated tax Group is insufficient to cover the net financing costs, but the forward-looking estimates of the consolidated tax group made at the end of the year do not appear to show any material impact.\n\n• Corporate income tax on 18 January 2024, the Constitutional Court has declared certain corporate tax measures introduced by Royal Decree Law 3/2016, of 2 December, unconstitutional. The Court considers that the approval of these measures by Royal Decree-Law has violated Article 86.1 of the Spanish Constitution, as this regulatory instrument cannot \"affect the rights, duties and freedoms of citizens regulated in Title I\". In particular, it considers that the duty to contribute to the support of public expenditure is affected.\n\n{112}------------------------------------------------\n\nImage /page/112/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned within a white circle, which is partially enclosed by a thicker, blue arc that curves around the bottom and sides of the circle, giving the impression of a stylized globe or emblem.\n\nThe changes to corporate income tax that have been annulled include, in particular: the setting of the 25% limitation for offsetting tax losses, the introduction of a limit on the application of deductions for double taxation and the obligation to automatically include in the tax base the impairment of holdings deducted in previous years.\n\nWith the annulment of this Royal Decree 3/2016, the original Corporate Income Tax Act is once again applicable according to its original wording, which allows the recoverability of tax losses with a limit of 70% (instead of 25%) of the taxable income generated in the year. This measure has a significant impact on the recognition of unused tax credits, which the Group has taken into account this year, allowing it to capitalise the tax credits generated this year as explained in **Note 19.3.3**.\n\nThe Group, in anticipation of a possible declaration of invalidity, challenged its corporate income tax returns for the years 2016 to 2020 in 2021. These claims are currently before the National High Court. In 2022, it also challenged the 2021 corporate income tax return.\n\nThe Group, in view of the final judgement of the Constitutional Court, considers that its claims should be resolved in 2024, which will mean an income for the Group of EUR 11.5 million plus interest. These refunds mainly correspond to the higher application of carry-forward tax losses from previous years. The Group has not recognised any asset for this item during the year as it was not applicable at year-end and it has not received any notification from either the National High Court or the Tax Agency regarding the possible enforcement of the judgement.\n\n• In South Africa, the tax rate applicable for the calculation of income tax has been changed from 28% to 27%. The Group has included the effect of the change in rates on deferred tax assets and liabilities, which has had a positive effect on the income statement of EUR 437 thousand as the Group company in South Africa has mainly deferred liabilities as a result of the different accounting and tax treatment of depreciation and amortisation.\n\nIn 2022, no significant legislative amendments were passed relating to corporate income tax that could have an impact on the Group.\n\n#### **19.2 Income tax expense**\n\nThe income tax expense recognised was as follows:\n\n| (Amounts in thousands of euros) |         |         |\n|---------------------------------|---------|---------|\n|                                 | 2023    | 2022    |\n| Current tax                     | 204,632 | 262,590 |\n| Deferred taxes                  | -66,527 | -2,178  |\n| Income tax                      | 138,105 | 260,412 |\n\nThe increase in deferred tax in the year is mainly due to the recognition of tax credits relating to losses incurred by certain Group companies. **Note 19.3.3** explains the recoverability analyses conducted by the Group this year with respect to tax loss carryforwards. No additional impairment losses had to be recognised this year; on the contrary, tax credits were recognised for tax loss carryforwards generated this year, amounting to EUR 80,465 thousand, mainly corresponding to the Spanish tax group and the Columbus Stainless entity (2022: EUR 15,550 thousand recognised in the Spanish tax consolidation).\n\nThe amount recognised under \"other taxes\" in the consolidated statement of profit or loss includes the taxes paid abroad as a result of the withholdings made on the payment of interest and dividends.\n\nThe parent received dividends from its subsidiaries in the amount of EUR 306 million, most of which were exempt from tax withholdings abroad (2022: EUR 488 million, and practically all of them were exempt from taxation).\n\nWithholdings on interest payments are deductible from corporate income tax under the double taxation conventions, and they reduce the income tax expense.\n\n{113}------------------------------------------------\n\nImage /page/113/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle, which appears to be a thick line. The background is white.\n\nA reconciliation of the income tax expense recognised in the consolidated statement of profit or loss to the accounting profit is presented below:\n\n| (Amounts in thousands of euros)                               |      | 2023    | 2022         |\n|---------------------------------------------------------------|------|---------|--------------|\n| Net profit (loss) for the year                                |      | 228,128 | 556,054      |\n| Non-controlling interests                                     |      | -11,161 | 14,332       |\n| Income tax                                                    |      | 138,105 | 260,412      |\n| Other taxes                                                   |      | 273     | 477          |\n| Profit (loss) before tax                                      |      | 355,345 | 831,275      |\n| Tax on profits using local tax rate                           | 25 % | 88,836  | 25 % 207,819 |\n| Effects on tax charge:                                        |      |         |              |\n| Effect of tax rates for foreign companies                     |      | 1,264   | -2,129       |\n| Non-deductible expenses                                       |      | 39,877  | 52,750       |\n| Tax incentives not recognised in the income statement         |      | -2,301  | -2,885       |\n| Non-taxable income                                            |      | -555    | 2,721        |\n| Adjustment for prior years                                    |      | 1,167   | -914         |\n| Adjustment to tax rates related to deferred taxes             |      | -820    | -1,197       |\n| Provision for tax litigation, tax assessments and settlements |      | -104    | -110         |\n| Unrecognised tax credits                                      |      | 12,696  | 5,509        |\n| Unused tax credits used in the year                           |      | -12     | -709         |\n| Other                                                         |      | -1,943  | -443         |\n| Income tax                                                    |      | 138,105 | 260,412      |\n\nThe amount of non-deductible expenses, mainly due to the non-deductibility of the impairment of assets recognised in the Malaysian company Bahru Stainless is noteworthy, both this year and in the past. In addition, the amount of unrecognised tax credits has increased due to tax losses in some subsidiaries where the recognition criteria are not met.\n\nThe tax incentives and other tax credits not recognised in the consolidated statement of profit or loss relate mainly to tax credits for R&D&I activities.\n\n#### **19.3 Deferred taxes**\n\nThe changes in deferred tax assets and liabilities were as follows:\n\n(Amounts in thousands of euros)\n\n|                                              | 2023          |                | 2022          |                |\n|----------------------------------------------|---------------|----------------|---------------|----------------|\n|                                              | Prepaid taxes | Deferred taxes | Prepaid taxes | Deferred taxes |\n| Balance as of 1 January                      | 101,225       | 227,784        | 105,848       | 200,051        |\n| Expenses / (Income) for the period           | 48,106        | -18,421        | 63,319        | 61,251         |\n| Taxes taken directly to shareholders' equity | 2,926         | -13,162        | -30,381       | -1,205         |\n| Exchange rate variations                     | -233          | -3,783         | 72            | 5,380          |\n| Transfers                                    | 17,242        | 17,242         | -37,739       | -37,739        |\n| Other variations                             | 0             | -3,759         | 106           | 46             |\n| Balance as of 31 December                    | 169,266       | 205,901        | 101,225       | 227,784        |\n\n{114}------------------------------------------------\n\nImage /page/114/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The text is positioned within a partial blue circle, which curves around the top and sides of the word, creating a sense of enclosure and unity. The overall design is simple, clean, and corporate, conveying a sense of professionalism and reliability.\n\nThe origin of the deferred tax assets and liabilities is as follows:\n\n|                                                | Assets  |         | Liabilities |          | Net      |          |\n|------------------------------------------------|---------|---------|-------------|----------|----------|----------|\n|                                                | 2023    | 2022    | 2023        | 2022     | 2023     | 2022     |\n| Goodwill and other intangible assets           | 2,526   | 6,783   | -12,911     | -16,764  | -10,385  | -9,981   |\n| Property, plant and equipment                  | 1,120   | 683     | -135,630    | -147,684 | -134,510 | -147,001 |\n| Financial assets                               | 24      | 1,811   | -184        | -687     | -160     | 1,124    |\n| Inventories                                    | 3,442   | 4,337   | -79,807     | -75,354  | -76,365  | -71,017  |\n| Other assets                                   | 2,350   | 31      | -6,172      | -14,213  | -3,822   | -14,182  |\n| Provisions                                     | 9,531   | 12,895  | -1,464      | 2,637    | 8,067    | 15,532   |\n| Employee benefit plan                          | 30,945  | 25,729  | -11         | 38       | 30,934   | 25,767   |\n| Financial liabilities                          | 2,330   | 3,606   | -5,921      | -8,986   | -3,591   | -5,380   |\n| Other liabilities                              | 1,562   |         | -10,068     | -11,047  | -8,506   | -11,047  |\n| Other tax deductions                           | 22,663  | 19,845  |             |          | 22,663   | 19,845   |\n| Unused tax losses                              | 146,596 | 80,609  |             |          | 146,596  | 80,609   |\n| Provision for tax litigation                   |         |         | -7,556      | -10,828  | -7,556   | -10,828  |\n| Deferred tax assets/liabilities                | 223,089 | 156,329 | -259,724    | -282,888 | -36,635  | -126,559 |\n| Offsetting deferred tax assets and liabilities | -53,823 | -55,104 | 53,823      | 55,104   |          |          |\n| Deferred tax assets/liabilities                | 169,266 | 101,225 | -205,901    | -227,784 | -36,635  | -126,559 |\n\nMost of the deferred taxes have a reversal period of more than one year.\n\nAs laid down in the corporate income tax accounting policy (**Note 2.19**), the Group only offsets deferred tax assets and liabilities when there is a legally enforceable right to do so, the assets and liabilities correspond to the same tax authority and the Group plans to realise current tax assets or settle current tax liabilities on a net basis.\n\n#### **19.3.1 Deferred tax liabilities**\n\nThe deferred tax liabilities recognised include those arising from property, plant and equipment and relate mainly to the different tax and accounting treatment of depreciation as permitted by the laws of certain countries. These liabilities arose mainly from North American Stainless, Inc., Columbus Stainless, Ltd. and the VDM Metals Group. Deferred tax liabilities from inventories are also significant due to the different accounting and tax treatment of inventory valuation; they arise mainly from Germany.\n\nWith respect to the deferred tax liabilities arising from investments in subsidiaries, as explained in **Note 3**, certain companies forming part of the Consolidated Group have reserves which could be taxable if distributed, since certain legislation envisages withholdings at source that affect the payment of dividends, as well as limitations on the deductibility of gains from other countries distributed in the form of dividends. The Group recognises the tax effect in this connection provided that it considers that such reserves will have to be distributed in the foreseeable future. On the other hand, the Spanish General State Budget Law for 2021 (Law 11/2020, of 30 December) includes, among other measures, a corporate income tax amendment affecting the exemption from taxation of dividends received from Group companies in certain circumstances. As a result of the entry into force of this amendment to income tax, the parent of the Acerinox Group has had its tax exemption for dividends received reduced to 95%, whereby it is now taxed on 5% of the dividends received from subsidiaries, which are treated as non-deductible expenses relating to management of the ownership interest. As with the distributable reserves mentioned in the previous paragraph, the Group also takes into account the tax effect if it believes that the distribution of reserves from subsidiaries will be required in the foreseeable future.\n\nThis limitation could give rise to the recognition of a deferred tax liability for the undistributed retained earnings of Group companies, provided that these are expected to be repatriated in the form of dividends in the foreseeable future.\n\nAlthough the Group does not have a general policy of distributing dividends from subsidiaries to the parent, each year the Group analyses the equity position of all its subsidiaries, while also taking into account existing taxes, in order to determine whether reserves should be repatriated through the distribution of dividends. In view of the significant amount of dividends distributed by North American Stainless in the last three years and at their level of income generation year-on-year, the Group considers that it will not distribute dividends from the reserves of the Group companies in the foreseeable future and, accordingly, it did not recognise a deferred tax liability in this connection. Also, there are very few companies in the Consolidated Group that have significant distributable reserves that will be distributed in the foreseeable future.\n\n{115}------------------------------------------------\n\nImage /page/115/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, stacked vertically. The text is positioned inside a blue circle that is not fully closed at the top.\n\n#### **19.3.2 Deferred tax assets**\n\nAt 31 December 2023 and 2022, the Group had tax assets arising from carry-forward tax losses, to be used within the following periods:\n\n| (Amounts in thousands of euros) |  |\n|---------------------------------|--|\n|---------------------------------|--|\n\n|                     | 2023    | 2022    |\n|---------------------|---------|---------|\n| From 1 to 5 years   | 68,079  | 3,008   |\n| From 6 to 10 years  | 18,401  | 76,206  |\n| From 11 to 20 years | 940     | 115     |\n| From 21 to 30 years |         | 2,332   |\n| No expiration date  | 243,206 | 179,769 |\n| TOTAL               | 330,626 | 261,430 |\n\nNot all the tax assets included in the table have been recognised by the Group. The recognised tax assets amounted to EUR 146,596 thousand in 2023 (2022: EUR 80,609 thousand).\n\nThe distribution by country of the recognised tax assets is as follows:\n\n| (Amounts in thousands of euros) | 2023    | 2022   |\n|---------------------------------|---------|--------|\n| Spain                           | 125,744 | 61,179 |\n| South Africa                    | 13,465  |        |\n| USA                             | 42      | 13,903 |\n| France                          | 2,125   | 2,215  |\n| Poland                          | 11      |        |\n| Italy                           | 1,391   |        |\n| Sweden                          | 2,589   | 2,738  |\n| Chile                           | 237     | 250    |\n| Colombia                        | 137     | 115    |\n| UK                              | 58      | 209    |\n| Mexico                          | 699     |        |\n| Argentina                       | 98      |        |\n| TOTAL                           | 146,596 | 80,609 |\n\nDuring the year, tax credits recognised have increased mainly due to the capitalisation of new credits generated in the year as a result of tax losses obtained by both the Spanish consolidated tax group and Columbus.\n\nAs explained in **Note 19.3.1**, the Group considers that after the annulment of Royal Decree 3/2016 and the possibility of offsetting tax bases with 70% of the tax bases generated in the future, this will allow their recovery in a reasonable period of less than ten years.\n\nA comparison of the two tables above reveals that the Group has unrecognised tax assets amounting to EUR 184,030 thousand, equal to tax losses of EUR 759 million, which were not recognised for accounting purposes as they did not meet the recognition criteria (2022: EUR 180,821 thousand of unrecognised tax assets, equal to losses of EUR 748 million).\n\nThe Group also has assets for unrecognised temporary differences of EUR 360.9 million (EUR 266.3 million in the previous year) arising from the accounting impairment of Acerinox, S.A.'s investments in some of its investees, which have not been recognised as the timing of their reversal is not known, and from the impairment of assets recognised in other entities. These assets are not deductible until the assets giving rise to the related temporary difference are realised.\n\nOn 22 June 2015, the Group Company Bahru Stainless received confirmation from the Malaysian Ministry of Economy that tax relief had been approved in respect of the investments made in the country from 2009 to 2014. This relief consists of corporate income tax credits for an amount equal to the investments made in certain items of property, plant and equipment, totalling MYR 1,806 million (EUR 356 million to the tax base). As in the case of the tax loss carryforwards, the Group did not recognise a deferred tax asset in this connection as it was still unable to estimate the timing of the recoverability thereof at the reporting date. At the same time, the Company also has unused temporary differences as a result of the different depreciation and amortisation methods for accounting and tax purposes (\"capital allowances\"), amounting to EUR 340 million (2022: EUR 361 million). These temporary differences have an unlimited utilisation period in Malaysia.\n\n{116}------------------------------------------------\n\nImage /page/116/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is enclosed within a blue circle, with the top portion of the circle being thicker than the bottom portion. The background is white.\n\nThe Group Company North American Stainless is also entitled to tax relief for investments in assets that contribute to recycling. This relief is deducted from the calculation of the Kentucky State tax and amounted to EUR 528 million at 2023 year-end (year-end 2022: EUR 549 million). Of the total tax relief, EUR 16.1 million expire in 2028 and EUR 4.5 million expire in 2031. The rest are unlimited. Application of this relief is limited to 50% of the tax payable in the State of Kentucky, or USD 2.5 million/year. The Group only recognises a deferred tax asset for assets arising from investments which expire and relate to a specific tax relief programme approved in 2005 by the State of Kentucky (Major Credits Program). At 2023 yearend, EUR 7.2 million (2022: EUR 6.8 million) were recognised as deferred tax assets. The Group has recognised an additional EUR 629 thousand this year.\n\nDeferred tax assets arising from deductions pending utilisation, amounting to EUR 22,663 thousand (2022: EUR 19,845 thousand), relate mainly to the Spanish tax group, except for the EUR 7.2 million mentioned in the preceding paragraph in relation to North American Stainless and EUR 671 thousand in relation to Columbus Stainless. The Group also took these tax benefits into consideration when conducting the recoverability analyses.\n\n#### **19.3.3 Analysis of the recoverability of deferred tax assets**\n\nAs stated in the accounting policies, the Group recognises deferred tax assets in the consolidated statement of financial position provided that those assets are recoverable within a reasonable period, also taking into consideration the legally established limitations on their use. The Group considers a period of approximately ten years to be reasonable if permitted by tax legislation.\n\nTo assess the recoverability of the unused tax assets, the Group prepares a five- to ten-year budget for each of the companies with recognised tax assets, based on which it performs the tax adjustments necessary to determine the tax bases. The Group also takes into account the limitations on the offset of tax bases established in the respective jurisdictions, as well as the minimum payment regulations. In addition, the Group assesses the existence of deferred tax liabilities against which tax losses may be offset in the future.\n\nIn preparing budgets, the Group considers the financial and macroeconomic circumstances and those of the stainless-steel market itself, adapted to the entity's operating environment. Parameters such as expected growth, use of installed production capacity, prices, etc. are projected on the basis of the forecasts and reports of independent experts, as well as historical figures and the targets set by management. Relevant key assumptions such as exchange rates, raw material prices or energy prices are extrapolated using highly conservative criteria, always tied to the most recent values recorded in the pertinent markets at the date of the analysis.\n\nAt the end of the year, the Group entities that record activated tax credits in their financial statements are mainly Spanish. Columbus Stainless, the Group's company in South Africa, has also recorded the tax credits generated during the year, which are the only ones pending offset.\n\n• In the case of the Spanish entities, the tax assets arise mainly from the consolidated tax group in Spain, which comprises all the Spanish Group companies with the exception of those established in the regions of Álava, Vizcaya and Guipúzcoa. Tax assets arising from tax loss carryforwards from the consolidated tax group in Spain amounted to EUR 220 million at year-end, of which EUR 96 million were not recognised as deferred tax assets. In this financial year, the fall in demand, due to high inventories in the supply chain, as well as the decrease in stainless-steel prices in Europe, which reached record lows, caused some of the Group's Spanish companies to report losses. Following an appropriate impairment analysis, the Group has deemed it appropriate to capitalise the tax credits incurred this year.\n\nIn Spain there are limitations on the use of carry-forward tax losses. Royal Decree 3/2016 introduced an amendment to the Corporate Income Tax Act, limiting the possibility of offsetting carry-forward tax losses to 25% of the taxable income generated in a given year. As explained in Note 19.1 on regulatory modifications, the Constitutional Court has declared this Royal Decree null and void, so that the limitations established in the original Corporate Income Tax Act, which raise the compensation percentage to 70%, are back in force. In the case of entities subject to the tax regimes in force in Álava, Vizcaya and Guipúzcoa, the limitation is 50%.\n\nAs explained in Note 8.1, in this financial year, the Group has updated the five-year results forecasts based on the new circumstances and taking into account the future strategic plans approved by the management, which have been designed with the aim of trying to improve the results of Acerinox Europa, the main component of the Spanish fiscal Group, redirecting a greater part of its sales towards end customers and towards products with higher added value. The Group has also engaged an independent expert to perform an impairment analysis.\n\nTo analyse the recoverability of the tax credits capitalised in the Spanish tax group, the Group has taken into account the budgets of Acerinox Europa prepared by the independent expert, in addition to the five-year budgets of the other companies in the consolidated tax group.\n\n{117}------------------------------------------------\n\nImage /page/117/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The word is positioned inside a blue circle that is open on the left side.\n\nThe key assumptions considered in the preparation of the budgets are based on demand estimates, raw material and selling prices, exchange rates, consumer price increases, energy costs estimates and the Company's strategy itself.\n\nIn view of all these aspects and taking into account the new limitations on the application of carry-forward tax losses, the five-year budgets extrapolated to ten years taking into account historical average yields and margins, justify the recovery of all the credits capitalised in a period of less than ten years and all the deductions pending application, also allowing the Group to recover the carry-forward tax losses generated in this year, amounting to EUR 259 million, so it has capitalised them.\n\nSensitivity analyses were performed on these estimates to determine the risk that a change in the assumptions may require an additional impairment loss to be recognised on these deferred tax assets. The Group has adopted a prudent approach this year, preferring only to capitalise the tax credits generated this year and not to exceed the ten-year limit established in its policy. Capitalised tax credits have a recovery period of eight years. A 10% fluctuation of the considered results would allow for a further recovery of the capitalised tax bases in a period of less than ten years. Among the possible ten-year projection scenarios, the Group selected that which it deems the most reasonable on the basis of historical factors and in the five-year budget made by the independent expert.\n\n- The aforementioned circumstances in the European market have also affected Columbus, the Group's South African factory, as Europe is its main export market. The successful strategy followed by the company, which consists of balancing stainless-steel production with carbon steel for the local market, allows Columbus to be less exposed to the situation of the international markets. **Note 8.1** includes a detailed analysis of the assumptions considered in the fiveyear budgets prepared by management. These same budgets are the basis for the analysis of the recoverability of the tax credits capitalised this year. The company had no outstanding tax credits from previous years. With the approved budgets, the Group expects to recover the carry-forward tax losses within three years and has therefore capitalised the corresponding tax credits.\n- With respect to the other European entities, the recognised tax assets arose from the crisis years, and the amount thereof has been reduced since 2013 through the generation of profits, enabling their partial recovery. The transfer pricing policies adopted by the Group to remunerate and define transactions with distributors render it unlikely that those entities will suffer significant losses. The existence of a transfer pricing bilateral advance pricing agreement with similar entities and the various mutual agreements reached in various countries make it unlikely that the results of those entities will differ significantly from the projected results. Therefore, the conclusions reached are not expected to change. The Group analysed the recoverability of the tax assets and concluded that, based on the estimated results, they are expected to be recoverable within a reasonable period of less than ten years.\n\n#### **19.4 Current tax**\n\nAt 31 December 2023, there is a current income tax asset balance of EUR 13,506 thousand (2022: EUR 22,770 thousand) and a current income tax liability of EUR 12,601 thousand (2022: EUR 58,295 thousand).\n\n#### **19.5 Tax audits and years open for review**\n\n#### **19.5.1 Tax audits**\n\nThe detail of the status of each of the tax audits under way at 2023 year-end, or that were concluded but signed on a contested basis and are currently under appeal, is as follows:\n\n#### **Italy**\n\nIn 2011, the subsidiary Acerinox Italia, S.r.l. underwent a tax audit for 2007, 2008 and 2009.\n\nBetween 2012 and 2014, the tax assessments for the three years were received, primarily indicating transfer pricing adjustments in relation to sale and purchase transactions between the Company and the Group's factories in Spain and, to a lesser extent, in South Africa. The resulting tax payable amounted to EUR 16 million, plus interest of EUR 3.5 million. No penalties were imposed.\n\nSubsequently, in 2016, 2017, 2018, 2019 and 2021, without receiving prior notice of the commencement of tax audits, the Company received transfer pricing tax assessments relating to 2011, 2012, 2013, 2014 and 2015, which automatically applied criteria similar to those followed in the previous tax audits. These tax assessments resulted in adjustments to the tax base of\n\n{118}------------------------------------------------\n\nImage /page/118/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, bold, sans-serif font. The word is positioned inside a blue circle that is not fully closed at the top.\n\nEUR 4.3 million in 2011, EUR 4.9 million in 2012, EUR 3 million in 2013, EUR 2.3 million in 2014 and EUR 3.8 million in 2015, and amounts payable of EUR 1.5 million, EUR 1.6 million, EUR 1 million, EUR 954 thousand and EUR 1.4 million, respectively. No penalties were imposed in this case either. The Group lodged appeals against all these tax assessments at the Milan Provincial Tax Commission within the respective time limits, and at the same time requested the suspension of payment of the debts until the end of the procedures. In addition, a request was filed at the Spanish and Italian authorities to eliminate double taxation on the basis of Convention 90/436/EEC, of 23 July 1990. The Group has provided guarantees of EUR 1.5 million to cover the suspension of the debts in Italy.\n\nIn addition, in December 2018 the request for the elimination of double taxation with South Africa was submitted in Italy in respect of the tax audits under way in relation to 2011 to 2013. On 9 March 2021, the Company had to waive this procedure so that regularisations derived from friendly agreements could be initiated and negotiations carried out to apply the same criteria reached in such agreements to transactions with third countries.\n\nOn 3 October 2019, both the Group entity in Italy and the Spanish entities affected by the adjustments were notified of the agreement reached by the Spanish and Italian authorities for 2007 to 2013, which reduced the transfer pricing adjustments initially proposed by the Italian tax inspectors for the Spanish entities from EUR 84 million to EUR 41 million and completely eliminated double taxation. Following the aforementioned agreements, Spain recognised a tax refund of EUR 5.8 million and an increase in the tax losses equal to EUR 5.9 million in tax assets. In Italy, the agreements resulted in the elimination of all the tax losses and, accordingly, the Group derecognised tax assets recognised amounting to EUR 8.3 million. The amounts recoverable in Spain were received on 17 February 2020. The Group nevertheless submitted pleadings in Spain against the execution of the agreements, due to failure to recognise late-payment interest for the refundable amount of EUR 5.9 million.\n\nOn 18 November 2021, the notifications of the amicable settlements reached between the Spanish and Italian authorities for the 2014 and 2015 tax years were received. With regards to 2014, the Italian authorities cancelled all transfer pricing adjustments made on transactions with Spanish companies. As for 2015, Italy waived EUR 2.2 million of the adjustments initially imposed, leaving adjustments of EUR 404 thousand to be recognised in Spain as less taxable income in 2015. On 12 April 2022, a refund was received in Spain of EUR 47 thousand corresponding to the corporate income tax liability plus EUR 3 thousand in late payment interest. In addition, tax loss carryforwards in Spain have increased by EUR 101 thousand.\n\nAll agreements reached between the Spanish and Italian authorities are pending execution in Italy. Although the amicable agreements only extend to the transactions performed between the Italian entity and the respective factories in Spain, the same agreement should technically apply to sale and purchase transactions with third countries. In this respect, and following discussions held with the Italian tax authorities, the Group has closed the negotiations relating to the transactions between Italy and the Columbus Stainless Group company from 2007 to 2013. As a result of the aforementioned agreements, on 16 June, the Group company Acerinox Italia has paid EUR 3,633 thousand (EUR 2,544 thousand of corporate income tax and EUR 1,096 thousand of interest), which the company had already provisioned, and has therefore proceeded to reduce the provision by the aforementioned amounts.\n\nIn relation to the appeals filed for the years 2014, 2015 and 2016, the Milan Provincial Tax Commission has already been informed of the agreements reached and the hearing has been postponed in order to try to reach an agreement on the same terms and for the same reasons as in previous years.\n\nThis year, following the submission of the transfer pricing documentation for 2017, the Company has received transfer pricing adjustment assessments, applicable to the tax base in the amount of EUR 1.1 million. Prior to the issuance of the assessments, the tax authorities informed the Group that they are willing to close all outstanding adjustments, to accept the transfer pricing policy adopted by the Group and to finalise the recurring transfer pricing adjustments.\n\nHowever, while negotiations continue, the Group intends to follow the same procedure for 2017 as in previous years, i.e. it will file an appeal in Italy and request the elimination of double taxation in Spain through the Amicable Agreement procedure.\n\nFollowing the review at year-end of the provision recorded for open litigation in Italy and the opinion received from the experts advising it on the matter, the Group has decided to maintain the provision in the amount of EUR 7,556 thousand, which is equivalent to the amount it calculates will be payable in Italy for the amicable agreements pending execution and open litigation relating to transfer pricing adjustments for transactions carried out with third countries in 2014, 2015, 2016 and 2017.\n\n{119}------------------------------------------------\n\nImage /page/119/Picture/1 description: The image shows the Acerinox logo. The logo consists of a white circle with a thick blue border. Inside the circle, the word \"ACERINOX\" is written in blue, bold, sans-serif font. The text is positioned in the upper-left quadrant of the circle.\n\n#### **Germany**\n\nOn 14 December 2020, the Group Company in Germany, Acerinox Deutschland, GmbH, was notified of the commencement of a tax audit relating to 2015 to 2018. For those years, the Group had a bilateral advance pricing agreement applicable to transactions between the Group's Spanish plants and Acerinox's subsidiary in Germany. On 12 January 2023, the inspector's report was received with a proposal to complete the audit without adjustments, pending the issuance of the final report.\n\nWith regard to the VDM companies in Germany, an audit procedure was initiated in June 2021 for the financial years 2016 to 2018. The procedures have not yet been completed and no report has been prepared to date from which the existence of corrections could be deduced.\n\nThe renewal of the previous bilateral valuation agreement between the Group's factories in Spain and the Group's distributor in Germany (Acerinox Deutschland GmbH) is still in progress. The application was submitted on 29 June 2021, on the same terms as the ones in force until 31 December 2021.\n\n#### **Spain**\n\nOn 21 December 2023, the companies Acerinox, S.A., Acerinox Europa S.A.U. and Roldan received notification of the commencement of partial verification and investigation proceedings limited to the verification of the request for rectification of corporate income tax for the year 2021 submitted by the Group, as well as the deductions for technological innovation (TI) expenses pending application, generated in the years 2017 to 2021.\n\nThe first meeting took place in February 2024.\n\n#### **Chile**\n\nIn December 2023, an inspection was initiated at the Group's subsidiary in Chile, in order to review the tax losses pending recovery accumulated since 2012. To date, the inspection is still ongoing and all the requested information has been provided.\n\n#### **Malaysia**\n\nIn February 2022, the Group's two entities in Malaysia were notified of the opening of a transfer pricing inspection procedure relating to the financial years 2015 to 2020.\n\nOn 2 December 2022, the inspection report was received, bringing the inspection proceedings to an end. In the case of Bahru Stainless, Sdn. Bhd, the inspection report includes an adjustment given that the interest accrued from 2019 on the loan granted by Acerinox, S.A. until its full capitalisation in 2021 is considered non-deductible, as it is considered to be a capital contribution from that date. This adjustment has no effect because there was a restriction on the deductibility of interest that prevented it from being deducted. In addition, the company has no recognised deferred tax assets.\n\nAs regards the entity Acerinox SC Malaysia Sdn. Bhd, the inspection has been completed in conformity and without any adjustment.\n\n#### **Other inspection activities**\n\nDuring the year, inspections were carried out at VDM Metals Japan K.K. and, for the years 2020 to 2022, at VDM Metals Korea Co. Ltd, relating to the year 2021. Both inspections have been completed without significant adjustments.\n\n#### **19.5.2. Years open for review**\n\nUnder current legislation, taxes cannot be deemed to have been definitively settled until the tax returns filed have been reviewed by the tax authorities or until the deadline for registration has expired.\n\n{120}------------------------------------------------\n\nImage /page/120/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif, bold letters. The word is positioned inside a blue circle that is open on the right side.\n\n#### **Spain**\n\nPursuant to the Spanish Corporate Income Tax Law, carry-forward tax losses declared in the tax returns for years open for review become statute-barred ten years from the day following the final day of the period established for filing the tax return or self-assessment for the tax period in which the right to offset arose. Once this period has elapsed, taxpayers must demonstrate that the carry-forward tax losses that they wish to offset, and the amount thereof, are appropriate by submitting the assessment or self-assessment and the accounting records, together with evidence that they were filed at the Companies Registry within the aforementioned period.\n\nAt 31 December 2023 and 2022, Acerinox, S.A. and the companies in the consolidated tax group had all the taxes applicable to them open for review in relation to the following years: Type of tax\n\n|                      | 2023      | 2022      |\n|----------------------|-----------|-----------|\n| Corporate income tax | 2017-2022 | 2017-2021 |\n| Value added tax      | 2020-2023 | 2019-2022 |\n| Customs duties       | 2020-2023 | 2019-2022 |\n| Personal income tax  | 2020-2023 | 2019-2022 |\n\n#### **Other countries**\n\nThe other Group entities have the taxes for the years established by their respective local jurisdictions open for review. The Directors of the parent and of its subsidiaries do not expect that any significant additional liabilities will arise in the event of a tax audit.\n\n#### <span id=\"page-120-0\"></span>**NOTE 20 – RELATED PARTY BALANCES AND TRANSACTIONS**\n\n#### **20.1 Related parties**\n\nThe consolidated financial statements include transactions performed with the following related parties:\n\n- Key executives of the Group and members of the Boards of Directors of the various Group companies; and\n- Significant shareholders of the parent.\n\nTransactions performed between the Company and its subsidiaries, which are related parties, are carried out, from the standpoint of their subject-matter or terms and conditions, in the ordinary course of the Company's business activities and have been eliminated on consolidation. Therefore, they are not disclosed in this Note.\n\n#### **20.2 Related party transactions and balances**\n\nThe only transactions carried out with related parties relate to the Directors and key management personnel in payment for the functions performed, all of which are carried out on an arm's length basis.\n\n#### **a) Directors and key management personnel**\n\nThe remuneration received during the year by the twenty-four members of the Management Committee and who do not hold a position on the Board of Directors of Acerinox, S.A. amounts to EUR 12,044 thousand. Of this amount, EUR 5,308 thousand are salaries, EUR 5,081 thousand are variable remuneration corresponding to the previous year's results and EUR 1,655 thousand are benefits in kind, partly derived from the shares they received for completing the third cycle of the multiyear remuneration plan, as explained below. They did not receive any per diems during this financial year.\n\nIn December 2023, at the proposal of the Appointments and Remuneration Committee, a Management Committee was created that included not only those who report directly to the Chief Executive Officer but also those who, without this direct reporting line, perform a corporate function in the company's Central Services and whose remuneration includes a specific retention system.\n\nIn 2022, the nine senior executives received EUR 8,124 thousand, of which EUR 3,061 thousand related to salaries, EUR 4,082 thousand to variable remuneration based on the previous year's results and EUR 981 thousand to remuneration in kind. No per diems were received.\n\n{121}------------------------------------------------\n\nImage /page/121/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle. The text is in a sans-serif font and is positioned in the upper-left quadrant of the circle.\n\nIn 2023, the members of the Board of Directors of Acerinox, S.A., including those who also hold senior executive positions and sit on the Boards of Directors of other Group companies, earned EUR 4,129 thousand in fixed allowances, attendance fees, and fixed and variable salaries (based on the previous year's results), of which EUR 1,490 thousand related to salaries and fixed allowances for Directors, EUR 679 thousand to attendance fees, EUR 1,500 thousand to variable remuneration based on the previous year's results and EUR 460 thousand to remuneration in kind. In 2022, the remuneration received amounted to EUR 4,250 thousand, of which EUR 1,443 thousand related to salaries and fixed allowances of Directors, EUR 726 thousand to attendance fees, EUR 1,500 thousand to variable remuneration based on the previous year's results and EUR 581 thousand to remuneration in kind.\n\nWith regard to the breakdown of the Chief Executive Officer's variable remuneration, the annual bonus for 2022 has been settled in this year. The metrics used for their calculation combined financial, environmental and other business aspects specified in the Annual Report on Directors' Remuneration (IARC) for the year.\n\nThe Appointments, Remuneration and Corporate Governance Committee considered the different levels of compliance and submitted its proposal to the Company's Board of Directors, which generated a combined achievement coefficient that resulted in a preliminary bonus of EUR 740 thousand and a bonus pool (a percentage to be distributed of 0.616% of EBITDA, shared with the rest of the senior executives) of an additional EUR 962 thousand. As the maximum remuneration for this item is capped, the total bonus received amounted to EUR 1,500 thousand. This amount was paid during the month of March.\n\nAs regards the long-term incentive, due to the application of the metrics of comparable companies in the terms described in the Annual Report on Directors' Remuneration, the Chief Executive Officer was awarded 23,498 Acerinox, S.A. shares, after deducting the amount corresponding to personal income tax.\n\nIn relation to the multi-year remuneration or long-term incentive (LTI) plan, the terms and conditions of which are detailed in **Note 16.1.2**, the expense incurred in the year in relation to the Chief Executive Officer and senior executives, the balancing entry of which is recognised under \"other equity instruments\", amounts to EUR 1,429 thousand, of which EUR 233 thousand relate to the Chief Executive Officer (2022: EUR 1,146 thousand, accrued by senior executives, of which EUR 286 thousand relate to the Chief Executive Officer). During the year, the shares corresponding to the third cycle of the first approved sharebased remuneration plan were delivered. A total of 110,563 shares were delivered (109,378 shares corresponding to the second cycle were delivered in 2022), after deducting applicable withholdings, of which 23,498 corresponded to the Chief Executive Officer (2022: 34,537). The difference between the amount recorded as other equity instruments corresponding to that cycle and the amount of shares finally delivered, amounting to EUR -769 thousand, has been recorded against equity under the \"reserves\" caption (2022: EUR -810 thousand).\n\nThere are obligations arising from certain senior executive retirement benefit arrangements amounting to EUR 18.8 million (2022: EUR 17.9 million), of which EUR 5.5 million correspond to the Chief Executive Officer (2022: EUR 5.3 million). Since these obligations were duly insured in both 2023 and 2022, and their estimated amount was covered by cash flows arising from the insurance policies taken out for this purpose, no liabilities were recognised in this connection. In 2023, the amount of EUR 458 thousand has been contributed to the insurance company (2022: EUR 1,512 thousand). There are no obligations contracted with proprietary or independent directors of Acerinox, S.A. At 31 December 2023 there are no advances or loans granted to or balances with members of the Board of Directors or senior executives.\n\nThe Company's Directors and their related parties were not involved in any conflict of interest that had to be reported pursuant to Article 229 of the Consolidated Spanish Limited Liability Companies Law.\n\nThe Group has taken out a third-party liability insurance policy which covers the directors and senior executives, as well as Group employees. The premium paid in 2023 amounted to EUR 754 thousand (2022: EUR 718 thousand).\n\nIn 2023 and 2022, the members of the Board of Directors did not perform any transactions with the Company or with Group companies that were outside the normal course of business or were not on an arm's length basis.\n\n#### **b) Significant shareholders**\n\nThe Acerinox Group has not entered into any related party transactions with any significant shareholders in 2023 or 2022.\n\n#### <span id=\"page-121-0\"></span>**NOTE 21 – AUDIT FEES**\n\nThe shareholders at the Annual General Meeting held on 23 May 2023 resolved to reappoint the auditors \"PricewaterhouseCoopers Auditores, S.L.\" to perform the review and statutory audit of the financial statements of ACERINOX, S.A. and its Consolidated Group for 2023.\n\nThe detail of the fees and expenses incurred for services rendered by the audit firms that audited the Acerinox Group's financial statements in 2023 and 2022, respectively, and their associate firms, is as follows:\n\n{122}------------------------------------------------\n\nImage /page/122/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a gap at the bottom right. The word \"ACERINOX\" is in black.\n\n#### (Amounts in thousands of euros)\n\n|                                 | 2023                      |                      |       | 2022                      |                      |       |\n|---------------------------------|---------------------------|----------------------|-------|---------------------------|----------------------|-------|\n|                                 | PWC<br>Auditores,<br>S.L. | PWC<br>International | TOTAL | PWC<br>Auditores,<br>S.L. | PWC<br>International | TOTAL |\n| For audit services              | 408                       | 1,150                | 1,558 | 371                       | 1,049                | 1,420 |\n| For tax advisory services       |                           | 9                    | 9     |                           | 7                    | 7     |\n| For other verification services | 128                       | 18                   | 146   | 70                        | 21                   | 91    |\n| For other services              |                           |                      |       |                           |                      | 0     |\n| TOTAL                           | 536                       | 1,177                | 1,713 | 441                       | 1,077                | 1,518 |\n\n\"Other audit-related services\" includes the limited review of the interim condensed consolidated financial statements as at 30 June 2023 and 2022, the report on agreed-upon procedures regarding the system of Internal Control over Financial Reporting (ICFR) and the report on agreed-upon procedures relating to the achievement of the financial ratios required by the Borrowing Base Facility of Columbus Stainless and the ICO in Spain, and other agreed-upon procedures performed in accordance with ISRS 4400 in Malaysia. For the first time, this year the independent review of the non-financial information contained in the Consolidated Statement of Non-Financial Information in the Consolidated Group's 2023 Directors' Report is included in other audit-related services.\n\nThe amounts detailed in the foregoing table include the total fees for services rendered in 2023 and 2022, irrespective of when they were billed.\n\nOther audit firms billed the Group in 2023 for fees and expenses for audit services amounting to EUR 222 thousand (2022: EUR 151 thousand).\n\n#### <span id=\"page-122-0\"></span>**NOTE 22 – EVENTS AFTER THE REPORTING PERIOD**\n\n**Acerinox, S.A. closes an agreement for the acquisition of the US company Haynes International**\n\nThe Boards of Directors of Acerinox, S.A. and Haynes International have agreed to the acquisition by the Acerinox Group of 100% of Haynes International (Haynes), a US-listed company based in Indiana (United States) specialising in the specialty alloys sector.\n\nThe Haynes Board of Directors will submit to its shareholders the sale of 100% of its shares. If the sale agreement is accepted by a majority of Haynes shareholders, it will be binding on all of them and they will receive the agreed amount (USD 61 per share) in cash, for a total consideration of USD 798 million, corresponding to an enterprise value of USD 970 million.\n\nHaynes will become wholly owned by North American Stainless (NAS), which in turn is wholly owned by Acerinox, S.A.\n\nThe agreement will be subject to prior clearance by the US competition authorities and the US Foreign Investment Committee.\n\nThe closing of the transaction, and thus the takeover of the Haynes Group, is subject to the approval of Haynes' own Annual General Meeting and the aforementioned competition authorities. Depending on the date of obtaining approval, it is estimated that the transaction could go through by mid-2024.\n\nWith this deal, Acerinox will strengthen its position in the North American market, where it is currently the leader in the stainless-steel segment, and further solidify its dominant position in the global high-performance alloy markets.\n\n#### **Interim dividend**\n\nThe Board of Directors of Acerinox, S.A. held on 20 December 2023 has decided to propose to the Ordinary Annual General Meeting of Shareholders of the Company a dividend of EUR 0.62 per share charged to 2023 results, of which EUR 0.31 were paid as an interim dividend on 27 January 2024. This dividend will be submitted for approval at the Annual General Meeting to be held in 2024.\n\n{123}------------------------------------------------\n\nImage /page/123/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a semi-circular fashion. The text is a dark blue color. The text is enclosed within a circular border, also in dark blue. The background is white.\n\n#### **Acerinox Europa, S.A.U. agreement**\n\nAcerinox Europa began the process of renewing the IV Collective Bargaining Agreement in January 2023. The company is dedicated to implementing a new model at this plant to address its financial losses and effectively compete in the market. This transformation involves regaining productivity through greater flexibility and versatility of its workforce.\n\nIn this context, after months of negotiations, a strike began at the Campo de Gibraltar plant on 5 February. At the time of publication of these results, the strike persists despite the Company's stated willingness to negotiate.\n\n{124}------------------------------------------------\n\nImage /page/124/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, centered within a white circle. A blue crescent shape partially surrounds the top and right side of the circle, creating a frame-like effect.\n\nFree translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.\n\n{125}------------------------------------------------\n\n2023 Integrated Annual Report\n\nNon-financial information statement (NFIS)\n\n| Letter from the Chief<br>Executive Officer         | 2  |\n|----------------------------------------------------|----|\n| 1. Business model                                  | 4  |\n| 1.1 Value creation                                 | 9  |\n| 1.2 About the Group                                | 10 |\n| 1.3 Parent                                         | 14 |\n| 1.4 Production<br>companies                        | 14 |\n| 1.5 Sales subsidiaries                             | 16 |\n| 1.6 Relevant events                                | 17 |\n| 2. Strategy                                        | 19 |\n| 2.1 Global context                                 | 19 |\n| 2.2 Strategic plan                                 | 24 |\n| 2.3 Risk management                                | 28 |\n| 3. Governance                                      | 32 |\n| 3.1 Board of directors                             | 32 |\n| 3.2 Annual shareholders'<br>meeting                | 37 |\n| 4. Economic<br>performance                         | 38 |\n| 4.1 Production                                     | 38 |\n| 4.2 Financial results                              | 40 |\n| 4.3 Excellence 360° plan                           | 50 |\n| 4.4 Acerinox shares                                | 51 |\n| 4.5 Shareholder<br>remuneration                    | 55 |\n| 4.6 European taxonomy<br>on sustainable<br>finance | 56 |\n\n| 5.1 Ethical, responsible,<br>and transparent<br>corporate governance | 70 |\n|----------------------------------------------------------------------|----|\n|----------------------------------------------------------------------|----|\n\n- \n- \n- \n- \n\n- \n- \n- -\n\t-\n\t-\n\t-\n\nImage /page/125/Picture/19 description: The image is an abstract composition in shades of gray, featuring a series of curved and straight lines that create a sense of depth and movement. The lines vary in thickness and intensity, with some appearing sharp and defined, while others are blurred and diffused. The overall effect is one of fluidity and dynamism, with the lines seeming to flow and intersect in a complex and intricate pattern.\n\n{126}------------------------------------------------\n\nImage /page/126/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, blue letters. The text is positioned inside of a blue circle that is open on the left side.\n\n## **Letter from the Chief Executive Officer**\n\n**GRI 2-22**\n\nImage /page/126/Picture/4 description: A man in a suit and tie is shown in a portrait. He has short, dark hair and a light complexion. He is wearing a blue suit with a light blue tie. The background is a blurred green.\n\n**Mr. Bernardo Velázquez**\n\nChief Executive Officer Acerinox\n\nIt is an honor to speak to you all today to lay out the strategic importance of sustainable development - one of the essential pillars that serves as a backbone for our work and our strategy's principles. We efficiently manufacture high-performance stainless steels and alloys in a respectful, committed way. We are committed to a responsible management model that helps protect the planet, reduce inequality, and promote a more prosperous, sustainable world.\n\nWe're well aware that the worldwide nature of our business exposes us to new risks and geopolitical tensions. Russia's invasion of Ukraine, conflict in the Middle East, and the growing tension between China and Taiwan threaten to block the way of economic development and further strain supply chains. By the end of 2023, events in the Red Sea - with constant attacks on cargo ships - disrupted maritime trade and diverted Suez Canal cargo flows to longer, more costly alternative routes. Our Group undoubtedly faces numerous challenges and complex risks in an increasingly changing, unstable world.\n\nIn this complex, adverse context, we have been able to maintain our commitment to operational excellence and sustainable efficiency, standing out as a leader and driver in circular economy, once again demonstrating our ability to adapt to changing circumstances.\n\nAs a global supplier of stainless steel and high-performance alloys, we are committed to best practices in governance and sustainability in order to contribute to economic and social development. We are firmly committed to helping achieve the Sustainable Development Goals (SDGs) approved by the United Nations, with recycled materials, manufacturing products that are wholly and indefinitely recyclable while also promoting innovation, education, equality policies, and climate change mitigation. To this end, we have a responsible management model that structures, coordinates, and strengthens our goals while ensuring the sustainability of the business.\n\nOur sustainability plan, 360º Positive Impact, is based on a materiality and ESG risk analysis; it identifies levers for value generation and establishes long-term targets alongside the Group's main environmental, social, and corporate governance initiatives. This multi-year program is structured around five strategic pillars: ethical, responsible, and transparent governance; eco-efficiency and climate change mitigation; circular economy and sustainable products; a committed team, culture, diversity, and safety; and lastly supply chain and societal impact.\n\nThe Group has also established a set of targets for 2030 which include ambitious goals such as a 20% reduction in direct and indirect carbon emissions intensity (Scope 1 and 2) using the 2015 baseline. We have managed to reduce them by 11% already. Responsible energy consumption is another essential characteristic of our company's work. In this regard, the stainless steel division has committed to reducing its energy intensity by 7.5% compared to 2015. However, we weren't able to improve in this area this year; it was affected by the drop in production, which had a significant impact on factory efficiency.\n\nThe 20% reduction target for water intake intensity is also progressing steadily (18% versus 2015). Another of our Group's essential goals is to recycle 90% of our waste. Stainless steel is a sustainable material by definition; thanks to our ongoing investments and efforts, our waste reuse figure has now reached 80%. All these carbon intensity, energy intensity, water withdrawal, and percentage of waste recycled targets were set for the stainless steel division only. However, in 2024, this will be extended to the entire Group.\n\nI would also like to lay out the progress we have made on our other priorities and best practices, such as our commitment to avoid any kind of accidents, far exceeding the 2023 target, as detailed in the report and thanks to everyone's hard work. The Group has a presence in all five continents, where most races and religions are represented. As part of our growing commitment to diversity, we also set ourselves the target of increasing the percentage of women in the workforce to 15% (currently 13.3%, well above the 9.1% of the Spanish steel industry).\n\n{127}------------------------------------------------\n\nImage /page/127/Picture/1 description: The image shows the logo for Acerinox. The logo consists of a blue circle with the word \"ACERINOX\" written in blue inside the circle. The circle is not complete, with the right side of the circle being open.\n\n## **A leader in circular economy**\n\nTo achieve all these targets and manufacture increasingly sustainable products and solutions, we believe that the R&D&I strategy must go hand-in-hand with environmental challenges. For this reason, we're committed to managing our production processes in an eco-efficient way, from the source to the end of the product's life cycle. In addition to legal obligations, Acerinox factories also have procedures in place to control environmental risks, as well as their corresponding likelihood and severity evaluations. All Group facilities also have an environmental management system in accordance with the ISO 14001 standard.\n\nIn short, our ESG model is a future international benchmark. This year, our commitment to sustainability has once again earned us top-level international recognition that validates and supports our aim: to create the most efficient materials for the future, generating a positive environmental impact. For the second consecutive year, Acerinox was awarded the Platinum Medal by EcoVadis in 2023, the highest rating in corporate sustainability. This rating evaluates corporate social responsibility in global supply chains.\n\nThis year, Acerinox obtained an overall score of 82 points; placing us in the 99th percentile, at the top of the sector, as well as exceeding the score received last year (79 points). The assessment includes 21 sustainability criteria divided into four key areas: environment, labor and human rights, ethics and sustainable procurement.\n\nIn 2023, we also joined the Together for SDGs initiative, flying the colors of the United Nations Sustainable Development Goals (SDGs). Looking ahead to 2024, we've identified projects in key business areas to improve quality and performance in the production of high-value-added steels, optimize internal scrap and raw material management, and introduce further sustainability improvements to make consumable use more efficient and further reduce CO2 emissions.\n\nWe are proud that this strong commitment, which underpins our circular-economy-based business model, is supported by the ongoing efforts of the thousands of people who make up our Group. Sustainability is our driving force, which in turn brings together and unites the other pillars. We are looking for a model based on value generation for our stakeholders, carrying forward the legacy for future generations. You can find a full accounting of all our progress and contributions to sustainability in the various chapters of this report, which I now invite you to read.\n\nImage /page/127/Picture/8 description: The image shows a close-up of a metal turbine rotor. The rotor is silver and has many curved blades. The background is blurred and blue.\n\n{128}------------------------------------------------\n\n## **1. Business model**\n\n**Business model and value creation**\n\n**13 Factories** \n\n**20**\n\n**Service centers**\n\n**26 Warehouses**\n\n**57**\n\n**Sales offices** \n\n## **22**\n\n**Commercial agents**\n\n## **61**\n\n**Countries in which the sales network operates**\n\n## **Global presence**\n\n**5** Continents Sales in **79** countries\n\n**8,229** employees\n\n## **Customers**\n\n**11,864**\n\nAcerinox's factories have **more than 120** quality certifications\n\nImage /page/128/Picture/19 description: The image shows a close-up of a building's facade with a unique architectural design. The facade is covered in a pattern of triangular, cone-shaped structures that are arranged in rows and columns. These structures appear to be made of a light-colored material, possibly metal or concrete, and they create a textured, geometric surface. The background reveals a blue sky, suggesting that the building is located outdoors. The overall impression is one of modern, innovative architecture with a focus on geometric patterns and visual texture.\n\n**4**\n\n{129}------------------------------------------------\n\nImage /page/129/Picture/1 description: The image shows a logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The text is positioned to the left of a blue circle. The circle partially obscures the left side of the text, creating a sense of depth. The overall design is simple and corporate.\n\n## **Board of directors**\n\nImage /page/129/Figure/3 description: The image contains two donut charts. The first donut chart shows the distribution of categories: Independent (63.6%), Proprietary (27.3%), and Executive (9.1%). The second donut chart shows the percentage of women (36.4%).\n\n**63.6%**\n\nIndependent directors\n\n**34**\n\nboard committee meetings\n\n**14** \n\nmeetings held by the board of directors\n\nEconomic performance\n\n**6,608 EUR million** revenue\n\n**228 EUR million** net income\n\n**703 EUR million** EBITDA\n\n**341 EUR million**  net financial debt\n\n**481 EUR million**  operating cash flow Our shares\n\n**249,335,371 shares**\n\n**150 EUR million**  dividend\n\n**2,657**\n\n**EUR million**  Market capitalization\n\n## **EUR 10.66/share**\n\nshare price at year-end\n\n**EUR 62,333,842.75**\n\nshare capital\n\n{130}------------------------------------------------\n\n## **Production volume**\n\n**1,869,417**  metric tons of stainless steel\n\n**76,288**  metric tons of high-performance alloys\n\n## **More than 18,000 combinations**\n\nThe widest range of products and solutions\n\n## **Products for all areas**\n\n- Transport\n- Industrial and engineering equipment\n- ABC and infrastructure\n- Food sector\n- Electrical appliances and hardware\n- Energy and environmental technology\n- Aeroespace\n\n## **Purchases from suppliers**\n\n**4,967 EUR million**\n\n## **79% of suppliers are local**\n\n(from the same country as the production center) We promote the development of local communities in which the Group operates\n\n## **Digitalization and innovation**\n\n## **EUR 17.6 million**\n\n**digitalization and innovation investments and expenses**\n\n### **Main R&D&i lines**\n\n- Research to improve quality\n- Technological development\n- Development of new types of steel and finishes\n- Investments to optimize the circular economy\n- Production line improvements\n- Digitalization, automation and control of the production process\n- Investment in climate change mitigation\n\n### **'Excellence 360º' strategic plan Comprehensive view of the business**\n\n- **Raw material purchases:** optimize the mix. Predictability of consumption, raw materials and consumables.\n- **Production:** increase reliability and competitiveness.\n- **Supply chain:** optimize inventories and delivery processes.\n- **Sales:** focused on providing added value and improving margins. Demand planning.\n\n{131}------------------------------------------------\n\nImage /page/131/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in white text inside a blue circle. The circle is not fully closed, with a gap at the top right.\n\n## **Commitment to sustainability**\n\n#### **Contribution of sustainability to the business strategy**\n\nThe Sustainability Plan, Positive Impact 360º, responds to one of the main areas of Acerinox's strategy, which identifies sustainability as one of its fundamental lines of action and includes five pillars.\n\nImage /page/131/Figure/5 description: The image shows five categories with titles and icons. The first category is \"Ethical, accountable, and transparent governance\" and has an icon of an open book. The second category is \"Eco-efficiency and climate change mitigation\" and has an icon of a tree and a winding road. The third category is \"Circular economy and sustainable products\" and has an icon of a globe. The fourth category is \"Committed team, culture, diversity, and safety\" and has an icon of a group of people. The fifth category is \"Supply chain and community impact\" and has an icon of a factory.\n\n**Positive Impact 360º** responds to the ESG risk and materiality analysis carried out based on the Group's strategy. It identifies the levers of value generation and establishes long-term objectives to make these levers a reality. Acerinox has established **six sustainability objectives** with a view to 2030 associated with the pillars of the Positive Impact 360º Plan.\n\n| Pillar        | 2030 targets**                                                                 | Degree of progress | 2023 vs 2022 |\n|---------------|--------------------------------------------------------------------------------|--------------------|--------------|\n| Image: Tree   | 20% reduction in CO2 emissions intensity<br>(Scopes 1 and 2) compared to 2015. | -11% vs 2015       | -3%          |\n| Image: Tree   | 7.5% reduction in energy intensity<br>compared to 2015                         | 8% vs 2015         | 6%           |\n| Image: Tree   | 20% reduction in water withdrawal<br>intensity compared to 2015                | -18% vs 2015       | -3%          |\n| Image: Globe  | 90% waste recycled                                                             | 80%                | 1%           |\n| Image: People | 10% annual reduction in LTIFR                                                  | –                  | -24%         |\n| Image: People | 15% women at the organization                                                  | 13.28%             | 0.37%*       |\n\n\\*Increase in the percentage of women on staff compared to the previous year.\n\n\\*\\*Carbon intensity, energy intensity, water withdrawal intensity and % waste recycled targets were set for the stainless steel division only. In 2024, they will be extended to the Group level.\n\nThe Group seeks to reduce, reuse, and recycle as many of the resources used as possible to establish a more sustainable production model.\n\n{132}------------------------------------------------\n\nImage /page/132/Picture/1 description: The image shows a logo with the word \"ACERINOX\" in a bold, sans-serif font. The text is positioned to the left of a blue, circular graphic. The graphic appears to be a stylized representation of a globe or a similar spherical shape, with curved lines suggesting depth and dimension. The overall design is clean and corporate, likely representing a company or organization named Acerinox.\n\n### **Committed to the United Nations 2030 Agenda**\n\nThe Group identified the Sustainable Development Goals to which it can make the biggest contribution.\n\nImage /page/132/Picture/4 description: The image shows a collection of logos representing the United Nations Sustainable Development Goals (SDGs). From left to right, top row: SDG 3 (Good Health and Well-being) with a heart rate graphic, SDG 5 (Gender Equality) with a gender symbol, SDG 6 (Clean Water and Sanitation) with a water droplet graphic, and SDG 8 (Decent Work and Economic Growth) with an upward trending graph. Bottom row: SDG 9 (Industry, Innovation and Infrastructure) with a cube structure, SDG 12 (Responsible Consumption and Production) with an infinity symbol, and SDG 13 (Climate Action) with an eye graphic containing a world map.\n\n### **Recognitions**\n\nAcerinox received, for the second consecutive year, the EcoVadis Platinum Medal for its performance in sustainability and two gold awards, one in sustainability and one in safety, at the Annual Stainless Steel Industry Awards.\n\nImage /page/132/Picture/7 description: The image shows the EcoVadis Platinum 2023 sustainability rating logo next to the word \"worldstainless\". The EcoVadis logo is a circular badge with the words \"PLATINUM\" and \"Top 1%\" on a banner at the top. The words \"2023\" and \"ecovadis\" are in the center of the badge, and the words \"Sustainability Rating\" are at the bottom. The word \"worldstainless\" is in blue and is reflected below.\n\nImage /page/132/Picture/8 description: The image shows a low-angle view of a bridge tower and its support cables against a clear blue sky. The tower is a tall, rectangular structure with a dark gray or black color, and it appears to be made of concrete or stone. The cables are arranged in a fan-like pattern, extending from the top of the tower down to the bridge deck. The cables are thin and metallic, and they appear to be made of steel or iron. The sky is a clear blue color, with no clouds or other obstructions. The image is well-lit and the colors are vibrant.\n\n{133}------------------------------------------------\n\n## **1.1 Value creation**\n\nImage /page/133/Figure/3 description: The image is an infographic that illustrates the financial impact and operations of a company within a community. It features various statistics and figures related to the company's activities. The infographic includes the following data points: 1.9 million tons of stainless steel, 76 thousand tons of high-performance alloys steel, EUR 637 million in salaries for 8,229 employees, EUR 540 thousand in social action, EUR 17.6 million in R+D+i, 11,864 customers to whom the company sells, EUR 175 million in investment in fixed assets, EUR 150 million in dividends, EUR 233 million in taxes, EUR 6,608 million in customer sales, and EUR 4,967 million of spending in suppliers, with 79% being local suppliers. The infographic uses a stylized map layout with illustrations of buildings, roads, and natural elements to represent the company's presence and impact on the community.\n\n{134}------------------------------------------------\n\nImage /page/134/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, with the letters stacked vertically. The word is surrounded by a blue circle that is open on the right side.\n\n## **1.2 About the Group**\n\n#### **GRI 2-1 / 2-2**\n\nThe Acerinox Group is the world's most global manufacturer and distributor of stainless steel and high-performance alloys; present on all five continents, it is a market leader in the US and Africa, as well as one of the industry's bestpositioned companies in Europe. The Group has an international sales network made up of 20 service centers, 26 warehouses, 57 offices and 22 sales representatives, thanks to which Acerinox distributes in 79 countries.\n\nAcerinox's stainless steel factories are located in Campo de Gibraltar, Ponferrada and Igualada (Spain), Ghent (Kentucky, US), Middelburg (Mpumalanga, South Africa) and Johor Bahru (Malaysia). The Group also has high-performance alloys plants, which are located in Unna, Duisburg, Siegen, Werdohl and Altena (Germany), and in New Jersey and Nevada (US).\n\nAcerinox's mission, vision and values guide the entire company towards its purpose: creating the most efficient materials for the future, maximizing societal benefit and creating value for its stakeholders. In its wide range of solutions, Acerinox Group, a leader in circular economy, offers more than 18,000 possible combinations. These are used in industries such as transportation, construction, energy and environmental technology, and food service, thanks to their corrosion resistance, durability, versatility, mechanical properties, aesthetic beauty, and low maintenance requirements.\n\n## At December 31, 2023, **the majority shareholder of Acerinox was Corporación Financiera Alba (19%)**\n\n| 20 | 26 | 57 | 22 | 61 |\n|----|----|----|----|----|\n|----|----|----|----|----|\n\n**Service centers**\n\n**Warehouses Sales offices Commercial** \n\n**agents**\n\n**Countries in which the sales network operates**\n\nImage /page/134/Picture/13 description: The image shows a close-up of a modern building's facade, featuring a pattern of angled glass panels and white vertical supports. The glass reflects the sky, creating a blue tint throughout the image. The composition is dynamic, with the angled lines converging towards the top of the frame. The lighting is bright and even, highlighting the clean lines and geometric shapes of the architecture.\n\n{135}------------------------------------------------\n\n## **Key indicators**\n\n### **Performance in figures**\n\nImage /page/135/Figure/3 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 2,619. The value for 2022 is 2,190. The value for 2023 is 1,946.\n\nImage /page/135/Figure/5 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 6,706. The value for 2022 is 8,688. The value for 2023 is 6,608.\n\nImage /page/135/Figure/6 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 989, the value for 2022 is 1,276, and the value for 2023 is 703.\n\nImage /page/135/Figure/7 description: The image is a bar chart showing the EBIT (TTC) for the years 2021, 2022, and 2023. The EBIT for 2021 is 810, for 2022 is 876, and for 2023 is 374.\n\nImage /page/135/Picture/8 description: The image shows a low-angle view of three modern skyscrapers against a clear, light blue sky. The buildings are primarily constructed of glass and steel, reflecting the sky and surrounding environment. The skyscraper on the left has a blue tint, while the other two have a more neutral, reflective appearance. The architecture is characterized by clean lines and a grid-like pattern of windows. The composition emphasizes the height and scale of the buildings, creating a sense of urban grandeur.\n\nEBITDA (M€)\n\n{136}------------------------------------------------\n\nImage /page/136/Figure/1 description: The image is a bar chart showing the profit before tax (FTE) for the years 2021, 2022, and 2023. The profit for 2021 is 766, for 2022 is 831, and for 2023 is 355.\n\nImage /page/136/Figure/3 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 572, for 2022 is 556, and for 2023 is 228.\n\nImage /page/136/Figure/5 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 179, the value for 2022 is 193, and the value for 2023 is 171.\n\nImage /page/136/Figure/7 description: The image is a bar graph showing data for the years 2021, 2022, and 2023. The bar for 2021 has a value of 101, the bar for 2022 has a value of 154, and the bar for 2023 has a value of 175.\n\nImage /page/136/Figure/8 description: The image shows the text \"ROE (%)\" in a purple sans-serif font. \"ROE\" is in a larger font size than \"(%) which is directly to the right of \"ROE\".\n\nImage /page/136/Figure/9 description: The image is a bar graph showing the percentages for the years 2021, 2022, and 2023. The percentage for 2021 is 25.8%, for 2022 is 21.8%, and for 2023 is 9.3%.\n\nImage /page/136/Figure/10 description: The image shows the text \"ROCE (%)\" in a purple sans-serif font. \n\nImage /page/136/Figure/11 description: The image is a bar graph showing data for the years 2021, 2022, and 2023. The value for 2021 is 29.0%, for 2022 is 29.3%, and for 2023 is 13.3%.\n\nImage /page/136/Figure/13 description: The image is a bar graph comparing values for the years 2021, 2022, and 2023. The value for 2021 is 8.19, the value for 2022 is 9.81, and the value for 2023 is 9.88.\n\nImage /page/136/Figure/14 description: The image shows the text \"Shareholder remuneration per share (€)\".\n\nImage /page/136/Figure/15 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 0.50, the value for 2022 is 1.28, and the value for 2023 is 0.60. There is an asterisk next to the 2022 value.\n\n\\*Includes the ordinary dividend of EUR 0.50/share and the indirect remuneration derived from the share buyback program\n\n{137}------------------------------------------------\n\nImage /page/137/Picture/0 description: The image shows a modern architectural design with a curved structure against a clear blue sky. The structure appears to be part of a building, possibly a skyscraper, with a unique design featuring layers of curved glass and metal. The glass reflects the sky, creating a sense of openness and light. The overall impression is one of contemporary design and innovative construction.\n\nImage /page/137/Figure/3 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 2.11, the value for 2022 is 2.14, and the value for 2023 is 0.91.\n\n\\*Calculated based on the number of outstanding shares at yearend\n\nNet financial debt (M€)\n\nImage /page/137/Figure/6 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 578, the value for 2022 is 440, and the value for 2023 is 341.\n\nImage /page/137/Figure/8 description: The image is a bar chart comparing values for the years 2021, 2022, and 2023. The value for 2021 is 11.385, the value for 2022 is 9.240, and the value for 2023 is 10.665.\n\nImage /page/137/Figure/10 description: The image is a bar graph showing values for the years 2021, 2022, and 2023. The value for 2021 is 0.58, the value for 2022 is 0.35, and the value for 2023 is 0.49.\n\n{138}------------------------------------------------\n\n## **1.3 Parent**\n\n## Acerinox S.A.\n\nAcerinox S.A. is the Group's holding company, which establishes and monitors the strategic lines of business. It also provides corporate services such as legal, accounting and consulting, and is responsible for the management and administration of Group financing.\n\nThe head office, with 114 employees, is located in Madrid, and is where the main decision-making and management bodies convene.\n\nAcerinox's shares are listed on the continuous market and the company is part of the selective Spanish IBEX 35. Approximately 45,000 shareholders, including individuals and legal entities, own stock in the company.\n\nAt December 31, 2023, Acerinox's share capital consisted of 249,335,371 ordinary shares with a nominal value of EUR 0.25 each.\n\n**STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\n## **1.4 Production companies**\n\n## **\\_1970**\n\n## Acerinox Europa\n\nCampo de Gibraltar (Spain)\n\n1,746 employees.\n\nFully integrated flat product factory. Its melting shop production totaled **550,162**  metric tons.\n\nMore information at: https://www.acerinox.com/es/grupo-acerinox/fabricas/acerinoxeuropa/inicio-acerinox-europa/\n\n## **\\_1990**\n\n## North American Stainless\n\nKentucky (US).\n\n1,606 employees.\n\nFully integrated flat- and long-product factory. Its melting shop production totaled **841,821** metric tons.\n\nMore information at: https://www.northamericanstainless.com/\n\n## **\\_2002**\n\n## Columbus Stainless\n\nMiddelburg (South Africa).\n\n1,248 employees.\n\nFully integrated flat product factory.\n\nIts melting shop production totaled **477,434** metric tons.\n\nMore information at: https://www.columbus.co.za/\n\nImage /page/138/Picture/27 description: The image shows a worm's eye view of several skyscrapers against a blue sky with white clouds. The buildings are made of glass and steel, and they reflect the sky and clouds. The buildings are of different heights and shapes, and they are arranged in a way that creates a sense of depth and perspective.\n\nACERINOX\n\n{139}------------------------------------------------\n\n## **\\_2009**\n\n## Bahru Stainless\n\nJohor Bahru (Malaysia).\n\n427 employees.\n\nBahru has cold rolling lines, which processed **77,181** metric tons. More information at: https://bahrustainless.com/en/\n\n## 1957\n\n## Roldán S.A\n\n#### **STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\n**STAINLESS STEEL**\n\nPonferrada (Spain).\n\n361 employees\n\n**44,479** metric tons of hot-rolled products.\n\nIts product portfolio includes bars, wire rods, angles, hexagonal bars and reinforcement bars, all of them flat products.\n\nMore information at: https://www.acerinox.com/es/grupoacerinox/fabricas/roldan/inicio-roldan/\n\n## \\_1989\n\n## Inoxfil S.A\n\nIgualada (Spain).\n\n96 employees.\n\n**5,502** metric tons produced.\n\nManufactures stainless steel wire.\n\nMore information at: https://www.acerinox.com/es/grupoacerinox/fabricas/inoxfil/inicio-inoxfil/index.html\n\n## **\\_2020**\n\n#### **HIGH-PERFORMANCE ALLOYS**\n\nVDM Metals\n\nUnna, Duisburg, Siegen, Altena & Werdohl (Germany).\n\nNew Jersey & Nevada (US).\n\n2,047 employees.\n\n**76,288** metric tons produced.\n\nGlobal leader in the production of nickel alloys and high-performance alloys, with five factories located in Germany and two in the US.\n\nMore information on VDM Metals at: https://www.vdm-metals.com/\n\n## **Eco-efficient products**\n\nOur products contribute to:\n\n- Circular economy. Circular economy.\n- Offering durable materials.reduce emissions. Offering durable materials.\n\t- 100% recyclable alternatives.\n\t- Systems to reduce emissions.\n\t- Improving quality of life with a lower environmental impact.\n\nImage /page/139/Picture/37 description: The image shows a steel frame structure under a blue sky with some clouds. The steel beams are arranged in a grid pattern, with vertical supports holding them up. The structure appears to be in the process of being built.\n\n{140}------------------------------------------------\n\nImage /page/140/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters. The letters are partially obscured by a blue circle that surrounds the text. The circle is thicker at the top and thinner at the bottom.\n\n## **1.5 Sales subsidiaries**\n\n• Improving quality of life with a lower environmental impact.\n\nImage /page/140/Figure/3 description: The image shows a bar chart and a world map. The bar chart shows the number of factories, service centers, warehouses, sales offices, and agents for the stainless steel division and high-performance alloys division. The stainless steel division has 6 factories, 17 service centers, 26 warehouses, 43 sales offices, and 9 agents. The high-performance alloys division has 7 factories, 3 service centers, 0 warehouses, 14 sales offices, and 13 agents. The world map shows the countries in which the Acerinox Group is present. The countries are colored in purple.\n\n{141}------------------------------------------------\n\n## **1.6 Relevant events**\n\n## **A. Acerinox, a future of excellence with a renewed focus on added value**\n\nAcerinox's mission is to become a global supplier that addresses present and future needs by offering the widest selection of solutions.\n\nTo achieve this, the Group has designed a strategic plan based on four pillars. At its core, we have the production of higher-value-added solutions, orienting the sales mix towards special stainless steels and high-performance alloys. Alongside this pillar, excellence stands out; the Group offers the highest quality standards and maintains a spirit of perpetual improvement in both products and processes.\n\nBoth pillars are based on financial strength, guaranteeing stability and profitability for the various stakeholders. Finally, the three pillars described above are supported and built on the Company's firm commitment to be a leader in sustainability and circular economy.\n\nAs part of this strategy, which is aimed at developing and expanding higher-value-added solutions, Acerinox strengthened its commitment to VDM Metals in 2023 with a new EUR 67 million investment in the Group's world-leading high-performance alloys division, acquired in 2020.\n\nThis renewed focus on higher-value-added and faster-return products will increase production by 15% and boost efficiency with additional sales of more than 6,000 metric tons per year from 2026.\n\nVDM Metals is a lever for the Group's transformation as a supplier of a wide variety of materials, modifying the sales mix with new high-value-added products. Thus, Acerinox will further leverage the competitive advantage conferred by the 'stainless steel-highperformance alloys platform' to expand its portfolio and offer differential end-to-end solutions, from commodities to special alloys.\n\nIn parallel to these new investments, the Group continues to drive forward operational excellence through Beyond Excellence, an ambitious new program that will kick off between 2024 and 2026. Its main goal is to enhance comprehensive competitiveness through continuous improvement ideas that will be implemented across all Acerinox factories through digital transformation, cross-functional collaboration and a commitment to innovation.\n\nBoth projects are part of Acerinox's Strategic Plan 2021-2025 and will strengthen two pillars: added value, thanks to new investments in VDM Metals, and excellence, through the Beyond Excellence program. Their impact on the Group's other two main pillars sustainability and financial strength - will also be direct.\n\n## **B. Beyond Excellence:** a new plan to drive forward comprehensive competitiveness\n\nThe Beyond Excellence Plan is based on six pillars (decarbonization, efficiency, sales excellence, productivity and automation, quality and customer service, and purchasing), with specific objectives for each one.\n\nThe program is being launched to improve Acerinox's operational excellence and competitiveness. It will save EUR 100 million from 2024 to 2026 by combining costs/savings and revenue improvements while fostering a culture of continuous improvement and innovation across the organization.\n\nImage /page/141/Picture/14 description: The image shows a close-up of a building's exterior with a repeating pattern of rectangular shapes. The shapes are arranged in a staggered fashion, creating a three-dimensional effect. The shapes are made of a light-colored material, possibly metal or concrete, and have a smooth surface. The lighting is soft and diffused, creating subtle shadows that accentuate the shapes. The overall effect is modern and architectural.\n\n{142}------------------------------------------------\n\nImage /page/142/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside a dark blue circle that is open at the top, creating a crescent shape around the text. The background is white.\n\n## **C. New investment in NAS bolsters its leadership:** wider range, higher output\n\nNorth American Stainless (NAS), the Acerinox Group's main integrated stainless steel factory in the US, is strengthening its leading position in the American market with a new investment (its thirteenth since 1990) totaling US\\$244 million. This will increase its production capacity by 20% to 200,000 metric tons.\n\nThe new equipment will increase the volume of flat products, with a special focus on higher-value-added products such as Bright Annealing (BA) and steels with special compositions to keep up with expected growth in this area.\n\nNAS, one of the most efficient and advanced factories in the world, leads the industry in the US. It produces nearly 50% of the nation's stainless steel, supporting American supply security while creating quality jobs. The plant will have, among other equipment, a new cold rolling mill and modernized annealing and pickling lines.\n\nThese investments will create 70 new jobs in addition to the factory's 1,600 employees and 500 local service providers.\n\n## **D. Consolidated leadership in sustainability:** second EcoVadis Platinum Medal\n\n#### This highest-level rating places the Group among the top 1% of companies in the sector worldwide\n\nFor the second consecutive year, Acerinox has been awarded the Platinum Medal by EcoVadis, the highest global rating in corporate sustainability. This rating evaluates corporate social responsibility in global supply chains.\n\nThe Company has passed the qualification process, demonstrating its solid management system. The assessment includes 21 sustainability criteria divided into four main areas: environment, labor and human rights, ethics and sustainable procurement.\n\nThis year, Acerinox obtained an overall score of 82 points; this placed it in the 99th percentile, at the top of the sector, as well as exceeding the score it received last year (79 points).\n\nThis distinction validates and demonstrates the Group's commitment to sustainability, supporting Acerinox's goal of creating the most efficient materials for the future, minimizing environmental impacts and maximizing benefits to society.\n\nImage /page/142/Picture/13 description: The image shows a low-angle view of several tall buildings in a city. The buildings are made of glass and steel, and they reflect the sky and clouds. The sky is cloudy and overcast. The buildings are of varying heights and designs, with some being taller and more modern than others. The overall impression is one of urban density and architectural diversity.\n\n{143}------------------------------------------------\n\n## **2. Strategy**\n\n## **2.1 Global context**\n\nThe year 2023 was again marked by geopolitical tensions and supply chain problems. The Russia-Ukraine conflict was joined by the Gaza-Israel conflict and, at the end of the fiscal year, incidents in the Red Sea disrupted trade routes, diverting Suez Canal cargo flows to longer, more costly alternative routes.\n\n#### **The stainless steel sector**\n\nThe stainless steel division had a year of low activity following the inventory adjustment phase launched in the second half of 2022.\n\nIn this regard, there were significant adjustments in all producing countries except China and Indonesia, where generated surpluses resulted in greater market price pressure.\n\nThe latest available data point to a normalization of inventories in all markets, so a recovery in apparent consumption can be expected during 2024. However, the year will continue to be marked by geopolitical uncertainty and the constant threat of overcapacity in Asia.\n\n#### **Europe**\n\nAs a result of the inventory readjustment, apparent consumption in Europe fell by around 20%.\n\nThe main correction, with decreases of more than 50%, occurred in imports, most of which were destined for the distribution market. Demand from end users remained more stable.\n\nLow prices, together with the safeguards and trade protection measures in place, as well as the positive impact of the launch of new anti-circumvention investigations regarding material of Indonesian origin re-rolled in Taiwan, Vietnam and Turkey, caused a notable reduction in imports from these origins.\n\nImage /page/143/Figure/13 description: This image shows a line graph comparing \"Alloy EUR/t\" and \"Base EUR/t\" from January 2022 to October 2023. The y-axis ranges from -2000 to 6000. In January 2022, \"Alloy EUR/t\" is around 4500, and \"Base EUR/t\" is around 2000. \"Alloy EUR/t\" peaks around April 2022 at approximately 5500-6000, then generally declines to around 2500-3000 by October 2023. \"Base EUR/t\" decreases from January 2022 to July 2023, reaching a low of around -100, then increases to around 500-750 by October 2023.\n\n### **United States**\n\nAs in Europe, apparent consumption in the US declined by around 20% compared with the previous year due to the aforementioned inventory adjustment, affecting imports more sharply. The market, on the other hand, maintained a more stable activity level in terms of end users.\n\nImage /page/143/Figure/16 description: This image shows a line graph comparing the prices of Alloy EUR/t and Base EUR/t in the United States (dollars/ton) from January 2022 to October 2023. The y-axis ranges from 0 to 7500. The x-axis shows the months from January 2022 to October 2023. The price of Base EUR/t is relatively stable at around 2000-2500 dollars/ton. The price of Alloy EUR/t starts at around 4500 dollars/ton in January 2022, peaks at around 6500 dollars/ton in April 2022, and then gradually decreases to around 4000 dollars/ton in October 2023.\n\nImage /page/143/Picture/17 description: The image shows a low-angle view of several modern buildings against a blue sky with some clouds. The buildings are primarily constructed with glass and metal, reflecting the sky and clouds. The composition emphasizes the height and angularity of the structures, creating a dynamic perspective.\n\n{144}------------------------------------------------\n\nImage /page/144/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue crescent shape surrounding the word. The crescent shape is open at the bottom.\n\n#### **Asia**\n\nThe Asian market continued to suffer from aggressive pricing and production policies by major Chinese and Indonesian competitors; given the drop in demand from China, this diverted a significant portion of exports to Russia and the Middle East.\n\nImage /page/144/Figure/4 description: The image is a line graph titled \"Price evolution by region (dollars/ton)\". The x-axis represents time, with labels for January, April, July, and October of 2022 and 2023. The y-axis represents price, with a value of 5000. There are three lines on the graph, representing Europe, United States, and Asia. The Europe line starts at approximately 5100 in January 2022, peaks at approximately 5400 in April 2022, and then decreases to approximately 4300 in October 2023. The United States line starts at approximately 5000 in January 2022, peaks at approximately 5300 in April 2022, and then decreases to approximately 4600 in October 2023. The Asia line starts at approximately 4300 in January 2022, peaks at approximately 4500 in April 2022, and then decreases to approximately 3800 in October 2023.\n\nImage /page/144/Picture/5 description: A wooden boardwalk with a metal chain railing runs alongside a body of water. The boardwalk is made of planks of wood that run horizontally across the frame. The metal chain railing is made of metal posts with metal chains strung between them. The body of water is blue and has small waves. The sky is not visible in the image.\n\n#### **The high-performance-alloys sector**\n\nThe high-performance alloys market behaved positively in 2023, though with significant differences from sector to sector. The oil and gas (O&G) and chemical process industry (CPI) markets in particular remained up.\n\nIn the O&G market, bar demand exceeded expectations. During the second half of 2023, the confirmation of many pipeline projects generated a strong increase in demand, especially during the last four months of the year.\n\nChemical process industry, for its part, also saw strong demand throughout the year and was propelled by high demand for electrolyzer applications.\n\nAs expected, the automotive market experienced a slight decline while the aerospace market continued to improve, especially in long product.\n\nThe electronics sector was much weaker than in previous years, with recovery expected in the second half of 2024.\n\nAcerinox's powder production business for additive manufacturing experienced its best year yet in 2023, and the forecast points to further growth in this product niche.\n\n### **GDP growth (IMF - World Economic Outlook)**\n\n|              | 2022 | 2023 | 2024 |\n|--------------|------|------|------|\n| China        | 3.0  | 5    | 4.6  |\n| Germany      | 1.8  | -0.3 | 0.5  |\n| India        | 7.2  | 6.7  | 6.5  |\n| South Africa | 1.9  | 0.6  | 1.0  |\n| Spain        | 5.8  | 2.4  | 1.5  |\n| USA          | 1.9  | 3    | 2.1  |\n| ASEAN-5      | 5.5  | 4.2  | 4.7  |\n| Eurozone     | 3.4  | 0.5  | 0.9  |\n| World        | 4    | 3.1  | 3.1  |\n\n{145}------------------------------------------------\n\nImage /page/145/Picture/1 description: The image shows a logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The letters are dark blue. The logo is partially obscured by a large, dark blue circle that surrounds the text. The circle is thick and appears to be a solid color.\n\n## 2.1.1 Global production\n\n#### **\\_Global stainless steel production 1950 - 2023**\n\nImage /page/145/Figure/4 description: The image is a line graph that shows production in Tn on the y-axis and year on the x-axis. The graph shows a steady increase in production from 1950 to 2020. The production was around 2 Tn in 1950 and increased to around 55 Tn in 2020.\n\nImage /page/145/Picture/5 description: The image shows a steel frame structure under construction against a light blue sky. The structure consists of vertical steel beams supporting horizontal beams and trusses. The trusses are made of a network of diagonal steel members. The steel is dark in color, and the sky is visible through the open framework of the structure.\n\n#### **\\_Global stainless steel production (millions of metric tons)**\n\nImage /page/145/Figure/7 description: The image shows two donut charts, one for 2022 and one for 2023. The 2022 donut chart shows the following percentages: Europe 6.3%, United States 4%, China 32%, India 2.7%, Japan 8.3%, and Other 2.0%. The 2023 donut chart shows the following percentages: Europe 6.0%, United States 3.7%, China 36%, India 2.2%, Japan 7.6%, and Other 2.0%.\n\n#### **\\_Global melting shop production (thousands of metric tons)**\n\n|      | Q1     | Q2     | Q3     | Q4     | Total  |\n|------|--------|--------|--------|--------|--------|\n| 2022 | 14,536 | 14,695 | 12,768 | 13,856 | 55,855 |\n| 2023 | 13,467 | 14,410 | 14,727 | 14,281 | 56,885 |\n\n#### **\\_Global melting shop production by region / country (thousands of metric tons)**\n\n|        | 2022   | 2023   | Variation |\n|--------|--------|--------|-----------|\n| Europe | 6,294  | 6,034  | -4.1%     |\n| US     | 2,017  | 1,807  | -10.4%    |\n| China  | 32,575 | 35,603 | 9.3%      |\n| India  | 3,943  | 3,704  | -6.1%     |\n| Japan  | 2,686  | 2,158  | -19.7%    |\n| Other  | 8,340  | 7,580  | -9.1%     |\n| Total  | 55,855 | 56,886 | 1.8%      |\n\n{146}------------------------------------------------\n\nImage /page/146/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in black, set against a blue circle. The text is positioned on the left side of the circle, with the letters partially obscured by the circle's edge. The circle is a solid blue color.\n\n## 2.1.2 Raw materials\n\n#### **Nickel**\n\n#### **\\_Official price on the LME 2022 – 2023**\n\nAverage spot price / three months in US\\$/t.\n\nImage /page/146/Figure/6 description: This line graph shows values between \"4-Jan-22\" and \"5-Sept-23\". The y axis ranges from 10,000.00 to 50,000.00. The line starts at approximately 23,000.00 at \"4-Jan-22\", rises sharply to approximately 44,000.00, then drops to approximately 31,000.00, then fluctuates between approximately 20,000.00 and 32,000.00 until \"4-Jan-23\", then fluctuates between approximately 22,000.00 and 32,000.00 until \"5-May-23\", then decreases to approximately 18,000.00 at \"5-Sept-23\".\n\nThe downward trend in nickel prices continued throughout the period, starting 2023 above US\\$31,000 and closing at around US\\$16,500.\n\nOne of the main reasons for this sharp drop was the increased availability of all nickel sources. The surplus also extended to pure nickel due to weak demand, higher supply and new production capacities in China and Indonesia.\n\nThe gradual increase in stocks on the London and Shanghai metal exchanges also contributed to maintaining this downward trend in price.\n\n#### **Ferrochrome**\n\nRobust chrome ore prices, announced ferrochrome production cuts and the price of energy in South Africa led to a price increase during the second quarter.\n\nThe second part of the year was marked by a price correction in the face of reduced global demand.\n\n#### **\\_Average quarterly ferrochrome price**\n\nImage /page/146/Figure/14 description: The image shows the text \"US¢ / Lb. Cr\".\n\nImage /page/146/Figure/15 description: The image is a line graph showing data points for eight different quarters, from Q1-2022 to Q4-2023. The y-axis ranges from 0 to 200. The data points are approximately as follows: Q1-2022 is around 185, Q2-2022 is around 215, Q3-2022 is around 185, Q4-2022 is around 155, Q1-2023 is around 155, Q2-2023 is around 180, Q3-2023 is around 160, and Q4-2023 is around 165.\n\n{147}------------------------------------------------\n\nImage /page/147/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is positioned in the lower-left quadrant of the circle.\n\n#### **Molybdenum**\n\nThe announcement of a larger-than-expected shortfall in molybdenum concentrate production maintained the upward price trend at the beginning of the year, with prices peaking above US\\$38/lb Mo in February.\n\nReadjusted demand caused a price correction, with the price reaching its lowest levels during the month of April. Slight movements in the flow of imports and exports from the Asian market set its course during the second half of the year.\n\nImage /page/147/Figure/5 description: This line graph shows a fluctuating trend over time. Starting from January 4th, the value hovers around 20 until around May 27th, where it begins to decrease, reaching a low around August 9th. From August 9th to January 3rd, there is a significant increase, peaking around 40. After January 3rd, the value sharply declines until around May 30th. From May 30th to August 8th, the value gradually increases, then decreases again until around October 18th. Finally, from October 18th to December 29th, the value shows a slight increase.\n\n#### **Ferrous scrap**\n\nAfter a first quarter characterized by the replenishment of stocks and an improved economic outlook, the rest of the year presented a very even supply/demand balance, keeping scrap prices at a high but stable level.\n\n#### **\\_Price of ferrous scrap HMS 1&2 FOB Rotterdam (monthly averages)**\n\nImage /page/147/Figure/9 description: This line graph shows the price of a commodity in US dollars per ton from January 2022 to October 2023. The y-axis ranges from 0.00 to 500.00 US\\$/t. The price starts at around 450 US\\$/t in January 2022, rises to a peak of around 580 US\\$/t in April 2022, and then falls sharply to around 320 US\\$/t in July 2022. The price then fluctuates between 300 and 350 US\\$/t until January 2023, when it begins to rise again. The price peaks at around 420 US\\$/t in April 2023, and then falls slightly to around 320 US\\$/t in July 2023. The price then rises slightly to around 350 US\\$/t in October 2023.\n\nImage /page/147/Picture/10 description: The image shows a cityscape with several tall buildings. The buildings are made of glass and steel, and they have a modern design. The sky is cloudy, and the overall tone of the image is gray. In the foreground, there is a set of stairs with metal railings. The stairs lead up to a platform that overlooks the city. The image is well-composed and visually appealing.\n\n{148}------------------------------------------------\n\nImage /page/148/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in black. A blue circle partially surrounds the word, starting from the top left and extending around to the top right. The circle is thicker at the top and tapers as it goes around the word.\n\n## **2.2 Strategic plan**\n\nImage /page/148/Figure/3 description: The image shows a stylized icon representing business strategy. It features a chess knight's head in outline, overlaid with a line graph and bar chart. The knight's head is positioned on the left, facing right. The line graph and bar chart are on the right, with the line graph showing an upward trend. The bar chart consists of several vertical bars of varying heights. The entire icon is rendered in a light purple color.\n\n#### **Acerinox continues to successfully advance in the implementation of its strategic plan 2021-2025.**\n\nThe deployment is based on the Group's vision: to become a global supplier that responds to present and future needs by offering the widest selection of materials, solutions and services. As a leader and driver in circular economy, Acerinox efficiently manufactures stainless steels and high-performance alloys with a focus on respect and committed to the environment.\n\nImage /page/148/Picture/6 description: The image shows a modern building with a curved glass facade against a blue sky with clouds. The building's design features multiple layers of curved glass panels, creating a sleek and contemporary look. The glass reflects the sky, adding depth and dimension to the image. The sky is light blue with scattered white clouds, providing a soft and airy backdrop to the building. The overall composition is clean and minimalist, emphasizing the building's architectural design and the natural beauty of the sky.\n\nThe strategic plan is based on four pillars that support short-, medium- and long-term initiatives.\n\nImage /page/148/Figure/8 description: The image shows the strategic plan for 2021-25, centered around 4 key pillars. The pillars are: Added value, Excellence, Sustainability, and Financial strength. Under \"Added value\" is the word \"PREMIUM\" and the text \"Shifting revenue mix to HPAs and value-added products\". Under \"Excellence\" is the word \"LEADER\" and the text \"Driver for the Group's competitiveness\". Under \"Sustainability\" is the word \"CORE\" and the text \"Core to our business model and a driver for value-add\". Under \"Financial strength\" is the word \"EFFICIENT\" and the text \"Accountable, transparent through-cycle capital allocation\". Below the pillars is the text \"Deliver through-cycle value creation\". There are logos for \"Sustainability\" and \"ACERINOX\" in the upper right corner.\n\n{149}------------------------------------------------\n\nImage /page/149/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle that is open at the bottom.\n\n#### **\\_Strategic pillars**\n\n#### **• Added value**\n\nIn 2023, Acerinox strengthened its market presence by standing out from the competition through the evolution of its portfolio. The development and expansion of products and solutions towards high-performance alloys in the US, Europe and South Africa was particularly significant.\n\n#### **• Excellence**\n\nThis is one of the values that directs the rest of the pillars and acts as a lever for competitiveness. The Group always offers the highest standards of excellence, balanced with cost management and with an overall positive impact on operations.\n\n#### **• Sustainability**\n\nThis is the fundamental axis underpinning the Group's business model, based on circular economy. Sustainability enables the integration and cohesion of the other pillars.\n\n#### **• Financial soundness**\n\nFinancial soundness guarantees shareholder remuneration and ensures our commitment to generate sustainable cash flow while maintaining a low level of indebtedness that allows us to face any cycle.\n\nImage /page/149/Figure/11 description: The image shows a pyramid diagram illustrating a sales mix strategy. The pyramid is divided into three levels. The top level, colored in orange, is labeled \"HPAs\" and includes the text \"End user\" and \"Distribution\". The middle level, in light purple, is labeled \"High-value-added stainless steel\" and also includes the text \"End user\" and \"Distribution\". The bottom level, in dark purple, is labeled with \"Tailor-made stainless steel\" and \"Commodity stainless steel\", and includes the text \"End user\" and \"Distribution\". The image also contains the text \"We are changing our sales mix to include more HPAs and value-added products\".\n\nImage /page/149/Picture/12 description: The image contains two horizontal rectangles. The top rectangle is a darker shade of purple, while the bottom rectangle is a lighter shade of purple. The bottom rectangle is slightly offset to the right compared to the top rectangle.\n\nImage /page/149/Picture/13 description: The image shows a close-up of a modern architectural structure with a series of parallel, vertical elements against a clear blue sky. The elements appear to be made of a dark, reflective material, possibly metal, and are arranged in a slightly curved or wave-like pattern. The lighting creates highlights and shadows on the surfaces, emphasizing the three-dimensional form of the structure. The overall composition is abstract and emphasizes the geometric shapes and patterns.\n\n{150}------------------------------------------------\n\nImage /page/150/Picture/1 description: The image shows the text \"Key milestones 2023\" in a large, bold, purple font.\n\nImage /page/150/Picture/2 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. To the right of the wordmark is a partial circle, also in dark blue, that appears to be behind the text, creating a sense of depth.\n\n#### **\\_NAS expansion project**\n\nIn line with Acerinox's commitment to high-value-added products and performance, the Group gave a boost to its US factory, North American Stainless (NAS), one of the most efficient in the world.\n\nDuring 2023, the contracting process for equipment and construction work began; this will generate 70 new jobs as part of a US\\$244 million investment.\n\nThe expansion project includes the modernization of the annealing and pickling lines, the addition of a new cold rolling mill and the expansion of the melting shop, which will include a 400 metric ton crane, as well as the development of digital solutions that will increase production capacity by 20% to 200,000 metric tons.\n\n#### **\\_VDM expansion project**\n\nVDM Metals' leadership in the high-performance alloys industry has been strengthened by a EUR 67 million investment in its German plants in Unna, Altena and Werdohl, which will gradually increase its production capacity of precision strip, bars, and wires, as well as increasing sales by 15%.\n\nProjects include the expansion of three remelting furnaces, the upgrade of an annealing and pickling line, and another defect detection line for bars.\n\nImage /page/150/Picture/10 description: The image shows an architectural structure with a complex grid-like pattern. The structure appears to be a roof or ceiling, with a curved shape and a repeating pattern of interconnected beams or panels. The grid is made up of a series of squares or rectangles, with smaller elements connecting them at the corners. The overall effect is one of intricate design and structural complexity. The image is shot from a low angle, looking up at the structure, which emphasizes its size and scale. The lighting is soft and diffused, which creates a sense of depth and dimension. The colors are muted, with a predominance of grays and whites, which gives the image a modern and minimalist feel.\n\n#### **\\_Second powder sprayer**\n\nAnother focus of the project is the addition of a second powder sprayer plant, used for additive manufacturing (3D printing, used in many areas of high-demand industrial production). VDM Metals enjoys great recognition in this sophisticated format, where it will double its production capacity.\n\nThis investment is significant not only because it reflects the Group's strengthened R&D activity, but also because it underscores its innovative vision, given that the market in metal powders for additive manufacturing has double-digit growth potential.\n\n#### **\\_Exploiting synergies with the highperformance alloys division**\n\nThe investment made in the VDM facilities at Werdohl and Acerinox Europa (Campo de Gibraltar) will enhance synergies in the production of highperformance alloys and increase the range of products available.\n\n#### **\\_Looking to the future: Beyond Excellence 24- 26**\n\nThe Acerinox Group continues to promote excellence through its Beyond Excellence program. The new Excellence Plan will be implemented at all Group factories, carrying out projects between 2024 and 2026 with the aim of reaching EUR 100 million in EBITDA by 2026.\n\n{151}------------------------------------------------\n\nImage /page/151/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, enclosed within a blue circle that is open on the bottom right.\n\nThe purpose of this plan is to improve all areas of the supply chain and to boost the Group's global competitiveness by implementing projects aimed at continuous improvement and adaptability centered on digital transformation, interdisciplinary collaboration, and a commitment to innovation using a holistic approach.\n\nBeyond Excellence is based on six pillars: decarbonization, productivity, quality, efficiency, purchasing optimization, and new product development.\n\nWith specific targets for each, during 2024, we will work along the following lines:\n\n- Increasing quality and in the production of high-value-added steels.\n- Optimize the use of scrap as the main raw material.\n- Increasing equipment productivity through digitalization.\n- Using predictive techniques to improve the quality and maintenance of equipment and processes.\n- Refining energy efficiency resources and consumables, which will result in reduced CO2 emissions.\n\nAs an added value, Beyond Excellence aims - in line with the management by objectives philosophy - to deepen the culture of continuous improvement and innovation at all levels of the organization.\n\nImage /page/151/Picture/11 description: The image shows a low-angle view of several skyscrapers against a clear blue sky. The buildings vary in design, with some featuring glass facades, others with more traditional concrete or stone exteriors, and one appearing to be under construction with a crane visible. Evergreen trees are visible at the bottom of the frame, adding a touch of nature to the urban scene.\n\n{152}------------------------------------------------\n\nImage /page/152/Picture/1 description: The image contains a logo with the word \"ACERINOX\" in bold, sans-serif font. The text is positioned to the left of a circular graphic, which is colored in blue. The logo appears to be for a company named Acerinox.\n\n## **2.3 Risk Management**\n\n**Acerinox has implemented a risk management model backed by the board of directors and senior management. It aims to identify, evaluate and mitigate the risks inherent to the sector in which it operates, as well as their impact on the Group's financial goals and strategic objectives to the continued benefit of its stakeholders.**\n\nAcerinox recognizes its exposure to risks of various types and natures, which may affect both its financial and nonfinancial results. The identification and effective management of these risks is key to business success. To this end, the Company has implemented an Enterprise Risk Management (ERM) program aligned with the COSO ERM framework, covering all of the Group's business areas and overseen by the Board of Directors:\n\nImage /page/152/Figure/5 description: The image shows a diagram of the three lines of defense model. The first line of defense is operations management. The second line of defense is ERM, which includes scope and context, risk assessment (risk identification, risk analysis, risk evaluation), and treatment. Communication and monitoring are also part of the second line of defense. The third line of defense is internal auditing. Above the three lines of defense are the senior management committee/CFO and the board of directors/audit committee. To the right of the three lines of defense are external auditing and regulator.\n\nImage /page/152/Picture/6 description: The image shows a series of white, triangular structures against a clear blue sky. The structures appear to be part of a building or architectural design, possibly a roof or facade. They are made of a grid-like pattern of white lines, creating a geometric and modern aesthetic. The perspective is from below, looking up at the structures, which emphasizes their height and the pattern against the sky.\n\n{153}------------------------------------------------\n\nImage /page/153/Picture/1 description: The image shows the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle that is not fully closed, creating a crescent shape around the text. The background is white.\n\n## **Main risks**\n\nThe Group's ERM model establishes a risk management methodology aimed at simplifying, unifying and homogenizing risk assessment across the Group's companies. The risk taxonomy is divided into six categories. The main risks within each category are detailed below, as well as the most important measures or plans designed to mitigate them:\n\n| Category      | Main risks                                                         | Description and examples                                                                                                                                                                                                                                                                                                                                                                                                                                             | Main responses                                                                                                                                                                                                                                                                                                                              |\n|---------------|--------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| External      | Economic cycles                                                    | The global economic and geopolitical<br>environment may be affected by tensions and<br>adverse changes affecting stainless steel and,<br>therefore, the Acerinox Group's business in its<br>main markets.                                                                                                                                                                                                                                                            | Strategic Plan and Beyond<br>Excellence underway at the Acerinox<br>Group                                                                                                                                                                                                                                                                   |\n|               | Geopolitical                                                       | Geopolitical tensions arising from Russia's<br>invasion of Ukraine, the Israel-Hamas conflict<br>or the growing tension between China and<br>Taiwan can hamper economic development<br>and put stress on supply chains.                                                                                                                                                                                                                                              | Constant global monitoring to<br>mitigate and/or anticipate economic<br>impacts and potential supply chain<br>disruptions                                                                                                                                                                                                                   |\n|               | Trade barriers and<br>competitiveness                              | Acerinox is a group that works across the<br>globe; its activities span multiple countries<br>and are exposed to different regulatory<br>frameworks. Due to the global nature of the<br>business, the Group is exposed to possible<br>risks arising from the existence and/or<br>elimination of trade restrictions such as anti-<br>dumping/anti-subsidy tariffs, export<br>restrictions, special control measures, etc.                                             | Monitoring of global trade and<br>geopolitical trends with an active<br>presence in the main local and<br>international organizations and<br>institutions                                                                                                                                                                                   |\n| ESG           | CO2 emissions                                                      | In matters relating to environmental, social<br>and corporate governance (ESG), the most<br>significant risks are those related to the                                                                                                                                                                                                                                                                                                                               | Concrete plans to reduce CO2 and<br>improve efficiency                                                                                                                                                                                                                                                                                      |\n|               | Energy                                                             | reduction of CO2 emissions, energy and<br>occupational health and safety.<br>Acerinox has targets for 2030 linked to these                                                                                                                                                                                                                                                                                                                                           | Energy efficiency plans for each<br>facility.                                                                                                                                                                                                                                                                                               |\n|               | Health and safety                                                  | three areas; the specific action plans can be<br>found in the corresponding sections of this<br>report.                                                                                                                                                                                                                                                                                                                                                              | Preventive maintenance programs,<br>safety awareness campaigns,<br>training plans                                                                                                                                                                                                                                                           |\n|               | Climate change<br>(emerging risk)                                  | In addition, climate change was identified as<br>an emerging risk, so transition risks and<br>physical were assessed following TCFD (more<br>information in the Eco-efficiency and climate<br>change mitigation chapter)                                                                                                                                                                                                                                             | Decarbonization plan.<br>Implementation of energy efficiency<br>measures, increased use of<br>renewable energies and greater use<br>of sustainable fuels.                                                                                                                                                                                   |\n| Financial     | Raw material price<br>volatility                                   | The production of stainless steel and high-<br>performance alloys requires raw materials,<br>mainly nickel, ferrochromium, molybdenum,<br>and scrap. For the most part, commodity<br>prices are subject to significant volatility due<br>to the aforementioned geopolitical tensions.                                                                                                                                                                                | Alloy surcharge mechanisms and/or,<br>if applicable, financial hedges to try<br>to minimize the impact of the<br>volatility of the main raw materials<br>(nickel, chrome, etc.)                                                                                                                                                             |\n|               | Macroeconomic, market<br>and third-party insolvency<br>variables   | This same context may put special stress on<br>different macroeconomic and market<br>variables, such as interest rates, exchange<br>rates and commodity prices, and likewise the<br>insolvency of third parties. These are risks<br>that the Group faces in its daily operations in<br>order to achieve its financial targets                                                                                                                                        | Partially insure the risk through<br>financial hedging mechanisms and<br>commercial credit insurance policies.<br>There is an internal commercial<br>credit risk management instruction<br>as well as a global Commercial Risk<br>Committee.                                                                                                |\n| Technological | Cybersecurity                                                      | Increased cybercrime has led to greater risks<br>for the company's operations. The<br>development of Al puts the spotlight on the<br>risks associated with new technologies.<br>Cyberattacks can lead to business<br>interruption and the loss of critical<br>information, as well as loss of customer and<br>supplier confidence and the imposition of<br>governmental fines.                                                                                       | The company added a Global CISO in<br>2023. Reporting to the CEO, the<br>CISO will lead the deployment of the<br>cybersecurity strategy. The<br>Cybersecurity Master Plan is<br>underway; this will increase our<br>protection capacity and improve our<br>response to potential threats                                                    |\n| Operational   | Supply chain. Availability<br>of raw materials / basic<br>supplies | The availability of raw materials and, in<br>general, of the supply chain is essential to<br>maintain the continuity of the production<br>process. Events such as the recent Israel-<br>Hamas conflict, the first impact of which has<br>caused transportation problems across the<br>Red Sea, highlight the risks to which supply<br>chains are exposed.<br>Risks affecting transportation, access to raw<br>materials, or availability of other basic<br>supplies. | Reduction of specific consumption.<br>The Group strives to maintain<br>adequate stability in the supply<br>chain, monitoring the quality and<br>reliability of the main suppliers of<br>raw materials, such as nickel and<br>chrome, as well as the other basic<br>supplies necessary to ensure the<br>continuity of our production process |\n| Strategic     | Strategic plans                                                    | The execution and correctness of the<br>strategic plans implemented by the company<br>always comes with a risk of not achieving the<br>targets set. Strategic investments, M&A<br>processes, plans for improvement and target<br>achievement, etc.                                                                                                                                                                                                                   | Regular review of climates and<br>variables that may affect the<br>achievement of strategic plans                                                                                                                                                                                                                                           |\n\n{154}------------------------------------------------\n\nImage /page/154/Picture/1 description: The image contains the logo of Acerinox, a stainless steel manufacturing company. The logo features the word \"ACERINOX\" in bold, sans-serif font, enclosed within a blue circle. The wordmark is positioned in the center of the circle, with the letters slightly curved to conform to the circular shape. The blue circle has a thick outline, giving the logo a clean and modern appearance.\n\n#### **Emerging risks**\n\nThe Group is exposed to many complex, interconnected risks, conditioned by changes in the business context of a globalized, changing world in turmoil. In this context, in addition to the risk taxonomy, Acerinox pays attention to emerging risks, understood as new or unforeseen risks that have not yet been considered or whose potential damages or losses are not fully known.\n\nEmerging risks, uncertain by nature, are a challenge to identify, assess, and mitigate. In this regard, Acerinox monitors global megatrends and the development of geopolitical tensions; likewise, it may review both the internal environment and specialized third-party publications that anticipate emerging risks which may affect the Group, either directly or indirectly.\n\nAmong the aforementioned emerging risks are those associated with climate change, new areas of transformation in the technological context, new regulation linked to sustainability, the transition towards a low-emissions economy, the effect of the evolution of artificial intelligence (AI) and their implications for cybersecurity and disinformation, as well as their repercussions in the geopolitical and economic sphere.\n\nImage /page/154/Picture/7 description: The image shows a low-angle shot of a modern bridge against a clear blue sky. The bridge features a large, curved white arch from which numerous thin, dark cables descend diagonally. These cables are evenly spaced and create a pattern of converging lines. At the top of the arch, thicker cables run horizontally. The composition is framed by a light purple bar at the top and a larger light purple rectangle at the bottom, adding a graphic element to the architectural photograph.\n\n{155}------------------------------------------------\n\nImage /page/155/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slight arc. The text is a dark blue color. The text is enclosed within a circular line, also in dark blue. The background is white.\n\n#### **Review of the cybersecurity model**\n\nIn an increasingly technological world, cyber-threats and security challenges are becoming ever more significant due to their impact on the organization. Their impacts could range from the loss of sensitive data to damage to physical assets or reduced product/service quality, even threatening business continuity itself.\n\nAcerinox believes that it is essential to develop an effective way to manage risks associated with technology, in particular those related to cybersecurity.\n\nThis philosophy is based on the understanding that cybersecurity is one of the essential pillars for the protection of the Group's digital assets and sensitive information. A proactive approach is therefore crucial to safeguarding operational integrity and continuity, as well as to preserve stakeholder confidence, with a special focus on customers.\n\nAcerinox's growing commitment to cybersecurity is reflected in robust governance structures staffed by information security experts, its constant strategy reviews and adherence to internationally-recognized standards such as the ISO/IEC 27001:2017 information security management systems standard, a certification Acerinox has held since 2022.\n\nIn this area, the company added a Global CISO (Chief Information Security Officer) in 2023. Reporting to the CEO, the CISO will lead the deployment of the cybersecurity strategy. Likewise, it has a robust cybersecurity governance structure consisting of a corporate information security committee, chaired by the group CEO and also including the CIO, the director of compliance, the chief legal officer, the chief risk officer and the Group's global CISO. Acerinox also has information security and cybersecurity committees in each business unit that ensure this function is applied consistently throughout the organization.\n\nTo ensure independent control and oversight, the cybersecurity function is subject to regular review by the Audit Committee. Since 2023, the Group has been busy implementing its three-year cybersecurity master plan, which is focused on strengthening the technological, organizational and procedural elements that guarantee that cybersecurity risks as managed properly. This plan is regularly reviewed and updated in order to respond to the shifting cyber-threat landscape.\n\nUnderstanding this landscape means not only taking preventive measures, but also promoting an organizational culture that fosters awareness and shared responsibility in this area. Employee training and awareness is another indispensable pillar for proper cybersecurity management. With these premises in mind, the Group carries out constant training and awareness-raising actions for the entire workforce to promote best practices and mitigate possible risks.\n\nTo this end, Acerinox has a security operations center (SOC) supported by top-tier suppliers, whose purpose is to provide continuous surveillance and an effective response to potential incidents.\n\nAll these efforts reflect the Group's determination to continue managing cybersecurity challenges in a robust, proactive way, thus ensuring that information and assets are protected against potential threats and emerging risks.\n\nImage /page/155/Picture/12 description: The image shows a close-up of a modern building with a glass facade. The glass panels are arranged in a geometric pattern, with some panels angled to create a dynamic and visually interesting effect. The sky is reflected in the glass, creating a sense of depth and openness. The building appears to be well-maintained and in good condition.\n\n{156}------------------------------------------------\n\n## **3. Governance**\n\n#### **GRI 3-3 / 2-19 / 2-20**\n\n**In 2023, Acerinox's new dividend policy came into effect, establishing a stable dividend in its total amount and to the extent that the securities acquired through the share buyback programs are written off, increasing per share. The dividend is distributed in two annual payments, one in January and one in July.**\n\nThe Group's Annual Shareholders' Meeting - held on May 23, 2023, as proposed by the board of directors at their April 12, 2023 meeting and following a report from the Appointments, Remuneration and Corporate Governance Committee - approved an amendment to the Directors' Remuneration Policy. This change implies the inclusion of a clawback clause relating to the total short-term variable remuneration referring therefore to the annual bonus and the Long-Term Incentive whereby the executive directors and senior management personnel of the Company may be required to repay in full the amounts unduly received\n\nThis amendment of the Board of Directors' Regulations was reported on at the 2023 general meeting of shareholders. Said amendment was agreed upon at the meeting of the board of directors held on February 27, 2023, in order to incorporate the regulation of the position of lead independent director. The aforementioned amendment to the regulations was registered with the Madrid Company Register.\n\n## **3.1 Board of directors**\n\n#### **GRI 3-3 / 2-9 / 2-11 / 2-12 / 2-13 / 2-14 / 2-17 / 2-18**\n\nIn 2023, Acerinox's board of directors met fourteen (14) times and consisted of eleven (11) directors. At the Annual Shareholders' Meeting held on May 23, 2023, Mr. Ignacio Martín San Vicente stepped down as independent director, having completed the statutory term for which he had been appointed. In turn, Mr. Pedro Sainz de Baranda Riva was appointed independent director for a term of four (4) years. Mr. George Donald Johnston was also re-elected as independent director at the aforementioned general meeting of shareholders.\n\nImage /page/156/Picture/9 description: The image shows a low-angle shot of a modern building with a unique facade design. The building's exterior is composed of a repeating pattern of diamond-shaped openings, creating a visually striking and textured surface. The color palette is primarily white and gray, with the building's structure appearing in a light gray tone. The sky is visible through the diamond-shaped openings, featuring a mix of blue sky and white clouds. The overall composition of the image emphasizes the building's architectural design and its integration with the natural environment.\n\nIn 2023, the Acerinox board of directors carried out an annual evaluation of its performance and that of its committees through an independent external consultant.\n\nIn terms of training, the members of the Sustainability Committee were trained in various subjects, such as the new corporate sustainability reporting directive (CSRD), and climate risks\n\nThe 2023 Acerinox Annual Corporate Governance Report, the Directors' Remuneration Report, the Financial Statements and the Management Report are available on the Spanish National Securities Market Commission and Acerinox websites.\n\nThe board of directors, in collaboration with its committees, approves the Group's policies. The board of directors and its committees, monitor the company's targets, including those related to sustainability.\n\n#### **Skills matrix**\n\nAt the behest of the Appointments, Remuneration and Corporate Governance Committee, the board of directors drew up and approved its own skills matrix. This document is made to serve as a mandatory guide for all board member selection processes and assignments to specific committees.\n\nThe board of directors brings together a huge range of skills, encompassing industry, sales, investment banking, and finance, as well as specialization in areas such as audit, sustainability, energy and new technologies. It is common for directors to have previous experience on the boards of other major international companies. Similar criteria, extensive experience and a wide variety of knowledge guide the decisions to assign professional profiles to each committee.\n\n{157}------------------------------------------------\n\n**Report**\n\n## **Board of directors**\n\nImage /page/157/Picture/3 description: This image shows a man with short brown hair, wearing a dark blue suit and a red tie with white polka dots. He has fair skin and a serious expression. The background is plain white.\n\n## **CARLOS ORTEGA ARIAS-PAZ**\n\nChairman\n\nProprietary Director representing Corporación Financiera Alba, S.A. Member of the board of directors since May 2022.\n\nElected with the favorable vote of 91.99% of the subscribed voting capital attending the 2022 Annual Shareholders' Meeting.\n\nHolder of 11,111 shares at December 31, 2023.\n\nImage /page/157/Picture/9 description: A man with short dark hair is wearing a dark suit jacket and a light blue tie. He is looking directly at the camera with a serious expression. The background is plain white.\n\n## **BERNARDO VELÁZQUE Z**\n\n## **HERREROS**\n\nChief Executive Officer Executive\n\nMember of the board of directors since 2010, re-elected in 2014, 2018 and 2022.\n\nChief Executive Officer since July 2010. He is a member of the Executive Committee.\n\nRe-elected with the favorable vote of 92.55% of the subscribed voting capital attending the 2022 Annual Shareholders' Meeting.\n\nHolder of 82,690 shares at December 31, 2023.\n\nImage /page/157/Picture/17 description: A woman with long brown hair is shown in a head and shoulders shot. She is wearing a light beige turtleneck sweater and a delicate necklace. The background is plain white.\n\n## **ROSA MARÍA GARCÍA PIÑEIRO**\n\nExternal independent Member of the board of directors\n\nsince 2017, re-elected in 2021.\n\nShe chairs the Sustainability Committee and is a member of the Executive Committee.\n\nRe-elected with the favorable vote of 97.32% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/157/Picture/23 description: This is a portrait of a woman with red hair. She is wearing a dark blazer with a white ruffled shirt underneath. The blazer has a decorative emblem on the lower left side. The woman is smiling and looking directly at the camera. The background is white.\n\n## **LAURA G. MOLERO**\n\nExternal independent Member of the board of directors since 2017, re-elected in 2021.\n\nShe chairs the Appointments, Remuneration and Corporate Governance Committee and is a member of the Audit Committee.\n\nRe-elected with the favorable vote of 97.24% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/157/Picture/28 description: This image shows a man with short gray hair, wearing a dark blue suit and a pink patterned tie. He is smiling slightly and looking directly at the camera. The background is plain white.\n\n### **GEORGE DONALD JOHNSTON**\n\nLead independent director Member of the board of directors since 2014,\n\nre-elected in 2019 and 2023.\n\nHe is a member of the Audit Committee and the Executive Committee.\n\nHolder of 6 shares at December 31, 2023.\n\nRe-elected with the favorable vote of 87.76% of the subscribed voting capital attending the 2019 Annual Shareholders' Meeting.\n\nImage /page/157/Picture/35 description: A professionally lit headshot of a middle-aged man with short, graying hair and glasses. He is wearing a dark suit, a white shirt, and a gray tie. He is smiling slightly and looking directly at the camera. The background is plain white.\n\n### **FRANCISCO JAVIER GARCÍA SANZ**\n\nExternal independent Member of the board of directors since 2020.\n\nHe is a member of the Executive Committee and the Appointments, Remuneration and Corporate Governance Committee.\n\nElected with the favorable vote of 92.78% of the subscribed voting capital attending the 2020 Annual Shareholders' Meeting.\n\n{158}------------------------------------------------\n\nImage /page/158/Picture/1 description: This image shows a man with short brown hair and a beard. He is wearing a dark blue suit jacket, a white shirt, and a green tie. He is smiling and looking directly at the camera. The background is white.\n\n**Report**\n\n### **TOMÁS HEVIA ARMENGOL**\n\nExternal proprietary, representing Corporación Financiera Alba, S.A. Member of the board of directors since 2016, re-elected in 2021.\n\nHe is a member of the Audit and Sustainability Committees.\n\nRe-elected with the favorable vote of 99.13% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/6 description: This is a portrait of a blonde woman with fair skin, wearing a dark blue blazer. She has shoulder-length wavy hair and is smiling at the camera. Her arms are crossed in front of her.\n\n## **MARTA MARTÍNEZ ALONSO**\n\nExternal independent Member of the board of directors since 2017,\n\nre-elected in 2021. She is a member of the Sustainability\n\nCommittee.\n\nRe-elected with the favorable vote of 98.05% of the subscribed voting capital attending the 2021 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/11 description: This is a headshot of a woman with fair skin and shoulder-length blonde hair. She is wearing a dark blue blazer over a white top. The background is white.\n\n### **LETICIA IGLESIAS HERRAIZ**\n\nExternal independent Member of the board of directors since 2020.\n\nShe chairs the Audit Committee. and sits on the Sustainability Committee.\n\nElected with the favorable vote of 92.59% of the subscribed voting capital attending the 2020 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/16 description: A man with light brown hair is wearing a dark suit and a blue tie. He is facing forward and smiling slightly. The background is white.\n\n## **SANTOS MARTÍNEZ-CONDE GUTIÉRREZ-BARQUÍN**\n\nExternal proprietary, representing Corporación Financiera Alba, S.A.\n\nMember of the board of directors since 2002, re-elected in 2006, 2010, 2014, 2018 and 2022.\n\nHe is a member of the Executive Committee and of the Appointments, Remuneration and Corporate Governance Committee\n\nRe-elected with the favorable vote of 91.57% of the subscribed voting capital attending the 2022 Annual Shareholders' Meeting.\n\nHolder of 9,997 shares at December 31, 2023.\n\nImage /page/158/Picture/23 description: This is a headshot of a middle-aged man with short brown hair and blue eyes. He is wearing a black suit jacket over a light blue button-down shirt. The background is white.\n\n## **PEDRO SAINZ DE BARANDA RIVA**\n\nExternal independent Member of the board of directors since 2023.\n\nHe is a member of the Appointments, Remuneration and Corporate Governance Committee, as well as the Sustainability Committee.\n\nElected with the favorable vote of 92.05% of the subscribed voting capital attending the 2023 Annual Shareholders' Meeting.\n\nImage /page/158/Picture/28 description: A man with graying hair is wearing a dark suit and a blue tie with white polka dots. He is smiling slightly and looking at the camera. The background is white.\n\n## **LUIS GIMENO VALLEDOR**\n\nSecretary of the Board and General Secretary of the Acerinox Group. Holder of 23,579 shares at December 31, 2023.\n\n{159}------------------------------------------------\n\nImage /page/159/Picture/0 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in bold, sans-serif, dark blue letters. The word is positioned within a partial circle, also in dark blue, that curves around the top and right side of the text. The background is white.\n\n#### **2023 Integrated Annual**\n\n**Report**\n\nThe articles of association establish that the board may have between five (5) and fifteen (15) directors. Although the maximum number has been reached in the past, there are currently eleven (11) members after the former chairman stepped down in 2022. This number is considered adequate to understand the current needs of the company, although it is subject to change in the future if the circumstances so require.\n\n|                                   |                                 |        | Director  |             |             | Committee |       |                                     |                | Other                |\n|-----------------------------------|---------------------------------|--------|-----------|-------------|-------------|-----------|-------|-------------------------------------|----------------|----------------------|\n| Name                              | Charge                          | Gender | Executive | Proprietary | Independent | Executive | Audit | Appointments<br>and<br>Remuneration | Sustainability | First<br>appointment |\n| Carlos<br>Ortega<br>Arias-Paz     | Chairman                        |        |           | ☑           |             | ☑C        |       |                                     |                | 2022                 |\n| Bernardo<br>Velázquez<br>Herreros | Chief<br>Executive<br>Officer   |        | ☑         |             |             | ☑         |       |                                     |                | 2010                 |\n| Laura G.<br>Molero                | Director                        |        |           |             | ☑           |           | ☑     | ☑C                                  |                | 2017                 |\n| Rosa María<br>Garcia<br>Piñeiro   | Director                        |        |           |             | ☑           | ☑         |       |                                     | ☑C             | 2017                 |\n| George<br>Donald<br>Johnston      | Lead<br>independent<br>director |        |           |             | ☑           | ☑         | ☑     |                                     |                | 2014                 |\n| Francisco<br>Javier<br>García     | Director                        |        |           |             | ☑           | ☑         |       | ☑                                   |                | 2020                 |\n| Tomás<br>Hevia<br>Armengol        | Director                        |        |           | ☑           |             |           | ☑     |                                     | ☑              | 2016                 |\n| Leticia<br>Iglesias<br>Herraiz    | Director                        |        |           |             | ☑           |           | ☑C    |                                     | ☑              | 2020                 |\n| Pedro<br>Sainz de<br>Baranda      | Director                        |        |           |             | ☑           |           |       | ☑                                   | ☑              | 2023                 |\n| Marta<br>Martínez<br>Alonso       | Director                        |        |           |             | ☑           |           |       |                                     | ☑              | 2017                 |\n| Santos<br>Martínez-<br>Conde      | Director                        |        |           | ☑           |             | ☑         |       | ☑                                   |                | 2002                 |\n| Luis<br>Gimeno<br>Valledor        | Secretary                       |        |           |             |             | SEC       | SEC   | SEC                                 | SEC            | -                    |\n\n**\\*C: Chairman**\n\n**Man Woma**\n\n**n**\n\n**At the end of 2023, 36% of board members were women, with a target of reaching 40%**\n\n| Board:                    | 7 |\n|---------------------------|---|\n|                           | 4 |\n| Executive Committee:      | 5 |\n|                           | 1 |\n| Audit Committee:          | 2 |\n|                           | 2 |\n| Appointments Committee:   | 3 |\n|                           | 1 |\n| Sustainability Committee: | 2 |\n|                           | 3 |\n\n{160}------------------------------------------------\n\nImage /page/160/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue crescent shape. The crescent partially encircles the text, creating a sense of enclosure or emphasis.\n\n#### **Changes in the board of directors**\n\n#### **GRI 2-10 / 2-11**\n\n**Report**\n\nAt the Annual Shareholders' Meeting, Mr. Ignacio Martín San Vicente stepped down from his position as director, having completed the statutory term for which he had been appointed, and Mr. Pedro Sainz de Baranda Riva was appointed independent director for a term of four (4) years.\n\n#### **Board committees**\n\n#### **\\_Executive Committee**\n\nComposed of six (6) members, it held two (2) meetings.\n\n#### **\\_Audit Committee**\n\nComposed of four (4) members, it held fourteen (14) meetings.\n\n#### **\\_Appointments, Remuneration and Corporate Governance Committee**\n\nComposed of four (4) members, it held twelve (12) meetings.\n\n#### **\\_Sustainability Committee**\n\nConstituted in December 2020, it is composed of five (5) members and held six (6) meetings.\n\nImage /page/160/Picture/14 description: The image is a square QR code with a white background and dark blue modules. The QR code is dense with a pattern of small squares and larger square finder patterns in three of the corners.\n\n#### **See the powers of the committees at:**\n\nURL: https://www.acerinox.com/export/sit es/acerinox/.content/galerias/galeriadescargas/Reglamento-Consejo-Administracin.pdf\n\nImage /page/160/Picture/18 description: The image shows a geometric glass ceiling with a metal frame. The frame is made up of triangular and hexagonal shapes, and the glass panels are clear. The ceiling is lit from above, and the light is diffused by the glass. The overall effect is one of lightness and airiness.\n\n#### **\\_Management Committee**\n\nAt December 31, 2023, the following members sat on the Acerinox Management Committee:\n\n| Ms. Lucía Alonso de<br>Noriega   | Internal Audit                                  |\n|----------------------------------|-------------------------------------------------|\n| Mr. Daniel Azpitarte             | Chief Integration Officer                       |\n| Ms. Esther Camós                 | Consolidation,<br>Budgeting and Taxation        |\n| Mr. José Campuzano               | Health, safety and<br>environment               |\n| Mr. Carlos Castillo              | Legal Advice                                    |\n| Ms. Marisa Dafauce               | Human Resources                                 |\n| Mr. Mark Davis                   | CEO of Bahru Stainless                          |\n| Mr. Antonio Fernández de<br>Mesa | Treasury                                        |\n| Mr. Miguel Ferrandis             | Chief Financial Officer                         |\n| Mr. Cristóbal Fuentes            | CEO of North American<br>Stainless              |\n| Mr. Juan García                  | Risks                                           |\n| Mr. Rodrigo García-Vega          | Compliance                                      |\n| Mr. Antonio Gayo                 | Strategy                                        |\n| Mr. Luis Gimeno                  | Secretary General and<br>Secretary of the Board |\n| Mr. Fernando Gutiérrez           | CEO of Acerinox Europa                          |\n| Mr. Hans Helmrich                | Chief Operating Officer                         |\n| Mr. Carlos Lora-Tamayo           | Investor Relations and<br>Communication         |\n| Mr. Carlos Marqués               | Raw material purchases                          |\n| Mr. Niclas Müller                | CEO of VDM Metals                               |\n| Ms. Deniza Puce                  | Indirect Purchases                              |\n| Mr. Alberto Ruiz                 | Cybersecurity                                   |\n| Mr. Carlos Ruiz                  | Sustainability                                  |\n| Mr. Johan Strydom                | CEO of Columbus<br>Stainless                    |\n| Ms. Isabel Vaca                  | Information Systems                             |\n\n{161}------------------------------------------------\n\n#### **2023 Integrated Annual**\n\n**Report**\n\nThe variable remuneration of senior management, and therefore of executive directors (only the CEO at present), was determined on the basis of a series of metrics:\n\n- The first set is related to the financial performance of the Acerinox Group, such as EBITDA, profit after tax and non-controlling interests, and net debt.\n- The second set are specific indicators of the companies for which the pertinent member of management is directly and particularly responsible.\n- The last set of metrics reflect sustainability performance.\n\nFurther details regarding the process of accrediting the CEO's bonus can be found in the Directors' Annual Remuneration Report, which is published at the same time as this report and is available on the website of the Company and the Spanish National Securities Market Commission. The total remuneration of Senior Management can also be consulted in the Annual Corporate Governance Report in the places mentioned above.\n\nA portion of Senior Management remuneration, like the chief executive officer and other ensembles within Group Management, is linked to the profit obtained by shareholders over a three-year period. This is measured based on the TSR and ROE during these cycles. This component of remuneration is paid in Company shares.\n\n## **For 2023, the effects of the clawback clause for the CEO and Senior Management contracts have been extended to all variable compensation.**\n\nSpecifically, to the annual variable remuneration and the long-term incentive, following the recommendations of the Good Governance Code.\n\n## **3.2 Annual shareholders' meeting**\n\nThe annual general meeting of Acerinox was held on May 23, 2023 in Madrid with the physical presence of the Company's shareholders. A total of 1,754 shareholders, either in person or by proxy, were in attendance, representing 54.54% of the subscribed voting capital. All items on the agenda were approved with the sufficient majorities required by the Corporate Enterprises Act and the Company's articles of association.\n\nImage /page/161/Picture/11 description: The image shows a symmetrical view of two modern buildings with glass facades reflecting the sky and clouds. The buildings are angled towards each other, creating a V-shape with a bright, white sky visible in the center. The glass panels are framed by dark, thin lines that form a grid pattern, adding depth and structure to the reflective surfaces. The overall composition is clean and architectural, emphasizing the geometric design and the interplay of light and reflection.\n\n{162}------------------------------------------------\n\nImage /page/162/Picture/1 description: The image shows the text \"4. Economic performance\" in a large, bold, dark blue font. The number 4 is followed by a period, and the words \"Economic\" and \"performance\" are written in sentence case.\n\n## **4.1 Production**\n\nThe Acerinox Group produced 1.9 million metric tons in 2023, of which 96 % corresponded to the stainless steels division and 4 % to the high-performance alloys division.\n\nImage /page/162/Figure/5 description: This image is a line graph comparing the production of a melting shop and cold-rolling from 2011 to 2023. The y-axis is labeled with values 0, 2,000,000, and 4,000,000. The melting shop production starts at approximately 2,100,000 in 2011, gradually increases to around 2,400,000 in 2017, then fluctuates, reaching a peak at approximately 2,500,000 in 2021, and finally decreases to about 2,000,000 in 2023. The cold-rolling production starts at approximately 1,600,000 in 2011, increases to around 1,900,000 in 2017, fluctuates, reaching a low of approximately 1,600,000 in 2021, and ends at approximately 1,500,000 in 2023.\n\n### **\\_Quarterly performance of stainless steel division production (thousands of metric tons)**\n\n|                             | 2023 |     |     |     |             | 2022    | Variation   |\n|-----------------------------|------|-----|-----|-----|-------------|---------|-------------|\n|                             | Q1   | Q2  | Q3  | Q4  | Accumulated | Jan-Dec | 2023 - 2022 |\n| Melting shop                | 515  | 465 | 423 | 468 | 1,869       | 2,108   | -11.3%      |\n| Cold rolling                | 311  | 304 | 283 | 328 | 1,225       | 1,441   | -15.0%      |\n| Long products (hot rolling) | 42   | 36  | 32  | 28  | 139         | 233     | -40.6%      |\n\n### **\\_Quarterly performance of high-performance alloys division production (thousands of metric tons)**\n\n|                | 2023 |    |    |    | 2022        |         | Variation   |\n|----------------|------|----|----|----|-------------|---------|-------------|\n|                | Q1   | Q2 | Q3 | Q4 | Accumulated | Jan-Dec | 2023 - 2022 |\n| Melting shop   | 19   | 21 | 17 | 18 | 76          | 82      | -7.0%       |\n| Finishing shop | 8    | 12 | 11 | 10 | 40          | 44      | -9.2%       |\n\nImage /page/162/Picture/10 description: The image shows a complex network of pipes and industrial equipment. The pipes are made of metal and are of varying sizes. Some of the pipes are insulated. The equipment is located in a large, open space. The lighting is dim, and the overall impression is one of a busy, industrial environment.\n\nImage /page/162/Picture/11 description: The image contains the word \"ACERINOX\" in bold, white letters inside a blue circle. The circle is slightly cropped on the right side.\n\n{163}------------------------------------------------\n\nImage /page/163/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with a slight 3D effect. The text is positioned within a partial blue circle that curves around the top and right side of the word. The blue circle appears to be a thick line, and it does not fully enclose the text.\n\n### **\\_Group production**\n\nImage /page/163/Figure/3 description: This bar chart shows the melting shop production (MT) for Acerinox Europa, NAS, Columbus, and VDM Metals. Acerinox Europa has a production of 550,162. NAS has a production of 841,821. Columbus has a production of 477,434. VDM Metals has a production of 76,288.\n\nImage /page/163/Picture/4 description: The image shows a close-up of a gear mechanism, possibly part of a machine or engine. The gears are made of metal and have a shiny, reflective surface. The image is in black and white, which gives it a timeless and industrial feel. The gears are intricately designed, with many teeth and grooves that interlock to create a complex system. The image is well-lit, with the light reflecting off the metal surfaces and creating highlights and shadows. The overall effect is one of precision and engineering.\n\nImage /page/163/Figure/6 description: This bar chart shows the values for Acerinox Europa, NAS, Columbus, Bahru, and VDM Metals. Acerinox Europa has a value of 407,045. NAS has a value of 542,005. Columbus has a value of 199,127. Bahru has a value of 77,181. VDM Metals has a value of 39,973.\n\nIn 2023, production in the stainless steel division maintained the downward trend that appeared during the fourth quarter of 2022.\n\nThe low level of demand throughout the year, along with the inventory reduction process, meant that all the factories in the stainless steel division had to adjust their production to market conditions.\n\nIn the case of the high-performance alloys division, demand remained stable throughout the year, while production activity was slightly lower than in the record year of 2022 (-7% melting shop production).\n\n{164}------------------------------------------------\n\n## **4.2 Financial results**\n\n#### **\\_Key indicators - EUR million**\n\n| 703    | 6.608   | 228        | 341                | 13.34% |\n|--------|---------|------------|--------------------|--------|\n| EBITDA | REVENUE | NET INCOME | NET FINANCIAL DEBT | ROCE   |\n\nImage /page/164/Picture/5 description: The image shows the number 13.34% in a bold, dark blue font. There is a short, horizontal, light orange line underneath the number.\n\n#### **Group's consolidated results**\n\nIn a complex environment, Acerinox's results reflect the Group's resilience even at the lowest points in the cycle. 2023 was marked by macroeconomic and geopolitical tensions, supply chain challenges and incidents affecting trade routes. In these circumstances, the Group's flexibility in adapting to market conditions, cost controls, working capital reduction and debt reduction was evident.\n\nThe remarkable results given this market context demonstrate the foresight of the strategic decisions made in recent years, as well as the increased efficiency achieved in the last decade. Acerinox is managing to flatten and mitigate industry's cyclical nature while consolidating a new profitability threshold and consistently generating value across different economic cycles.\n\nThe stainless steel industry was affected by the inventory reduction process launched during the second half of 2022. Uncertainties in different markets pushed back new purchases, causing a sharp drop in apparent demand, which affected the Group's operations during 2023.\n\nOn the other hand, the high-performance alloys market - the focus of part of Acerinox's strategy, renewing its commitment to higher-value-added products - performed satisfactorily, maintaining its strength, solid demand and good prospects.\n\n### **Diversification and added value**\n\nIn recent years, Acerinox has focused its strategy on a process of geographic and product diversification, with a special focus on higher-value-added solutions.\n\nIn 2023, the Group's main markets faced similar challenges: downward trends in demand and consumption, high inventory levels and the uncertainties generated by the geopolitical situation. While Europe suffered from falling prices and rising costs, prices remained stable in the North American market.\n\nIn addition, the high-performance alloys industry boosted Acerinox's presence in strategic industries with high profitability and long-term growth. It also strengthened the Group's position as a supplier of a wide variety of materials and modified the sales mix with new high-value-added solutions. Thanks to its production and distribution network, the Company was close to suppliers and customers, supporting the regionalization process and improving supply chains.\n\nDespite the unfavorable environment, Acerinox's strong cash generation and ability to make efficient use of capital allowed it to reduce its net financial debt and continue to generate value for shareholders. In 2023, the Group's shareholders benefited from a total dividend of EUR 150 million, consolidating the ongoing commitment to increasing the dividend per share that characterized previous years.\n\nImage /page/164/Picture/16 description: The image shows a close-up view of a concrete overpass. The overpass is supported by large, triangular concrete pillars. The pillars are connected to the overpass by black metal beams. The overpass is curved and has a metal railing along the edge. The sky is visible in the background.\n\n{165}------------------------------------------------\n\nImage /page/165/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, black letters. The word is enclosed within a blue circle that is open on the right side.\n\nThe most important figures for the year and the change with respect to the previous one are summarized in the following table:\n\n| EUR million                                                | 12M 2023   | 12M 2022     | % 12M 23 / 12M 22 |\n|------------------------------------------------------------|------------|--------------|-------------------|\n| Melting shop production<br>(thousands of metric tons)      | 1,946      | 2,190        | -11%              |\n| Net sales                                                  | 6,608      | 8,688        | -24%              |\n| <b>EBITDA</b>                                              | <b>703</b> | <b>1,276</b> | <b>-45%</b>       |\n| EBITDA margin                                              | 11%        | 15%          |                   |\n| Adjusted EBIT (1)                                          | 530        | 1,080        | -51%              |\n| Adjusted EBIT margin                                       | 8%         | 12%          |                   |\n| EBIT                                                       | 374        | 876          | -57%              |\n| EBIT margin                                                | 6%         | 10%          |                   |\n| Pre-tax income                                             | 355        | 831          | -57%              |\n| <b>Profit after tax and non-<br/>controlling interests</b> | <b>228</b> | <b>556</b>   | <b>-59%</b>       |\n| Operating cash flow                                        | 481        | 544          | -12%              |\n| Net financial debt                                         | 341        | 440          | -23%              |\n\n(1) Adjusted EBIT: excluding an impairment of the assets of Bahru Stainless amounting to EUR 204 million in 2022 and EUR 156 million in 2023.\n\nRevenue for the year totaled EUR 6,608 million, 24% lower than the previous year, marked by sharp declines in apparent demand and prices in the main markets in which the Group operates.\n\n### **\\_Geographic distribution of sales**\n\nImage /page/165/Figure/7 description: This image is a pie chart showing the distribution of something across different continents. Europe accounts for 39.4%, Asia accounts for 8.0%, America accounts for 47.2%, Africa accounts for 5.1%, and Oceania accounts for 0.3%.\n\n**The Group made a substantial effort to adapt to market conditions and ended the year with the lowest inventory levels in its history, allowing for a significant reduction in working capital**\n\nImage /page/165/Picture/9 description: The image shows a view looking up through a glass-walled structure, possibly a building or atrium. The glass panels are framed by a network of metal supports, creating a grid-like pattern against the bright blue sky visible through the glass. On the left side of the frame, there is a large, dark, cylindrical column, which adds depth and scale to the composition. In the background, a tall building with a grid of windows can be seen through the glass, suggesting an urban setting. The overall perspective is upward, emphasizing the height and architectural design of the structure.\n\n{166}------------------------------------------------\n\nImage /page/166/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, partially enclosed within a blue circle. The circle is incomplete, appearing behind the text.\n\n#### **\\_Quarterly EBITDA 2021, 2022 and 2023 - EUR million**\n\nImage /page/166/Figure/3 description: The image is a bar chart showing data for the years 2021, 2022, and 2023. The x-axis represents the quarters of each year (Q1, Q2, Q3, Q4), and the y-axis represents the values. The values for each quarter are as follows: Q1 2021: 161, Q2 2021: 217, Q3 2021: 293, Q4 2021: 318, Q1 2022: 422, Q2 2022: 523, Q3 2022: 241, Q4 2022: 90, Q1 2023: 226, Q2 2023: 236, Q3 2023: 146, Q4 2023: 96.\n\nDespite the drop in demand, the Group managed to obtain a commendable EBITDA of EUR 703 million, 45% lower than 2022, an all-time record for the Company in its more than 50-year history.\n\nThe EBITDA margin rose to 10.6%. This figure includes an inventory adjustment to net realizable value of EUR 65 million.\n\nDepreciation and amortization, at EUR 171 million, decreased by 11% compared to the previous year.\n\nOperating profit (EBIT) amounted to EUR 374 million. Excluding the impairment of Bahru Stainless (EUR 156 million), adjusted EBIT would be EUR 530 million. Profit after tax and non-controlling interests for 2023 amounted to EUR 228 million, 59% down on 2022.\n\n#### **\\_Profit after tax and non-controlling interests - EUR million**\n\nImage /page/166/Figure/9 description: The image is a bar graph showing values for the years 2019, 2020, 2021, 2022, and 2023. The value for 2019 is -60, for 2020 is 19, for 2021 is 572, for 2022 is 556, and for 2023 is 228.\n\n#### **Impairment of Bahru Stainless**\n\n Existing overcapacity in Asia, as well as the difficulty of turning a profit at the Group's factory in Malaysia, have led management to reflect strategically on the future of this plant, not ruling out the possibility of ceasing operations.\n\nAs a result, the maximum possible impairment of assets in Bahru Stainless was conducted, amounting to EUR 156 million. This did not result in a cash outflow.\n\n#### **Cash generation**\n\nOne of the Acerinox's strategic pillars is to maintain its financial strength, defined as sustainable cash generation over time to make efficient use of capital and generate value for the shareholder.\n\nCash generation continues to be one of the Group's priority objectives. In 2023, despite the lower result obtained, management to reduce Acerinox's working capital, mainly inventories, resulted in an operating cash flow of EUR 481 million (EUR 544 million in 2022).\n\nImage /page/166/Picture/16 description: The image shows a stack of metal pipes. The pipes are arranged in rows and columns, and they are all the same size and shape. The pipes are made of a shiny metal, and they have a smooth surface. The pipes are stacked close together, and they take up most of the frame. The background is blurred, which helps to focus attention on the pipes.\n\n{167}------------------------------------------------\n\nImage /page/167/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle that is open on the left side.\n\n### **\\_Cash flow - EUR million**\n\n|                               | 12M 2023 | 12M 2022 |\n|-------------------------------|----------|----------|\n| EBITDA                        | 703      | 1,276    |\n| Changes in working capital    | 79       | -479     |\n| Corporate income tax          | -233     | -238     |\n| Finance costs                 | -4       | -25      |\n| Other adjustments             | -65      | 10       |\n| OPERATING CASH FLOW           | 481      | 544      |\n| Payments due to investment    | -175     | -126     |\n| FREE CASH FLOW                | 307      | 419      |\n| Dividends and treasury shares | -152     | -336     |\n| CASH FLOW AFTER DIVIDENDS     | 155      | 83       |\n| Translation differences       | -56      | 55       |\n| Changes in net financial debt | 99       | 138      |\n\nIn a year of falling apparent consumption, with the price of nickel falling throughout the year and industry prices in Europe at historic lows, working capital was reduced by EUR 79 million.\n\nIncome tax payments amounted to EUR 233 million, due to the good result obtained by the Company in the previous year.\n\nAfter investment payments of EUR 175 million, the free cash flow generated amounted to EUR 307 million.\n\nShareholder remuneration for the year amounted to EUR 150 million in ordinary dividends, as a cash payment of EUR 0.60 per share was made, representing a payout of 66%.\n\nOn the other hand, the depreciation of the US dollar (-4% in the year) generated negative translation differences of EUR 56 million.\n\nImage /page/167/Picture/9 description: The image shows an architectural structure with a complex grid pattern. The grid is made up of many small, rectangular shapes that are arranged in a repeating pattern. The structure is made of metal and glass, and the grid pattern is visible through the glass. The overall effect is one of complexity and order.\n\n{168}------------------------------------------------\n\n## **\\_Statement of financial position and financing**\n\n### **ASSETS**\n\n| EUR million                    | 2023  | 2022  | Variation |\n|--------------------------------|-------|-------|-----------|\n| Non-current assets             | 1,777 | 1,902 | -7%       |\n| Current assets                 | 4,322 | 4,416 | -2%       |\n| Inventories                    | 1,861 | 2,156 | -14%      |\n| Receivables                    | 618   | 646   | -4%       |\n| Customers                      | 560   | 575   | -3%       |\n| Other receivables              | 58    | 71    | -18%      |\n| Cash                           | 1,794 | 1,548 | 16%       |\n| Other current financial assets | 50    | 67    | -25%      |\n| Total assets                   | 6,099 | 6,318 | -3%       |\n\n### **LIABILITIES**\n\n| EUR million                   | 2023  | 2022  | Variation |\n|-------------------------------|-------|-------|-----------|\n| Equity                        | 2,463 | 2,548 | -3%       |\n| Non-current liabilities       | 1,733 | 1,823 | -5%       |\n| Bank borrowings               | 1,291 | 1,394 | -7%       |\n| Other non-current liabilities | 442   | 429   | 3%        |\n| Current liabilities           | 1,902 | 1,947 | -2%       |\n| Bank borrowings               | 844   | 594   | 42%       |\n| Trade payables                | 787   | 1,017 | -23%      |\n| Other current liabilities     | 272   | 335   | -19%      |\n| Total Liabilities             | 6,099 | 6,318 | -3%       |\n\n### **\\_Net financial debt - EUR million**\n\nImage /page/168/Figure/7 description: The image is a bar graph comparing data from 2022 and 2023. The bar for 2022 is colored in light purple and has a value of 440. The bar for 2023 is colored in light gray and has a value of 341.\n\nImage /page/168/Picture/8 description: The image shows a stack of metal pipes. The pipes are arranged in a neat pile, and they appear to be made of a shiny metal. The background is blurred, but it looks like the pipes are in a warehouse or factory setting.\n\n{169}------------------------------------------------\n\nImage /page/169/Picture/1 description: The image contains the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned to the left of a blue circle. The circle is not fully visible, as it is partially cut off on the left side of the image.\n\nImage /page/169/Figure/3 description: This image shows a bar graph titled \"Liquidity\". The graph contains two categories: \"Available lines\" and \"Cash\". The value for \"Available lines\" is 1,794, and the value for \"Cash\" is 672.\n\n#### **\\_Liquidity - EUR million \\_Maturities of term debt - EUR million**\n\n## **EUR 2,135** million\n\nImage /page/169/Figure/6 description: This bar chart shows the term debt maturity from 2024 to 2030. The y-axis is labeled from 0 to 1,000. In 2024, the term debt maturity is 844. In 2025, the term debt maturity is 521. In 2026, the term debt maturity is 401. In 2027, the term debt maturity is 261. In 2028-2030, the term debt maturity is 108.\n\nNet financial debt at December 31, 2023 of EUR 341 million had fallen by EUR 99 million (EUR 440 million at December 31, 2022).\n\nAs in 2022, during 2023, the Group continued to actively manage its long-term loans and renew its credit lines to maintain the Group's liquidity. In this regard, the most relevant financial operations in 2023 were as follows:\n\n- Renewal of the syndicated factoring agreement in Spain until 2026, increasing the maximum amount to EUR 380 million and including a new assignor (VDM Metals International)\n- Renewal of the Columbus Borrowing Base Facility in South Africa until 2027 for a total maximum amount of ZAR 3.5 billion\n- Renewal and extension of credit facilities up to a total amount of EUR 301 million and US\\$135 million.\n- Signing of five new long-term loans in Spain with various financial institutions for a total amount of EUR 155 million.\n- 1.5 year extension of the loan signed by VDM for EUR 30 million.\n- Extension for an additional year (until 2025) of the bilateral financing lines signed with VDM with five financial institutions for a total amount of EUR 210 million.\n- Increase in Bahru Stainless' short-term financing facilities (credit lines and revolving credit facilities) to a maximum of US\\$145 million.\n\nAt year-end, the Group had sustainable outstanding debt totaling EUR 647.4 million, linking the cost of the credit to the evolution of the established indicators to be reviewed annually. At December 31, 2023, the majority of the Group's financing corresponded to term loans, of which almost 80% were due to mature in over a year. Overall, 70% of the loans and private placements were at fixed interest rates (these figures include loans closed at floating interest rates but hedged with an interest rate derivative).\n\nAs of December 31, 2023, the Acerinox Group had liquidity amounting to EUR 2,465 million. Of this amount, EUR 1,794 million corresponded to cash and short-term deposits and EUR 672 million to available financing at various Group subsidiaries.\n\n{170}------------------------------------------------\n\nImage /page/170/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open on the left side, and the text is aligned to the left within the circle's bounds. The color of the text is also blue, matching the color of the circle.\n\n#### **Financial ratios**\n\nThe net financial debt/EBITDA ratio was 0.49x (0.35x in 2022), demonstrating our good financial situation.\n\nThe gearing ratio stood at 14%, a 25-year low.\n\nReturn on capital employed (ROCE) was 13.34% in 2023 (29.31% in 2022). Adjusted ROCE (excluding the impairment of Bahru Stainless) was 17.9%, exceeding the Group's target of 15%.\n\n#### **\\_Net financial debt to EBITDA - No. of times**\n\nImage /page/170/Figure/7 description: The image is a bar chart comparing values from 2019 to 2023. In 2019 the value is 1.36, in 2020 the value is 2.01, in 2021 the value is 0.58, in 2022 the value is 0.35, and in 2023 the value is 0.49.\n\nImage /page/170/Picture/8 description: A low-angle shot captures a section of a modern bridge against a clear, vibrant blue sky. The bridge's design features a tall, white, rectangular pillar that serves as a central support. From this pillar, a series of white cables extend outwards, creating a fan-like pattern. These cables are evenly spaced and run diagonally across the frame, adding a sense of depth and dimension to the image. The pillar itself has a textured surface, with visible seams and indentations that suggest a modular construction. The bright sunlight illuminates the structure, casting subtle shadows that accentuate its form. The overall composition is clean and minimalist, emphasizing the bridge's architectural design and the contrast between the white structure and the blue sky.\n\n#### **ROE in 2023 stood at 9.3% while ROCE was 13.3%**\n\nImage /page/170/Figure/10 description: This image contains two bar charts, one labeled \"\\_ROE - %\" and the other labeled \"\\_ROCE - %\". The \"\\_ROE - %\" chart shows the following data: in 2019, the value is -3.1%; in 2020, the value is 3.0%; in 2021, the value is 25.8%; in 2022, the value is 21.8%; and in 2023, the value is 9.3%. The \"\\_ROCE - %\" chart shows a value of 0.x in 2020.\n\nROCE - %\n\nImage /page/170/Figure/12 description: The image is a bar graph comparing percentages across the years 2019, 2020, 2021, 2022, and 2023. In 2019, the percentage is 0.9%. In 2020, the percentage is 6.8%. In 2021, the percentage is 29.0%. In 2022, the percentage is 29.3%. In 2023, the percentage is 13.3%.\n\n{171}------------------------------------------------\n\n#### **Average period of payment to suppliers**\n\nWith regard to the average payment period, Law 18/2022 of September 29 on the establishment and growth of companies amended the related law, in particular the additional provision 3, which establishes an information requirement and obliges all listed companies to explicitly indicate in their Annual Accounts the average payment period to suppliers, the volume of money and the number of invoices paid in a period lower than the maximum established in the regulations on late payments, as well as the percentage of these invoices in the total number of invoices and in the total amount of money paid to their suppliers. The Group has taken this amendment into account.\n\nThe average period of payment to suppliers of the Spanish companies that form part of the Acerinox Group, after deducting payments made to Group companies, is as follows:\n\n|                                        | 2023      | 2022      |\n|----------------------------------------|-----------|-----------|\n|                                        | Days      | Days      |\n| Average period of payment to suppliers | 64 days   | 63 days   |\n| Ratio of operations settled            | 62 days   | 62 days   |\n| Ratio of transactions pending payment  | 81 days   | 80 days   |\n|                                        | Amount    | Amount    |\n| Total payments made                    | 2,363,976 | 2,384,319 |\n| Total outstanding payments             | 189,493   | 189,759   |\n\nThe table includes payments made to any supplier, whether domestic or foreign, and excludes Group companies.\n\nAs regards the new mandatory disclosures for Spanish companies belonging to the group, the situation is as follows:\n\n|                                                                                                                                            | 2023      | 2022      |\n|--------------------------------------------------------------------------------------------------------------------------------------------|-----------|-----------|\n| a) Monetary volume of invoices paid within a period equal<br>to or less than the maximum established in the regulations<br>on late payment | 1,114,046 | 1,129,490 |\n| Percentage share of total number of invoices of payments<br>to its suppliers                                                               | 47%       | 47%       |\n| b) Number of invoices paid within a period equal to or less<br>than the maximum period established in the late payment<br>regulations      | 23,427    | 22,172    |\n| Percentage share of total monetary payments to its<br>suppliers                                                                            | 41%       | 40%       |\n\nImage /page/171/Picture/8 description: The image shows a low-angle view of two modern buildings connected by a skybridge. The buildings are primarily made of glass and steel, with a grid-like pattern of windows. The skybridge is also made of glass and steel, and it appears to be suspended between the two buildings. The sky is visible in the background, and it is a light blue color.\n\n{172}------------------------------------------------\n\nImage /page/172/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The word is in a darker color, possibly black or a dark shade of blue, which contrasts with the white background. The blue circle is incomplete, forming an arc around the word. The overall design is simple and corporate.\n\n#### **\\_Stainless steel division results**\n\n| EUR million                                           | 12M 2023 | 12M 2022 | % 12M 23 / 12M 22 |\n|-------------------------------------------------------|----------|----------|-------------------|\n| Melting shop production<br>(thousands of metric tons) | 1,869    | 2,108    | -11%              |\n| Net sales                                             | 5,195    | 7,426    | -30%              |\n| EBITDA                                                | 533      | 1,151    | -54%              |\n| EBITDA margin                                         | 10%      | 16%      |                   |\n| Depreciation and<br>amortization                      | -138     | -161     | -14%              |\n| Adjusted EBIT*                                        | 393      | 987      | -60%              |\n| Adjusted EBIT margin                                  | 8%       | 13%      |                   |\n| EBIT                                                  | 237      | 783      | -70%              |\n| EBIT margin                                           | 5%       | 11%      |                   |\n| Operating cash flow<br>(before investments)           | 475      | 648      | -27%              |\n\n\\*Includes the impairment of assets at Bahru Stainless amounting to EUR 204 million in 2022 and EUR 160 million in 2023\n\nRevenue was down 30% compared to 2022 due to lower sales and price drops in all markets.\n\nEBITDA amounted to EUR 533 million, 54% down on 2022. This figure includes an adjustment of inventories to net realizable value of EUR 49 million.\n\nOperating cash flow totaling EUR 475 million was generated owing to the EUR 206 million decrease in working capital.\n\n#### **\\_Cash flow - EUR million**\n\n| EUR million                | 12M 2023 | 12M 2022 |\n|----------------------------|----------|----------|\n| EBITDA                     | 533      | 1,151    |\n| Changes in working capital | 206      | -247     |\n| Corporate income tax       | -230     | -233     |\n| Finance costs              | 17       | -14      |\n| Other adjustments          | -50      | -8       |\n| OPERATING CASH FLOW        | 475      | 648      |\n\nImage /page/172/Picture/10 description: The image shows a close-up view of a white metal structure against a blue sky with clouds. The structure appears to be part of a building or bridge, with a repeating pattern of diagonal and horizontal beams connected by bolts and fasteners. The metal is painted white, and the sky is visible through the gaps in the structure.\n\n{173}------------------------------------------------\n\nImage /page/173/Picture/1 description: The image shows the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged in a slightly curved manner. The text is positioned within a blue circle that is not fully closed, creating a crescent shape around the text. The background is white.\n\n#### **\\_High-performance alloys division results**\n\nThe alloys division exploited the favorable market momentum with a sound management of raw material purchases, the backlog and product mix, which led VDM to achieve the best results in its history, surpassing the record achieved in 2022.\n\n| EUR million                                           | 12M 2023 | 12M 2022 | % 12M 23 / 12M 22 |\n|-------------------------------------------------------|----------|----------|-------------------|\n| Melting shop production<br>(thousands of metric tons) | 76       | 82       | -7%               |\n| Net sales                                             | 1,437    | 1,262    | 14%               |\n| EBITDA                                                | 175      | 125      | 40%               |\n| EBITDA margin                                         | 12%      | 10%      |                   |\n| Depreciation and<br>amortization                      | -24      | -24      | 1%                |\n| EBIT                                                  | 151      | 102      | 49%               |\n| EBIT margin                                           | 11%      | 8%       |                   |\n| Operating cash flow<br>(before investments)           | 7        | -104     |                   |\n\nHigh-performance alloys revenue reflected the favorable market momentum with 14% growth compared to 2022.\n\nEBITDA generated—EUR 175 million—was 40% higher than in the previous year, setting a new record. At year-end, an inventory adjustment to net realizable value of EUR 16 million was carried out.\n\nMeanwhile, operating cash flow was EUR 6.5 million, due to an increase in working capital of EUR 126 million as a result of good activity.\n\n#### **\\_Cash flow - EUR million**\n\n| EUR million                | 12M 2023 | 12M 2022 |\n|----------------------------|----------|----------|\n| EBITDA                     | 175      | 125      |\n| Changes in working capital | -126     | -232     |\n| Corporate income tax       | -3       | -5       |\n| Finance costs              | -25      | -11      |\n| Other adjustments          | -14      | 18       |\n| OPERATING CASH FLOW        | 7        | -104     |\n\n{174}------------------------------------------------\n\nImage /page/174/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right, giving it a crescent shape.\n\n## **4.3 Excellence 360º Plan**\n\nIn 2023, the Group advanced in the deployment of the Excellence 360º Plan, featuring digital transformation as the driving force to gather and direct the Group's strategies until they are aligned with its production requirements, thus maximizing business opportunities.\n\nImage /page/174/Picture/4 description: The image shows a diagram with the word \"Excellence\" in the center, surrounded by a circular arrow with the number \"360\" inside. The diagram is divided into four sections: \"Production\", \"Supply chain\", \"Raw materials\", and \"Commercial\". The \"Production\" section lists \"Quality\", \"Maintenance\", \"Productivity\", \"Yield\", and \"Production materials\". The \"Supply chain\" section lists \"Logistics\" and \"On time in full delivery\". The \"Raw materials\" section lists \"Mix optimization\" and \"Purchasing planning\". The \"Commercial\" section lists \"Sales increase\" and \"Sales management\".\n\nThe Excellence 360º Plan made it possible to successfully tackle the uncertain environment that characterized the steel industry in 2023, as well as the weakness of the industrial market in the face of constantly rising energy prices and supply failures. These factors were compounded by the unstable geopolitical situation and the resurgence of armed conflicts. Production cuts resulting from this global scenario prevented value chain optimization, as in other periods of stability, with an average savings during the life of the plan of close to 40%.\n\nIn this area, achievements in areas such as the optimization of raw material purchases and the improvement in melting shop yields stand out, with final results above the targets set, as does progress in the reduction of material sent to landfill, and the increase in line processing capacity.\n\nThe success of the excellence plans implemented over the last 15 years and the know-how acquired by Acerinox during their execution planted the seed for the design of the new Beyond Excellence Plan.\n\n### **Digital Transformation Plan**\n\nThe Digital Transformation Plan, one of the main enablers for pushing forward Excellence, has turned Acerinox into one of the major companies in Industry 4.0.\n\nIts three core programs of recent years - automation and robotization, integrated planning, and data analytics - have been complemented by the addition of a fourth: traceability. The combination of their advances makes the Group not only a Smart Factory, but a Smart Company, building a process improvement strategy with the help of the most innovative technologies, such as AI and digital twins.\n\nDuring 2023, the Group launched nearly 40 initiatives along the value chain, implementing them at its main facilities.\n\nSpecifically, this activity was focused on improvements to the advanced analytics program, with promising projects such as the following:\n\n- Predictive maintenance to ensure constant monitoring of critical assets.\n- Predictive quality, which allows surface defects in cold rolling production to be reduced. A global project launched at all the stainless steel division's factories.\n- Real-time statistical monitoring of the hot rolling process to reduce its variability. A pilot project deployed in Google Cloud that, in 2024, will be extended to other production areas.\n- Melting shop digital twin technology to help optimize slab costs.\n- Scrap metal characterization using AI for image recognition.\n- Progress in the project to promote product traceability.\n- At flat product factories, progress was made in the deployment of sequencers to optimize production campaigns.\n\n{175}------------------------------------------------\n\nAcerinox has joined the Association to Promote the Data Economy and Artificial Intelligence in Spanish Industry, IndesIA, as it works to modernize and digitalize Spanish companies. Acerinox will be an active part of the IndesIA ecosystem, enriching its teams, learning, and benchmarking, using the different working groups to develop products and projects while contributing its experience in these fields.\n\nImage /page/175/Picture/2 description: The image contains the logos of ACERINOX and INDESIA, along with text. The ACERINOX logo is a blue circle with the company name in white. The INDESIA logo is in black and orange. Below the logos is the text \"Consorcio Nacional Industrial para el Impulso de la Economia del Dato y de la Inteligencia Artificial\" in black.\n\nImage /page/175/Picture/3 description: The image shows a low-angle view of a bridge against a clear sky. The bridge is constructed with steel beams and concrete supports. The steel beams are painted in a light blue color, while the concrete supports are in a light beige color. The sky is a pale blue color. The bridge is angled from the top left to the bottom right of the image.\n\n**Digitalization and innovation**\n\n**EUR 17.6** million digitalization and innovation investments and expenses\n\n## **4.4 Acerinox shares**\n\nAcerinox's share capital on December 31, 2023, after the redemption of 10,388,974 shares approved at the Annual Shareholders' Meeting on May 23, 2023, was set at EUR 62,333,842.75. It is represented by 249,335,371 shares, with a par value of EUR 0.25 per share.\n\nAll shares are admitted to official trading on the Madrid and Barcelona stock exchanges and are traded on the continuous market.\n\nAt December 31, 2023, Acerinox had a total of 44 thousand shareholders:\n\n|                                                         | No. of shares | % capital |\n|---------------------------------------------------------|---------------|-----------|\n| Corporación Financiera Alba SA                          | 48,101,807    | 19.29%    |\n| Danimar 1990 SL                                         | 14,224,988    | 5.71%     |\n| Industrial Development Corporation of South Africa LTDA | 8,809,294     | 3.53%     |\n| Other investors                                         | 178,199,282   | 71.47%    |\n\n**Domestic investors represent 58% of share capital; foreign investors represent 42%**\n\nImage /page/175/Picture/12 description: The image shows a low-angle view of a modern building with glass windows. The windows reflect the sky and clouds, creating a sense of depth and perspective. The building appears to be tall and imposing, with clean lines and a sleek design. The overall impression is one of modernity and sophistication.\n\n{176}------------------------------------------------\n\nImage /page/176/Picture/1 description: The image shows the Acerinox logo. The logo consists of a blue circle with the word \"ACERINOX\" written in blue, bold letters inside the circle.\n\n#### **Analyst and investor relations**\n\nAcerinox guarantees the market equal access to information through all communication channels. Our website (acerinox.com) plays a very important role in applying this transparent communication policy and serves as a guarantee of access to information.\n\nAny minority shareholder may contact the shareholder's office to make any request for information on Acerinox's performance.\n\nAcerinox must maintain fluid and efficient communication with the financial markets, shareholders and investors, which is why the investor relations team provides intensive, proactive service to the financial community. In 2023 Acerinox attended 25 events organized by brokers (conferences and roadshows), and held more than 223 direct meetings (62% individual meetings and the rest in groups), in which more than 130 entities were assisted. In addition to these figures, a hundred or so individualized calls with analysts and investors were requested throughout the year. Acerinox also complements market information with quarterly open-access conference calls that can be joined by phone and/or online. During 2023, an average of 147 participants were recorded at the results presentations.\n\nAmong the most significant issues discussed were interest in the evolution of markets by region, possible corporate operations (mergers and acquisitions), the decarbonization plan, and capital allocation policies.\n\n#### **Capital Markets Day**\n\nOn November 29 and 30, Acerinox celebrated Capital Markets Day in Germany.\n\nThis provided a unique opportunity to showcase the high-performance alloys business and see first-hand the foresight of the acquisition of this division, VDM Metals.\n\nAcerinox executives updated the Company's situation and explained its future mission: to be a world leader in the manufacture of stainless steel and high-performance alloys by creating the most efficient materials for the future, maximizing the benefits for society and creating value for stakeholders.\n\nAmong the topics discussed, Acerinox's CEO introduced a new path for a new world and presented the Group as a creator of solutions for each application, thus contributing to the progress and quality of life of a sustainable society. In addition, the following presentations were given:\n\n- \"Facing tomorrow's challenges,\" by our strategy director, Antonio Gayo.\n- \"Deep dive into high-performance alloys,\" by VDM Metals CEO Niclas Müller.\n- \"Stainless steel and HPAs: Materials of the future,\" by Senior VP R&D VDM Metals International Helena Alves.\n- \"Achieving excellence in all plants,\" by Acerinox COO Hans Helmrich.\n- \"Sustainability: It's our nature,\" by our indirect purchasing director Deniza Puce and our sustainability director Carlos Ruiz.\n- \"From global to local,\" by the head of Business Intelligence, Manuel Landeta\n- \"Acerinox: A sustainable investment,\" by the Group's CFO, Miguel Ferrandis.\n\nImage /page/176/Picture/19 description: A conference room is shown with a stage and podium. The stage has a large screen with the word \"ACERINOX\" on it. There are water bottles and flowers on the table in front of the stage. The room is lit with blue lights.\n\nCapital Markets Day included a guided tour of the Unna (Germany) factory facilities.\n\nThis successful event enabled 90 attendees to meet in person and more than 500 participants to tune in virtually.\n\nImage /page/176/Figure/22 description: The image shows a close-up of several parallel, angled, metallic or gray-toned bars or panels. The bars are arranged diagonally across the frame, with alternating light and dark shades creating a sense of depth and texture. The lighting appears to be diffused, highlighting the smooth surfaces of the bars. A small portion of a solid purple rectangle is visible in the lower-left corner of the image.\n\n{177}------------------------------------------------\n\nImage /page/177/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, leaving a small gap at the top right. The word \"ACERINOX\" is in white, contrasting with the blue background of the circle.\n\n#### **Share price performance**\n\nEvolution in the stock markets in 2023 was marked by different milestones in each of the regions where episodes of high volatility took place:\n\n- The uncertainty generated throughout the year by the complexity of the geopolitical environment and the conflict in Ukraine has been compounded by the situation in the Middle East.\n- The banking crisis in March (Silicon Valley Bank) shook the US financial system and had repercussions in Europe, with the collapse of internationally recognized institutions (Credit Suisse).\n- The rate hikes that began in 2022 came to an end in the middle of the year. The last Fed rate increase took place in July, reaching its highest level in 22 years (5.25%-5.5%). In Europe, increases slowed in September, reaching their highest level since 2001 (4.5%).\n\nDespite geopolitical uncertainty and adverse circumstances, most stock exchanges ended the year with gains.\n\nPerformance of the world's main indexes in 2023:\n\n|                  | 2023   |\n|------------------|--------|\n| IBEX 35          | 22.8%  |\n| Industrial DJ    | 14.0%  |\n| Nikkei           | 28.2%  |\n| France CAC 40    | 17.0%  |\n| Euro STOXX 50    | 19.2%  |\n| Germany DAX      | 20.3%  |\n| Ftse MIB         | 28.0%  |\n| CSI 300          | -11.4% |\n| S&P 100          | 31.0%  |\n| NASDAQ-100 Index | 54.0%  |\n\nImage /page/177/Picture/10 description: The image shows a low-angle view of several modern skyscrapers against a light blue sky. The buildings are primarily constructed of glass and steel, with a grid-like pattern of windows visible on their facades. Some windows are illuminated, suggesting it is either dusk or dawn. The composition emphasizes the height and scale of the buildings, creating a sense of urban grandeur.\n\nSource: Bloomberg\n\nThe Acerinox share reached a high of EUR 10.7/share on December 28 and a low of EUR 8.8/share on October 23. **Stock market evolution of Acerinox and the IBEX 35**\n\nImage /page/177/Figure/13 description: The image shows a line graph comparing the performance of ACERINOX and IBEX35. The y-axis represents percentage change, ranging from -10% to 30%. The x-axis represents time. The ACERINOX line, in blue, starts at 0%, fluctuates, and ends at approximately +15%. The IBEX35 line, in orange, also starts at 0%, fluctuates, and ends at approximately +23%. A horizontal line at 0% serves as a reference point. The graph indicates that both ACERINOX and IBEX35 have experienced positive growth over the period depicted, with IBEX35 outperforming ACERINOX.\n\nDaily percentage data, 2023. Source: Bloomberg\n\n{178}------------------------------------------------\n\nImage /page/178/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, set inside a blue circle that is open on the left side.\n\n#### **Acerinox rose +15% in 2023, while the IBEX35 went up +23%**\n\nAcerinox's share price performance in 2023, although below the IBEX 35, outstripped its competitors. In a complex year, with a decline in apparent consumption in the US and Europe, the Group was able to generate very positive results thanks to its strategy of offering higher-value-added solutions and the strength of the US plant.\n\n#### **Stock market evolution of Acerinox and its European competitors**\n\nDaily percentage data, 2023. Source: Bloomberg\n\nImage /page/178/Figure/6 description: This image is a line graph comparing the performance of ACERINOX against Competitor 1 and Competitor 2. The y-axis represents percentage values ranging from -30% to 30%, while the x-axis represents time. The orange line represents ACERINOX, the blue line represents Competitor 1, and the gray line represents Competitor 2. The graph shows the fluctuations in performance of each entity over time.\n\nAnalysts' recommendations regarding Acerinox did not change significantly during the year. 85% issued a \"buy\" recommendation at the beginning of the year, as did 81% at the close; 14% of analysts covering the company advised holding and 5% selling.\n\nImage /page/178/Figure/8 description: The image is a horizontal bar chart titled \"Analysts' recommendations\". The chart shows the percentage of analysts who recommend to buy, hold, or sell a stock. 81% of analysts recommend to buy, 14% recommend to hold, and 5% recommend to sell.\n\nThe average target price of analysts following Acerinox was EUR 13.3/share, a potential increase of 25% from EUR 10.7/share at year-end 2023.\n\nIn 2023, Acerinox shares traded on the 255 days the continuous market was in operation. The total number of shares traded amounted to 229,197,103, with average daily trading of 898,812 shares.\n\nIn 2023, trading totaled EUR 2,229,325,733, entailing a daily average of EUR 8,742,454.\n\nImage /page/178/Figure/12 description: The image is a combination bar and line chart comparing the number of shares in millions to cash in millions of euros from 2013 to 2023. The x-axis shows the years 2013, 2015, 2017, 2019, 2021, and 2023. The left y-axis shows the number of shares in millions from 0 to 600. The right y-axis shows the cash in millions of euros from 0 to 6,300. The number of shares in millions for each year is as follows: 2013 is approximately 280, 2015 is approximately 550, 2017 is approximately 400, 2019 is approximately 280, 2021 is approximately 330, and 2023 is approximately 250. The cash in millions of euros for each year is as follows: 2013 is approximately 2,700, 2015 is approximately 6,000, 2017 is approximately 4,800, 2019 is approximately 2,700, 2021 is approximately 3,700, and 2023 is approximately 2,800.\n\n{179}------------------------------------------------\n\nImage /page/179/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a partial blue circle. The circle appears to be incomplete, with the word \"ACERINOX\" placed within the open space of the circle. The color of the text is the same blue as the circle, creating a cohesive and recognizable brand identity.\n\nAt year-end 2023, the Spanish stock market reported a 26% drop in trading volume compared to 2022 and a 15% drop in average daily cash traded (Source: BME Market Report 2023).\n\nAt December 31, 2023, Acerinox's market capitalization was EUR 2,657 million (EUR 2,400 million in 2022).\n\nImage /page/179/Picture/4 description: In the image, a worker wearing a hard hat and ear protection is standing in front of a complex network of pipes and machinery. He is holding a tablet in his hands and appears to be interacting with the screen. The worker is wearing a dark blue uniform with a light-colored stripe on the shoulder. The pipes and machinery in the background are various sizes and colors, and they create a sense of depth and complexity. The lighting in the image is somewhat dim, which adds to the industrial atmosphere.\n\n#### **Market capitalization of Acerinox, S.A.**\n\nImage /page/179/Figure/6 description: The image is a line graph showing market capitalization in EUR million from 2009 to 2023. The y-axis ranges from 0 to 5000 in increments of 2500. The x-axis shows the years 2009, 2011, 2013, 2015, 2017, 2019, 2021, and 2023.\n\n## **4.5 Shareholder remuneration**\n\nIn 2023, Acerinox shareholders received EUR 150 million in dividends. The Annual Shareholders' Meeting also approved the redemption of 10,388,974 treasury shares held as part of the buyback program approved by the board of directors on July 27, 2022 (carried out from August 1 to October 26, 2022).\n\n#### **Dividend payment**\n\nAs established in the dividend policy approved by the board of directors in December 2022, an interim dividend of EUR 0.30 gross per share was paid for 2022 to shareholders on January 27, 2023.\n\nIn addition, following approval by the 2023 Annual Shareholders' Meeting, a supplementary dividend of EUR 0.30 gross per share for 2022 was paid on July 17. The total paid to shareholders in 2023 was consequently EUR 0.60 gross per share, 20% higher than the 2022 dividend.\n\nThe board meeting of December 20, 2023, resolved to propose to the next Annual Shareholders' Meeting a total remuneration for 2024 of EUR 0.62 gross per share, 3.3% more than the previous year:\n\n- Interim dividend for 2023 of EUR 0.31 gross per share, paid in January 26, 2024.\n- Supplementary dividend of EUR 0.31 gross per share to be paid in July.\n\n#### **Shareholder remuneration policy**\n\nThe purpose of the dividend policy, approved by the board of directors in December 2022, is to establish the essential principles that will govern the shareholder compensation agreements submitted by the board of directors to the Acerinox Annual Shareholders' Meeting for approval, connecting shareholder compensation to the Group's financial results.\n\nProposals for shareholder compensation must be sustainable and compatible with the maintenance of financial soundness.\n\nProvided that market conditions, the Group's earnings performance, and net debt does not exceed 1.2x the average EBITDA for the cycle permit, the board of directors may resolve to provide extraordinary shareholder remuneration through share buyback plans or the payment of extraordinary dividends pursuant to authorization at the Annual Shareholders' Meeting.\n\nAs a general rule, the dividend will be paid in two tranches:\n\n- A payment on account in January.\n- A supplementary payment in July.\n\nThis policy may be revised when there are significant and tangible organic and/or inorganic investments in the short term or when conditions so advise.\n\n{180}------------------------------------------------\n\nImage /page/180/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, positioned inside a blue circle. The circle is not fully closed, with a gap at the top right, giving it a crescent shape.\n\n## **4.6 European taxonomy on sustainable finance**\n\nThe European taxonomy is part of the European Commission's action plan for financing sustainable growth, which aims to redirect capital flows to sustainable activities. To achieve this, a common language and a clear definition of \"sustainable\" are needed. To this end, the European taxonomy was created, and a common classification system for sustainable economic activities was established.\n\nIn June 2020, European Union Regulation 2020/852 was approved, establishing the criteria for determining whether or not an investment can be classified as sustainable. The aforementioned European taxonomy regulation established six environmental objectives:\n\n- **1.** Climate change mitigation;\n- **2.** Climate change adaptation;\n- **3.** Sustainable use and protection of water and marine resources;\n- **4.** Transition to a circular economy;\n- **5.** Pollution prevention and control;\n- **6.** Protection and restoration of biodiversity and ecosystems.\n\nSubsequently, the European Union adopted delegated acts supplementing Regulation 2020/852. In December 2021, the delegated act related to climate change mitigation and adaptation objectives was approved, with the delegated act related to the rest of the objectives following in December 2023. The delegated acts set out the technical criteria for substantial contributions to each objective, determine whether an economic activity causes significant harm to the other environmental objectives and establish minimum social safeguards.\n\nIn accordance with Regulation 2020/852, non-financial companies must report on the proportion of their revenue, Capex and Opex associated with sustainable activities to determine whether they comply with the taxonomy regulation.\n\nAcerinox is a specialist in the manufacture and distribution of stainless steel and high-performance alloys with a presence on five continents.\n\nIts production network comprises 13 factories. The Group has six stainless steel factories: four flat product plants (three of which are integral: Acerinox Europa, North American Stainless and Columbus Stainless; and one with cold-rolling: Bahru Stainless) and two long product plants. The other seven (split between the US and Germany) produce high-performance alloys.\n\nThe integrated production process consists of three stages: melting, hot rolling and cold rolling.\n\nDuring the melting process, raw materials (scrap, ferro-alloys and other elements) are melted down to make stainless steel. First, the product is melted in electric arc furnaces, reaching temperatures of 1,600 degrees Celsius. Once melted, it is transferred to the AOD converter, where the alloy is refined. The resulting material is transferred using a ladle to the continuous casting machine, where the slag is removed and the product is refined.\n\nImage /page/180/Picture/17 description: The image shows a low-angle view of several modern skyscrapers. The buildings are primarily constructed of glass and steel, reflecting the sky and surrounding structures. The sky is visible in the background, appearing light and clear. The composition emphasizes the height and scale of the buildings, creating a sense of urban grandeur.\n\n{181}------------------------------------------------\n\nImage /page/181/Picture/1 description: The image contains the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged horizontally within a white circle. A thick, blue crescent shape partially surrounds the circle, creating a visual frame around the text.\n\nSubsequently, in the hot rolling stage, the thickness or diameter is reduced, taking advantage of the higher ductility of the material at high temperatures.\n\nIn the hot rolling mill, the slabs are heated in a walking beam furnace, then pass successively through a roughing mill and a finishing mill, with entry and exit furnaces. Later, steam jets are used to descale and clean the surface. The resulting range of products is finally passed to a coiler that winds them, creating coils.\n\nIn the last stage, cold rolling, the material is subjected to heat treatment, then undergoes a mechanical and chemical process to remove surface oxidation. Acerinox has conducted a comprehensive analysis to assess which of its activities may be eligible under the six objectives of the taxonomy. These potential eligible activities are then cross-referenced with the definitions in the taxonomy to identify the Group's eligible activities.\n\n| The company's<br>activity                                               | Eligible activity                                                            | Eligible and potentially<br>aligned activity                       |\n|-------------------------------------------------------------------------|------------------------------------------------------------------------------|--------------------------------------------------------------------|\n| The activity is identified<br>in Annex I of the<br>Delegated Regulation | Does it contribute<br>substantially to the 6<br>environmental<br>objectives? | Does it adhere to<br>the \"Do no<br>significant harm\"<br>principle? |\n| ELIGIBILITY                                                             |                                                                              | ALIGNMENT                                                          |\n|                                                                         |                                                                              | Does it comply<br>with the<br>minimum social<br>safeguards?        |\n\nAcerinox has an analysis tool that records the data used and the results thereof, serving as a document manager and guaranteeing the traceability of the information.\n\n### **Eligibility**\n\nThe Group has identified potentially eligible economic activities for these environmental objectives.\n\n- **Climate change mitigation:** manufacture of basic iron and steel and ferro-alloys.\n- **Climate change adaptation:** manufacture of basic iron and steel and ferro-alloys; flood risk prevention and protection infrastructure.\n- **Transition to a circular economy:** valorization of hazardous and non-hazardous waste materials, renovation of existing buildings and preparation to reuse products and product components at the ends of their useful lives.\n\nAcerinox also carries out other cross-cutting activities related to its core business that also fall under the objective of climate change mitigation.\n\nOnce potentially eligible activities have been identified, the activities included on the taxonomy list are reviewed. Specifically, this involves those included in the Climate Delegated Act (mitigation and adaptation) and in the Delegated Act for the other objectives (water and marine resources, circular economy, pollution prevention, and biodiversity).\n\nFor this purpose, the precise definition of the activities carried out is reviewed, as well as their correspondence with the statistical classification of economic activities as set out in Regulation (EC) No 1893/2006 (NACE codes\\*). The activities carried out by Acerinox are included in Group C. Manufacturing industry, subgroup 24. Metallurgy: manufacture of iron and steel and of ferro-alloys.\n\nActivities falling under NACE subgroups C24.10, C24.20, C24.31, C24.32, C24.33, C24.34, C24.51 and C24.52 qualify as transitional (eligible) activities under article 10(2) of Regulation (EU) 2020/852 when they meet the technical eligibility criteria.\n\nFor each Group company, the applicable NACE code has been identified and compared with the previous codes. Likewise, an exhaustive analysis of the activities carried out by each Group company is carried out, verifying that these activities comply with the definition provided by the European taxonomy.\n\n{182}------------------------------------------------\n\nImage /page/182/Picture/1 description: The image contains the word \"ACERINOX\" in blue, stacked vertically, and enclosed in a blue circle that is open on the left side.\n\nAccording to this analysis, the infrastructure activities of prevention and protection against related flood risks, valorization of hazardous and non-hazardous waste materials, renovation of existing buildings and preparation to reuse products and product components at the ends of their useful lives that may be considered eligible. However, given the nature of the stainless steel production, which includes both upstream and downstream processes, these activities fall within the production process and are therefore grouped under the climate change mitigation objective.\n\nIn this regard, the company is working on improving the information's granularity level in order to assess whether there are significant adaptation measures to be calculated as part of economic activities linked to the adaptation target.\n\nIn conclusion, the manufacture of basic iron and steel and ferro-alloys (NACE 24.20) linked to the climate change mitigation objective is considered eligible.\n\n| Code | Name of the activity            | Description                                              | Taxonomic target             | Alignment |\n|------|---------------------------------|----------------------------------------------------------|------------------------------|-----------|\n| 3.9  | Iron and steel<br>manufacturing | Manufacture of basic iron and steel<br>and ferro-alloys. | Climate change<br>mitigation | YES       |\n\nThis eligible activity does not include the production of high-performance alloys, nor the production of stainless steel long products.\n\n#### **Alignment**\n\nThe activity, in addition to being eligible, must demonstrate that it meets the requirements set out in article 3 of the regulation, summarized as follows:\n\n- Substantial contribution to one or more of the six EU environmental objectives.\n- It does not cause significant detriment to the other environmental objectives (Do No Significant Harm, DNSH).\n- Compliance with minimum social safeguards.\n\nImage /page/182/Picture/12 description: The image shows the steel framework of a building under construction against a blue sky. The framework consists of vertical steel beams supporting horizontal beams and trusses. The trusses are made of diagonal steel bars that form a triangular pattern. The steel is dark gray or blue-gray in color. The sky is a light blue color with no clouds visible.\n\n{183}------------------------------------------------\n\nImage /page/183/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, enclosed within a blue circle.\n\n#### **Substantial contribution**\n\nIn relation to the climate change mitigation objective, appendices I and II of the Delegated Climate Regulation establish the technical criteria for substantial contribution.\n\nSpecifically, paragraph 3.9 states the following: the activity consists of the manufacture of one of the following products: Steel in electric arc furnaces (EAF) producing EAF carbon steel or EAF high alloy steel as defined in Commission Delegated Regulation (EU) 2019/331 and where the steel scrap input relative to production output is:\n\n- 70% for the production of high alloy steel;\n- 90% for the production of carbon steel.\n\nIn the case of Acerinox, some Group companies were not aligned in this analysis as they are part of the production chain but do not have EAFs in their facilities; therefore, the significant contribution criterion could not be measured. The companies at which the substantial contribution criterion can be measured are Acerinox Europa, NAS and Columbus.\n\nTherefore, in order for these companies' activity to be considered aligned in accordance with activity 3.9, 70% of stainless steel production must come from scrap. The percentage of scrap used at each of the identified companies has been calculated; all three companies exceed the established threshold, reaching scrap usage ratios above 90%.\n\nFollowing the analysis of the substantial contribution criteria for the different eligible activities, the compliance of these activities with the do no significant harm (DNSH) principle, explained below, has been assessed.\n\n### **Compliance with the principle of do no significant harm (DNSH)**\n\nCompliance with the conditions set out to do no significant harm to the other environmental objectives for each of the companies identified was then verified.\n\n#### **Climate change adaptation**\n\nThe Group conducted an analysis of physical and transitional climate risks in the medium and long term (2030 and 2050) with the help of an external consultant. Physical risks were assessed using IPCC climate projections, namely the SSP 1-2.6 (RCP2.6) and SSP 5- 8.5 (RCP8.5) scenarios, for each of the company facilities identified.\n\nThe assessment showed significant risks related to water stress and flooding at some facilities; the Group quantified the financial impacts of the relevant risks there and established climate change adaptation plans. As a result of this analysis, in 2023, the Company implemented adaptation measures to mitigate the impact of the Group's most significant risks. In relation to the risk of flooding, the main equipment was raised to protect it, and the necessary containment and drainage measures were established to channel the water. In relation to the risk of water stress and drought, water consumption efficiency measures have been implemented, and investments have been made in treatment and recovery plants. For the stainless steel division, which includes the companies under analysis, a water withdrawal reduction target was set.\n\nRegarding the risk associated with the development of mechanisms and taxes on carbon emissions, energy efficiency and emissions reduction measures were implemented. Actions were also taken to increase the consumption of renewable electricity. In addition, studies were carried out on the replacement of natural gas consumption with low-carbon fuels (hydrogen and biomethane); and carbon capture, storage and use projects were analyzed. For the stainless steel division, a carbon intensity reduction target was set.\n\nA global climate change adaptation plan will also be implemented by 2024.\n\nImage /page/183/Picture/17 description: The image shows two large, silver pipes running vertically. The pipe on the left has a black arrow pointing downwards, with a symbol above it that looks like a horizontal line with two small squares above and below it. The pipe on the right has a black arrow pointing upwards, with the letter 'H' below it. In the background, there is a tall metal structure with multiple lights on top, and other pipes and industrial equipment can be seen.\n\n{184}------------------------------------------------\n\nImage /page/184/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open on the left side, creating a crescent shape that surrounds the text. The text is black, and the blue circle has a glossy appearance.\n\nImage /page/184/Picture/2 description: The image shows a close-up, low-angle view of a complex network of steel beams and supports, likely part of a building's infrastructure. The beams are arranged in a crisscrossing pattern, creating a sense of depth and complexity. The lighting is somewhat dim, casting shadows that accentuate the geometric shapes and lines of the structure. The overall impression is one of industrial strength and architectural design.\n\n#### **Sustainable use and protection of water and marine resources**\n\nAcerinox Europa, Columbus, and NAS have an integrated environmental authorization and all other legally required permits regarding water pollution prevention, and groundwater and surface water extraction and use. At facilities located in water-stressed areas, improvement actions were set out within the framework of the environmental management objectives.\n\nSection 5.2 Eco-efficiency and climate change mitigation provides further information on this area, specifically in the \"Water stewardship\" section. This includes a case study of the Palmones factory (Acerinox Europa). Appendix 6.2 Supplementary information includes detailed information on water withdrawal, consumption and discharge in areas with and without scarcity.\n\nEnvironmental impact assessments were also carried out at the facilities without identifying any risk of environmental degradation to the bodies of water. In 2023, the water footprint of each Group company was analyzed. For facilities that discharge water into rivers, such as NAS, the gray water footprint has been calculated to estimate the degree of pollution associated with a process step. It was concluded that the concentration of contaminants at the NAS facilities was less than 1,000 mg/l.\n\nIn addition, it was evaluated whether the activity of aligned companies has a negative or hindering impact on seawater. The only company that discharges water into the sea is Acerinox Europa. Water is discharged into the Bay of Algeciras through a general collector managed by the Major Industries Association of Campo de Gibraltar. This discharge is subject to regular analysis in accordance with the Plan for the Monitoring and Control of the Receiving Environment for Discharges into the Bay of Algeciras.\n\nIn the case of Columbus, given that it is located in a water-stressed area, a zero-effluent discharge operation is used.\n\nFinally, NAS has strict measures in place to prevent, avoid and act in the event of spills or discharges resulting from the storage of other substances. The facility has neutralization plants to treat acidic and basic waters, as well as emergency berms to prevent spills into the outside environment and other safety apparatus to eliminate possible spills. The tanks are equipped with a permanent secondary containment mechanism, as well as cleaning and emergency shutdown services. The final effluent water is discharged back into the Ohio River in equal or better condition than it was withdrawn, thus avoiding any possible environmental impact.\n\n#### **Transition to a circular economy**\n\nIn accordance with the specifications established in the European Taxonomy, the iron and steel manufacturing activity has no impact on this objective. Therefore, no additional disclosure is required.\n\n#### **Pollution prevention and control**\n\nAcerinox's activity complies with the emission and discharge limits established in the Best Available Techniques (BAT), as well as with the applicable regulations regarding the presence of hazardous substances in equipment and products.\n\nEach year, the facilities of Acerinox Europa, Columbus, and NAS conduct an assessment of their compliance with environmental legal requirements under the ISO 14001 standard. This standard establishes a specific management procedure through which the organization can monitor the environmental aspects of its activities that may affect the environment in one way or another, either positively or negatively.\n\nLikewise, internal and external ISO14001 certification audits regularly include compliance evaluations for the aforementioned requirements.\n\nAt Acerinox Europa, the Regional Government of Andalusia's technical services team carries out regular legal compliance evaluations as part of their monitoring program for certain facilities.\n\nLikewise, an exhaustive analysis was performed on the products used by Acerinox Europa, Columbus and NAS in their manufacturing and sale processes, in accordance with the specifications established in the taxonomy regulations.\n\nIt concluded that none of the Acerinox Europa, Columbus or NAS facilities manufacture or market organic compounds, substances, or mixtures contained them. The same is the case for substances listed in Article 57 of the REACH Regulation and mercury-added products. Companies take measures to avoid the use of metallic material containing mercury, using the applicable industry BAT. Purchase contracts with suppliers also specify the requirements that the scrap must meet.\n\nThe facilities only use authorized substances with ozone-depleting potential in auxiliary operations, as part of the refrigeration equipment, and in accordance with the operating, maintenance and waste management requirements established in national standards.\n\n{185}------------------------------------------------\n\nImage /page/185/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not fully closed, with a gap on the right side.\n\nThe stainless steel product does not contain elements or substances covered by Directive 2011/65 in quantities exceeding the values indicated in Appendix II, as attested by the Acerinox Europa, Columbus, and NAS Declaration of Restriction of certain Hazardous Substances (RoHS) in electrical and electronic equipment.\n\n#### **Protection and restoration of biodiversity and ecosystems**\n\nAcerinox carries out environmental impact assessments in accordance with applicable regulations.\n\nAcerinox Europa's nearest protected area, the Palmones River Marshes Nature Park, is less than 500 meters away on the northwest side. The protected area's governmental charter (ES6120006) states that in there are several uses in the immediate surroundings of this natural area, among which industrial use stands out, with major industries such as Acerinox, the Los Barrios power plant, and the Palmones I and II industrial estates located nearby. In 2018, the Company conducted an environmental assessment study that took into account Directives 2009/147/EC and 92/43/EEC, among others. The study concluded that Acerinox Europa's activity does not generate any type of impact on any protected area.\n\nOn the other hand, Columbus is located within 50 km of a protected area. Although its activity does not affect said protected area, the company has a biodiversity plan that protects native flora and fauna. In partnership with a local landscaping contractor, it also actively monitors native plant species to avoid possibly altering the local ecosystem.\n\nThe NAS facility is located near a wetland, a protected area administered by the US Army Corps of Engineers. The scope of protection of this agency is not equivalent to the protected areas established in the European Natura 2000 network regulations.\n\nHowever, NAS cannot directly or indirectly affect the wetland without a permit from the US Army Corps of Engineers. Any potential expansion or change in the operating conditions of its activities that may affect the area must include an environmental impact study and permit application.\n\nPreventive measures have been put in place at NAS. For example, we assessed the presence of endangered species in the immediate vicinity to ensure that expanding our activities in the future would not affect protected species. In addition, training activities were carried out for factory personnel so that they are aware of the applicable prohibitions and limits, as was the placement of signs around the borders of the protected area, and access was banned.\n\n#### **Compliance with minimum social safeguards**\n\nAcerinox complies with minimum social safeguards in terms of human rights, corruption and bribery, fair competition, and taxation.\n\nThe Group's global human rights policy is available on the company website and sets out Acerinox's commitments regarding the management of human rights, in accordance with the principles established in the United Nations Universal Declaration of Human Rights, the declaration on fundamental principles and rights at work and its follow-up by the ILO (International Labor Organization), and the Guiding Principles on Business and Human Rights of the United Nations.\n\nAcerinox continues to work on developing a human rights due diligence process by identifying, preventing and mitigating current and potential negative impacts on human rights arising from own, Group, and value-chain activities. No human rights violation reports were received in 2023. For more information, see chapter 5.1 Ethical, responsible and transparent corporate governance, in the section on the human rights due diligence model.\n\nThe Group extends its commitment to sustainability to the entire value chain. Acerinox has a responsible procurement policy, available on the company website, that outlines general principles for purchasing goods and services (including economic, competitive, social, and environmental aspects), and simultaneously defines the Group's objectives and core action framework rolled out in all its companies.\n\nImage /page/185/Picture/15 description: A scenic view of snow-covered mountains under a clear blue sky is captured from behind a metal railing. The mountains are rugged and rocky, with patches of snow clinging to their surfaces. The sky is a deep blue, with a few wispy clouds scattered across it. The metal railing is in the foreground, providing a sense of perspective and depth to the image.\n\n{186}------------------------------------------------\n\nAdditionally, a code of conduct for business partners was established, which defines Acerinox's principles and requirements with respect to its suppliers of goods and services, and vis-à-vis intermediaries, advisors and other Group business partners. The aforementioned code is an essential requirement for the establishment of any contractual relationship with Acerinox. The principles and requirements included are based on the Group's code of conduct and good practices, general contracting conditions, general purchasing policy, and other Company corporate policies. In addition, they are aligned with the 10 principles of the Global Compact, ILO, etc.\n\nThe new Group purchasing strategy 2023-2027 is based on three pillars, one of which is specifically related to compliance with ESG standards and the management of risks inherent in the supply chain. This detailed information is available in this section of chapter 5.5 Supply chain and community impact.\n\nRelatedly, the Group's crime prevention program is aimed at eliminating the risk of committing criminal acts, especially those that entail criminal liability for the legal entity, including risks related to corruption and bribery, competition, and so on. This program includes several phases: updating of protocols and monitoring, self-assessment of monitoring, evaluation and certification, and the action and training plan.\n\nIn 2023, AENOR conducted an external audit of the crime prevention program as part of the certification process under UNE 19601: Management system for criminal compliance. For more information, see chapter 5.1 Ethical, responsible and transparent corporate governance, specifically the section on the crime prevention program.\n\nIn addition, as a sign of its commitment to best practices in tax matters, Acerinox is a signatory to the Code of Good Tax Practices, actively participates in the Tax Forum of Large Companies and has voluntarily submitted, for the second consecutive year, a tax transparency report to the Spanish tax agency.\n\nAs a result of this commitment, the Company was awarded the \"T for Transparent 2022\" seal for responsible taxation and good governance by the Haz Foundation.\n\nThe Group publishes its integrated annual report on the company website. The report includes details of its tax contribution in the countries where it operates, as well as the general tax policy. For more information, see chapter 5.1 Ethical, responsible and transparent corporate governance, specifically the responsible taxation section.\n\nImage /page/186/Figure/8 description: The image shows three donut charts, each representing a different category: Turnover, Capex, and Opex. The Turnover chart indicates that 71% is aligned turnover and 29% is non-aligned turnover. The Capex chart shows that 77% is aligned Capex and 23% is non-aligned Capex. The Opex chart shows that 87% is aligned Opex and 13% is non-aligned Opex. The ACERINOX logo is in the upper right corner.\n\nIn appendix 6.3. Taxonomy-related information includes details on the calculation of financial indicators and ratios related to revenue, Capex and Opex.\n\n{187}------------------------------------------------\n\n## **5. Sustainable management model**\n\n**GRI 3-3**\n\nImage /page/187/Picture/3 description: The image shows a low-angle view of a modern building with a glass facade, reflecting the sky and clouds. The building's structure is defined by a grid of dark, possibly black, frames that create a pattern of rectangular windows. To the right of the building, there is a dense cluster of green leaves, suggesting trees or foliage. The sky is visible through the leaves and in the reflections on the glass, with a mix of blue and white clouds. The overall composition is a blend of architectural and natural elements.\n\nAcerinox is committed to best practices in governance and sustainability to contribute to economic and social development. To this end, it has a responsible management model that structures, coordinates and strengthens the activities necessary to make this a reality.\n\nIn order to guide targets and ensure the sustainability of our business, a sustainability committee was created in 2020 within the board of directors. The Sustainability Director, a direct report of the CEO, reports to the Sustainability Committee. Their purpose is to supervise and promote actions related to the Group's commitment to sustainability.\n\nAcerinox has a regulatory framework with a sustainability policy and a suite of complementary policies laying out the commitments and procedures in a slew of areas, such as risk management, climate change mitigation, defense of human rights, equality, diversity, inclusion, and responsible procurement. These are all available on the company website.\n\nFor the deployment and implementation of our commitment to sustainability, the company has a sustainability plan, Positive Impact 360º, which responds to the ESG risks and materiality analysis, identifies the levers of value generation, and establishes long-term objectives to make this a reality.\n\nPositive Impact 360º sets out the Group's main environmental, social and corporate governance initiatives. This multi-year plan is implemented through annual sustainability programs defined and agreed with the Group's different areas and factories. These programs are a legitimate tool for achieving continuous improvement in responsible execution.\n\nIn 2023, Acerinox worked hard to make progress in the systematization of sustainability management, through procedures that implement the policies and enable better performance of duties, such as the assessment of ESG criteria in the supply chain, management of climate change risks, and transparent reporting of related information. The sections below expound upon the most relevant activities in these areas.\n\n## **Materiality analysis**\n\n#### **GRI 2-29 / 3-1 / 3-2 / 3-3**\n\nIn 2022 the Acerinox Group reviewed and updated the material issues. This analysis process made it possible to identify risks and opportunities, and to better understand the needs and expectations of key stakeholders. To this end, Acerinox consulted customers, shareholders, employees, financial backers, and suppliers, among others, in order to prioritize the most important issues and learn more about these stakeholders' level of satisfaction with the Group's performance. The consultation process included online questionnaires and one-on-one interviews with over 500 professionals, with a response rate of 50%.\n\nThe most relevant issues for stakeholders were health and safety, product safety and sustainability, supply chain, ethics and compliance, and circular economy. The Group was well rated across all aspects, particularly in product safety and sustainability, circular economy, financial management, and supply chain.\n\nAcerinox also performed specific analysis to review ESG risks, i.e. those associated to environmental, social and corporate governance matters, following the same methodology as that applied in the corporate risk management model. This analysis revealed the most relevant risks to be those related to health and safety and the Company's decarbonization.\n\nPhysical risks and transition risks related to climate change were identified as emerging or long-term risks (see detailed information in chapter 5.2 Eco-efficiency and climate change mitigation).\n\nBased on this information and other external sources, material issues were prioritized. Shown below is the materiality matrix approved by the board of directors' Sustainability Committee.\n\n{188}------------------------------------------------\n\nImage /page/188/Figure/1 description: The image is a scatter plot with the x-axis labeled \"Significance to stakeholders\" and the y-axis labeled \"Significance of impact on Acerinox\". Both axes range from 5.0 to 10.0. The plot is divided into three regions: \"Moderate\", \"High\", and \"Critical\", with \"Moderate\" being the lowest risk and \"Critical\" being the highest. There are 12 data points plotted on the graph, labeled 1 through 12. Data points 1, 2, 3, and 4 are in the \"Critical\" region. Data points 5, 6, 7, and 8 are in the \"High\" region. Data points 9, 10, 11, and 12 are in the \"Moderate\" region.\n\n- 1. Health and safety\n- 2. Circular economy and waste management\n- 3. Efficient financial management\n- 4. Decarbonization strategy\n- 5. Leadership, transparency and ethical behavior\n- 6. Supply chain management\n- 7. Environmental risk management\n- 8. Sustainable and safe products\n- 9. Talent management: diversity, equality, and inclusion\n- 10. Digitalization and new technologies\n- 11. Positive working environment Training and professional development\n- 12. Social contribution\n\n**Acerinox is conducting a double materiality analysis in order to identify what is relevant to the company, as well as the Group's material impact on people and the planet. The study is preceded by an analysis of the global context and industry trends.**\n\nImage /page/188/Picture/15 description: This image shows a long bridge over water. The bridge is supported by tall concrete pillars that are evenly spaced along its length. The bridge has two tall towers in the middle, with cables extending from the towers to the bridge deck. The water is calm and reflects the sky, which is overcast. The bridge appears to be a major transportation route, as there are cars visible on the bridge deck.\n\n{189}------------------------------------------------\n\nImage /page/189/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters. The text is partially enclosed within a blue circle.\n\n### **Stakeholder management**\n\n#### **GRI 2-29**\n\nThe Acerinox Group is aware of the importance of maintaining responsible relationships with stakeholders in order to create shared value. Therefore, in 2022, the company approved the stakeholder management model; its main objective is to prioritize the aforementioned groups, as well as to identify their needs and expectations around the company's performance.\n\nAcerinox considers the following six stakeholders to be priorities:\n\nImage /page/189/Figure/6 description: The image shows a list of stakeholders. The list includes employees, shareholders and investors, suppliers, local communities, customers, public agencies, and civil society. Below the list is the text 'Communication and continuous dialogue'.\n\nCommunication and continuous dialogue are the basis of the relationship Acerinox maintains with its stakeholders. The Company offers opportunities for constant dialogue to build trusting, stable, and lasting relationships. It also regularly evaluates stakeholder satisfaction, making any necessary improvements to its commitments in order to meet their needs.\n\nImage /page/189/Picture/8 description: A low-angle shot captures a modern building with a glass facade, partially obscured by lush green trees. The building's design features a grid-like pattern of windows, reflecting the sky and clouds, creating a sense of transparency and openness. The trees, with their vibrant green foliage, add a natural element to the urban landscape, softening the building's sharp lines and creating a harmonious contrast between nature and architecture. The overall composition of the image is visually appealing, with the building and trees complementing each other in terms of color, texture, and form.\n\n#### **Positive Impact 360º plan**\n\nThe Group reviewed its sustainability management model in order to foster continuous improvement in all material issues. To this end, the **Positive Impact 360º Sustainability Plan** is implemented through annual programs, the most relevant actions of which are explained in the following sections of this report.\n\nThe Sustainability Plan is structured around five strategic pillars:\n\n| Ethical,<br>accountable and<br>transparent                                                                                                                                                                                                               | Eco-efficiency and<br>climate change<br>mitigation                                                                                                                                                                                            | Circular economy<br>and sustainable<br>products                                                                                                  | Committed team,<br>culture, diversity, and<br>safety                                                                                                                                                                                              | Supply chain and<br>community impact                                                                                                                             |\n|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Promote the<br>development of a<br>responsible and<br>transparent<br>management model<br>and solid corporate<br>governance, with a<br>sustainable and<br>long-term vision,<br>which identifies and<br>proposes responses<br>to new ESG<br>challenges and | Establish<br>commitments and<br>objectives in climate<br>change mitigation<br>and develop an<br>action plan to<br>achieve them that<br>includes energy<br>efficiency measures,<br>which are the<br>bedrock of the<br>climate change<br>model. | Integrate circular<br>economy processes<br>into all operations by<br>driving the<br>development of<br>sustainable and low-<br>emission products. | Strengthen the<br>alignment of people<br>with the values of<br>Acerinox, boosting their<br>commitment to<br>sustainability,<br>promoting equality, the<br>development of talent<br>and the improvement<br>of the climate,<br>guaranteeing safety, | Manage the supply<br>chain responsibly and<br>be a company<br>recognized for its<br>commitment to local<br>society and creating<br>positive community<br>impact. |\n\n{190}------------------------------------------------\n\nImage /page/190/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a metallic blue color. The word is positioned inside a partial circle, also in metallic blue, which curves around the right side of the word. The background is white.\n\n#### **Sustainability objectives**\n\n#### **GRI 305-5**\n\nIn 2020 Acerinox set sustainable goals linked to its environmental, social and corporate governance performance, aligned with Positive Impact 360º, its Sustainability Master Plan, and the main international standards (Paris Agreement, Sustainable Development Goals, etc.).\n\nImage /page/190/Figure/5 description: The image shows a graphic with a series of interconnected circles and curved lines, each associated with a sustainability or social responsibility metric. Starting from the left, the first circle is connected to the text \"20% reduction in CO2 emissions intensity\". The next circle is connected to the text \"7.5% Reduction in energy intensity\". The third circle is connected to the text \"20% Reduction in specific water withdrawal\". The fourth circle is connected to the text \"90% Recycled Material\". The fifth circle is connected to the text \"10% Annual reduction in LTIFR\". The sixth circle is connected to the text \"15% Female employees\".\n\nImage /page/190/Picture/6 description: The image shows a low-angle view of a suspension bridge. The bridge's deck is visible, along with the suspension cables and one of the towers. The sky is overcast, creating a soft, diffused light. The bridge is light gray.\n\n{191}------------------------------------------------\n\nImage /page/191/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, partially obscured by a blue circle. The circle is positioned behind the text, with only the right half visible. The text is white, and the circle is a deep blue color.\n\nProgress in these objectives is as follows:\n\n| Pillar                     | 2030 targets**                                                                 | Degree of progress | 2023 vs 2022 |\n|----------------------------|--------------------------------------------------------------------------------|--------------------|--------------|\n| Image: hand with leaves    | 20% reduction in CO2 emissions intensity<br>(Scopes 1 and 2) compared to 2015. | -11% vs 2015       | -3%          |\n| Image: hand with leaves    | 7.5% reduction in energy intensity<br>compared to 2015                         | 8% vs 2015         | 6%           |\n| Image: hand with leaves    | 20% reduction in water withdrawal<br>intensity compared to 2015                | -18% vs 2015       | -3%          |\n| Image: waste recycle       | 90% waste recycled                                                             | 80%                | 1%           |\n| Image: document with graph | 10% annual reduction in LTIFR                                                  | –                  | -24%         |\n| Image: document with graph | 15% women at the organization                                                  | 13.28%             | 0.37%*       |\n\n\\*Increase in the percentage of women on staff compared to the previous year.\n\n\\*\\*Carbon intensity, energy intensity, water withdrawal intensity and % waste recycled targets were set for the stainless steel division only. In 2024, they will be extended to the Group level.\n\nThe targets are monitored monthly by the sustainability managers at each plant and reviewed by the corporate sustainability team. The evolution of the targets is also reviewed quarterly by the Sustainability Committee, and the necessary measures are taken in each case\n\nThe company has met the targets set for 2023 in accordance with the path set out for the year 2030. It is worth highlighting the effort made in terms of emissions thanks to our commitment to renewable energies, as well as the LTIFR reduction target, which has fallen by 24% in just one year. On the other hand, the energy intensity target was not met due to the drop in production, which had a significant impact on plant efficiency. Acerinox has also decided to extend the 2030 targets established at the stainless division level to the entire Group in 2024, applying similar annual reduction levels to the high-performance-alloys division.\n\nAchievement of some of these sustainability objectives is linked to the variable remuneration of employees, forming part of the short- and long-term incentives of the Group's c-suite and being rolled out across the organization's different areas. The specific objectives linked to variable remuneration for 2024, in line with the 2030 Group roadmap, are as follows:\n\n| Pillar                   | 2024 targets                                            | 2024 vs 2023 |\n|--------------------------|---------------------------------------------------------|--------------|\n| Image: seedling          | Reduction in CO2 emissions intensity (Scopes 1 and 2)   | -1.54%       |\n| Image: recycle           | Increase in recycled waste                              | 4.03%        |\n| Image: chart with people | TIR reduction                                           | -26%         |\n| Image: group of people   | Increase in the percentage of women in the organization | 0.25%*       |\n\n\\*Increase in the percentage of women on staff compared to the previous year\n\n{192}------------------------------------------------\n\nImage /page/192/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The word is positioned to the left of a blue circle that is not fully closed. The circle appears to be behind the text, partially obscuring the letters.\n\n### **Contribution to the 2030 Agenda**\n\nThe 2030 Agenda is a universal call for action by governments, institutions and businesses to end poverty, protect the planet, and improve the lives and future of people through the achievement of 17 Sustainable Development Goals by 2030.\n\nThe private sector plays a key role in this roadmap, making it an opportunity to align business objectives with sustainability. In this respect, Acerinox is firmly committed to helping achieve these global objectives through the manufacture of infinitely recyclable products, such as stainless steel, and through a responsible management model that contributes to protecting the planet, reducing inequality and developing a more prosperous and sustainable world.\n\nThe Group identified the Sustainable Development Goals to which it can make the biggest contribution.\n\nOn September 25, we raised the SDG flag for a more sustainable future to mark the 8th anniversary of the 2030 Agenda. This initiative of the UN Global Compact aims to unite companies, individuals and institutions under the symbolism of a single flag.\n\n#### **\\_Contribution to the SDGs**\n\n| SDGs         | Contribution of stainless steel                                                                                                                                                | Acerinox's 2030 objectives                                                                                                                                                                                                                                                                                       |\n|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Image: SDG 3 | Stainless steel is a hygienic and clean material<br>that is fundamental to development of the food<br>industry and other sectors, such as pharma,<br>medicine, and transport.  | Objective of reducing accidents, setting out<br>specific initiatives to achieve this goal. (For more<br>information, see the Health and safety section in<br>5.4 Committed team, culture, diversity, and<br>safety.)                                                                                             |\n| Image: SDG 5 | The stainless steel industry traditionally has a<br>low representation of women but is working hard<br>to reduce this gender gap.                                              | Objective of having 15% women by 2030, setting<br>out specific initiatives to achieve this goal. (For<br>more information, see the Equality, diversity,<br>and inclusion section in 5.4: Engaged team,<br>culture, diversity, and safety.)                                                                       |\n| Image: SDG 6 | Stainless steel is a hygienic and clean material<br>that is fundamental to development of water<br>pipes and treatment.                                                        | Objective of reducing specific water withdrawal<br>by 2030, setting out specific initiatives to<br>achieve this goal. (For more information, see the<br>Water stewardship section in 5.2 Eco-efficiency<br>and climate change mitigation.)                                                                       |\n| Image: SDG 8 | The stainless steel industry has a significant<br>impact on jobs and the economy, and is<br>fundamental to development of other sectors.                                       | Acerinox employs over 8,000 people and<br>generates an economic value of EUR 6,766<br>million in the form of salaries, taxes, payments<br>to suppliers, etc. (See 1.1 Value creation for<br>further information).                                                                                                |\n| Image: SDG 9 | Stainless steel is a material used in the<br>development of other industries, such as<br>transport, energy, petrochemicals, etc., and in<br>infrastructure, construction, etc. | Acerinox fosters innovation by making<br>investments that improve efficiency through<br>automation, new equipment, new methods, etc.,<br>and/or the development of new products,<br>incorporating sustainability criteria into the<br>investment decisions. (See 2.2 Strategic plan for<br>further information.) |\n\nImage /page/192/Picture/10 description: A group of people are standing on some stairs holding a banner that says \"TOGETHER FOR THE SUSTAINABLE DEVELOPMENT GOALS\".\n\n{193}------------------------------------------------\n\nImage /page/193/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned within a circular shape. The circular shape is formed by two concentric rings, with the word \"ACERINOX\" placed in the center. The logo has a blue color scheme.\n\nImage /page/193/Picture/2 description: The image shows the Sustainable Development Goal 12 icon, which represents \"Responsible Consumption and Production.\" The icon is set against an orange background. The number \"12\" is displayed prominently in white at the top left corner, followed by the text \"RESPONSIBLE CONSUMPTION AND PRODUCTION\" in smaller white font. Below the text, there is a white infinity symbol with an arrow indicating a circular flow, symbolizing the concept of a circular economy and sustainable resource management.\n\nrecyclable material. Its use in different sectors increases circularity, and contributes to a more sustainable economic model.\n\nStainless steel is a very long-lasting and infinitely Acerinox champions the efficient use of available resources and has set 2030 targets for reducing CO2 emission intensity, energy intensity, and specific water withdrawal, putting in place initiatives designed to achieve these goals. To increase circularity, it has also set a waste valorization objective. (See 5.2 Eco-efficiency and climate change mitigation and 5.3 Circular economy and sustainable products for further information.)\n\nImage /page/193/Picture/5 description: The image is a square with a green background. In the upper left corner is the number 13 in white. To the right of the number 13 is the text \"CLIMATE ACTION\" in white. Below the number and text is a white image of an eye. The iris of the eye is a globe.\n\nbasic sectors in the economy, such as transport, infrastructure, industry, etc., and other sectors that foster renewable energy, batteries, fuel cells, etc.\n\nStainless steel contributes to the development of Acerinox has set specific 2030 objectives to reduce its greenhouse gas emissions, such as carbon intensity, putting in place initiatives designed to achieve these goals. Moreover, to improve its adaptation to climate change, it has analyzed the physical and transition risks related to climate change. (See 5.2 Eco-efficiency and climate change mitigation for further information.)\n\nThe Group signed up to the 10 Principles of the United Nations Global Compact and incorporated them into its strategy. This is the framework for the 2030 Agenda that ensures the Company fulfills its basic responsibilities vis-à-vis people and the planet, paving the way for long-term success. This report lays out the most relevant aspects that generate sustainable development, in compliance with the commitment to release an annual Progress Report.\n\nImage /page/193/Picture/9 description: The image shows logos of organizations related to ESG ratings and memberships. On the left, under the title \"Participation in ESG ratings,\" are the logos of S&P Global, Ecovadis, MSCI ESG Ratings, Moody's Analytics, CDP Disclosure Insight Action, ISS ESG, and Morningstar Sustainalytics. On the right, under the title \"Memberships,\" are the logos of UNESID, UN Global Compact, Responsible Steel, EUROFER The European Steel Association, and Climate Action Data Provider Worldsteel.\n\n{194}------------------------------------------------\n\nImage /page/194/Picture/1 description: The image shows the text \"5.1. Ethical, responsible and transparent corporate governance\" in a purple font.\n\n## **Corporate governance**\n\n#### **Good governance practices**\n\n#### **GRI 2-18**\n\nAcerinox adopts best corporate practices in its operations, keeping it ahead of international standards.\n\nCreation and appointment of a lead independent director: George Donald Johnston was elected to this position following the retirement of the previous Chair and the appointment of Carlos Ortega Arias-Paz as new non-executive chairman of Acerinox. Although the chair is a non-executive position, it was decided to create this position because of the benefits it brings.\n\nWhen the Company increased the dividend per share to EUR 0.60, compared to EUR 0.50 in prior years, it also approved a new dividend policy. This explicit policy states the commitments undertaken vis-à-vis shareholders and provides much-needed predictability regarding expected returns in future years.\n\nThe board of directors carries out an annual evaluation of the board and its various committees in order to identify areas for improvement and to approve the measures needed to boost their performance. The resulting improvement plans are periodically monitored and analyzed halfway through and at the end of the year in question. Its usefulness is evidenced by the fact that the ratings improve year after year The 2023 assessment was conducted through external services.\n\nAt the request of the board of directors, the Company has strengthened the area of sustainability in recent years. First, the Sustainability Directorate was created and, subsequently, a specialized committee was set up under the board itself.\n\n## **Significant events after the reporting period**\n\n#### **Acerinox, S.A. closes an agreement to acquire the US company Haynes International**\n\nThe boards of directors of Acerinox, S.A. and Haynes International have agreed that Acerinox Group shall acquire 100% of Haynes International (Haynes), a company listed on the NYSE and headquartered in Indiana (United States) specializing in the special alloys industry.\n\n#### **Interim dividend**\n\nThe board of directors of Acerinox, S.A. held on December 20, 2023, decided to propose to the Annual Shareholders' Meeting a dividend of EUR 0.62 per share charged to 2023 results, of which EUR 0.31 were paid as an interim dividend on January 26, 2024. This dividend will be submitted for approval at the Annual Shareholders' Meeting to be held in 2024.\n\n#### **Acerinox Europa, S.A.U collective bargaining agreement**\n\nAcerinox Europa began the process of renewing the 4th Collective Bargaining Agreement in January 2023. The company is committed to changing its model at this plant in order to stop producing losses and to be able to tackle the strong competition in this market. This transformation will mean regaining productivity through greater staff flexibility and versatility.\n\nGiven this situation, after months of negotiations, a strike began on February 5 at the Campo de Gibraltar facility. The strike is ongoing as of the publication of these results, despite the fact that the company has always expressed its willingness to negotiate.\n\n{195}------------------------------------------------\n\n## **Ethics and compliance**\n\n**GRI 3-3 / 2-15 / 2-16 / 2-25 / 2-26 / 2-27 / 205-2**\n\n## **Ethics and compliance are key to the proper operation of Acerinox Group's business activity.**\n\n#### **\\_Relevant activities**\n\nImage /page/195/Picture/5 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or success. The person is depicted in a simple, linear style, and the podium has three levels, indicating first, second, and third place.\n\nImage /page/195/Picture/6 description: The image shows a winding path leading to a flag. The path is made up of several curves and turns, and it appears to be a route or journey towards a destination represented by the flag.\n\n| Milestones 2023                                                                                                                                                                                                                                     | Challenges 2024                                                                                                         |\n|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|\n| Favorable audit report for the Group's nine companies in<br>Spain to obtain UNE 19601 certification for criminal<br>compliance management systems.                                                                                                  | Complete the implementation process for the Crime<br>Prevention Program at all group companies.                         |\n| Specific training on money laundering, terrorism, criminal<br>groups, fraud, and punishable insolvency.                                                                                                                                             | Implement the Crime Prevention Program at VDM<br>companies.                                                             |\n| Modified the Group's whistleblowing channel per Law<br>2/2003, which transposes the Whistleblowing Directive<br>into Spanish law.                                                                                                                   | Complete the corporate regulation integration process at<br>all the Group's subsidiaries.                               |\n| Created a repository of all Group regulations, called<br>ACERINORM, available to all Group employees.                                                                                                                                               | Provide training in the prevention of harassment and<br>crimes related to the use of digital services and<br>resources. |\n| Reviewed and re-evaluated risks related to the following<br>crimes: harassment, hate speech, discovery and<br>disclosure of secrets, digital sabotage and damage,<br>intellectual and industrial property right infringements,<br>and tax offenses. | Progress in the implementation of the Human Rights due<br>diligence model.                                              |\n|                                                                                                                                                                                                                                                     | Implement smuggling prevention measures, social                                                                         |\n\nsecurity, foreign citizens' rights, investment fraud, and land and urban planning at non-Spanish companies.\n\nImage /page/195/Picture/9 description: The image shows a large stack of metal pipes. The pipes are all the same size and shape, and they are arranged in a haphazard way. The pipes are all silver in color, and they have a smooth, shiny surface. The background is dark and blurry, which helps to focus attention on the pipes.\n\n{196}------------------------------------------------\n\nImage /page/196/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned within a partial blue circle. The circle is open on the right side, creating a crescent shape that curves around the text.\n\n#### **Code of Conduct and Best Practices**\n\nThe current edition of the Group's Code of Conduct and Best Practices, approved by the board of directors in 2016 and accessible on the company website, provides a rule-based guide for professionals across Acerinox's various companies to determine the ethical commitments and responsibilities that should govern their activity at the company.\n\nThe basic principles of the Code of Conduct are implemented through internal policies and instructions. The Code of Conduct Monitoring Committee, which reports to the board of directors through the Audit Committee, supervises compliance with and internal dissemination of the code among employees, interprets it, provides a whistleblowing channel to gather information on compliance, and also controls and supervises the processing of each case and its resolution, in accordance with the internal regulations that regulate it.\n\nViolation of the Code of Conduct could result in disciplinary action, without prejudice to the administrative or criminal sanctions that may apply in accordance with applicable law.\n\n**The Group also has a specific code of conduct for business partners, likewise accessible on the company website, which establishes the duties and commitments of the Group's suppliers. Non-compliance may entail a range of consequences in the contractual relationship with Acerinox.** \n\n#### **Whistleblowing channel**\n\n#### **GRI 2-16**\n\nTo encourage the application of the Code of Conduct, the company has a whistleblowing channel, a communication tool accessible to all Acerinox employees and stakeholders. Its purpose is to report behavior that breaches the Code of Conduct and Best Practices as well as to request advice on the application of the organization's policies and practices for responsible business conduct.\n\nIn 2023, the Group's whistleblowing channel was modified per Law 2/2003 of February 20, 2003, on the protection of persons who report regulatory violations and the fight against corruption. The aforementioned legislation incorporates the Whistleblower Directive into Spanish law.\n\nThis modification to the Acerinox whistleblowing channel required the acquisition of an external whistleblowing hotline (EQS) while keeping its management internal. In addition, the various whistleblowing channels of the Group's companies were unified, and the new rules governing them were approved.\n\nDuring 2023, 27 complaints were received. In 9 cases, breaches of internal regulations or applicable law were found; in the others, no breaches were found. These breaches were committed by third parties (7) and/or by employees or executives of the Group (2). For each complaint substantiated by a breach, mandatory corrective measures and/or sanctions were applied.\n\nCommunication mechanisms of the whistleblowing channel:\n\n#### **Company websites:**\n\n- https://www.acerinox.com/en/accionistas-einversores/gobierno-corporativo/etica-ytransparencia/canal-denuncias/index.html\n- https://www.northamericanstainless.com/governance/\n- https://www.columbus.co.za/\n- https://www.bahrustainless.com/en/Corporate-Responsibility/ethics-and-transparency/\n- https://www.vdm-metals.com/en/company/about-vdmmetals/corporate-responsibility\n\n#### **Telephone numbers**\n\n#### **Post:**\n\n• Calle Santiago de Compostela, 100 (28035) Madrid, Spain.\n\n- Email:\n- canaldedenuncias@acerinox.com\n- whistleblowing@acerinox.com\n\nImage /page/196/Picture/26 description: The image shows a close-up of a modern building's exterior with a geometric design. The structure is made of blue-tinted metal beams that intersect to form a grid-like pattern. Black cables run diagonally across the grid, adding to the geometric complexity. The background is a bright, overcast sky, which provides a stark contrast to the metal and cables. The overall effect is one of modern architecture and engineering.\n\n{197}------------------------------------------------\n\nImage /page/197/Picture/1 description: The image shows the Acerinox logo. The logo is a blue circle with the word \"ACERINOX\" in white letters inside the circle. The letters are arranged in a slightly curved manner to fit the shape of the circle.\n\nThrough these channels, the complainant may request a face-to-face meeting to present their complaint. In this case, it will be recorded and they will be informed of the processing of their personal data in accordance with the applicable legislation.\n\nIf the complaint is received by any other means (e.g. a report to an immediate supervisor), the information shall be forwarded immediately to the whistleblowing channel manager so that it can be processed in accordance with the applicable regulations.\n\n#### **Compliance function**\n\nThe compliance function is made up of the set of actions and entities that prevent and detect the regulatory non-compliance risks that may arise in any business process, promoting a culture of compliance at the Acerinox Group and avoiding, or at least reducing, the risk of sanctions, fines, or reputational damage loss as a result of non-compliance with applicable legislation.\n\nThe Group's companies, management team, and employees act within the framework established by the laws of the countries where they are located, internal rules and the Acerinox Code of Conduct and Good Practices.\n\nThe Group promotes a culture of prevention and zero tolerance for illegal acts, carrying out and implementing monitoring, prevention and compliance activities across all its companies.\n\nThe Compliance Department, which reports directly to the Audit Committee, coordinates the roll-out of the compliance model in all Group companies. This model includes the Crime Prevention Program, aimed at averting the risk of crimes being perpetrated, particularly those entailing criminal liability for the legal entity.\n\nIn 2023, Acerinox took another step down the path of continuous improvement to prevent and mitigate risks by subjecting the Crime Prevention Program to an external audit carried out by AENOR. This was part of the process for obtaining certification under UNE 19601: Management system for criminal compliance, a standard aimed at reducing criminal risk exposure and promoting a culture of crime prevention.\n\n#### **\\_Key indicators**\n\nImage /page/197/Figure/11 description: The image contains the number 27 in a bold, dark blue font. The number is positioned centrally in the image.\n\nInquiries received via the ethical channel\n\nImage /page/197/Picture/13 description: The image shows three numbers: 27, 82%, and 1,971. The numbers are written in a dark blue font.\n\nInquiries resolved\n\nEmployees trained in compliance\n\n#### **Crime prevention program**\n\n#### **GRI 2-15 / 205-2**\n\nThe Acerinox Group's criminal compliance management system is called the \"Crime Prevention Program.\"\n\nIt includes measures designed to identify, evaluate and avoid the commission of crimes in the Group's activities, and is made up of the necessary policies, processes and procedures, in accordance with best practices in this area.\n\nThe program follows the risk management methodology adopted by the Acerinox Group, which has three phases: identification, assessment, and mitigation.\n\nImage /page/197/Picture/20 description: This image shows a modern building with a skyway. The building is made of concrete and has a minimalist design. The skyway is made of metal and has a perforated design. The skyway connects two buildings. The ground is paved with light-colored tiles. The sky is blue and there are some clouds.\n\n{198}------------------------------------------------\n\nImage /page/198/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, partially obscured by a blue circle. The text is white, and the circle is a deep blue color. The circle appears to be positioned behind the text, giving the impression that the text is emerging from within the circle.\n\nThe program is monitored, measured, analyzed, and evaluated in accordance with the \"crime prevention wheel\":\n\n#### **\\_Annual crime prevention wheel**\n\nImage /page/198/Figure/4 description: The image is a circular diagram divided into four quadrants, each representing a phase of a process. The quadrants are labeled with months: \"OCT - DEC\", \"JAN - MAR\", \"APR - JUN\", and \"JUL - SEPT\". Each quadrant contains a description of the activities performed during that phase. The \"OCT - DEC\" quadrant, colored in dark blue, states \"Reassessment of criminal risks. Action and Training Plan\". The \"JAN - MAR\" quadrant, colored in light purple, states \"Updates to processes and controls\". The \"APR - JUN\" quadrant, colored in light purple, states \"Internal assessment of controls\". The \"JUL - SEPT\" quadrant, colored in orange, states \"Assessment and certification\". In the center of the circle, there is a smaller circle divided into four sections labeled \"1\", \"2\", \"3\", and \"4\", with the word \"Phases\" below the numbers.\n\nThe crime prevention wheel includes the following phases:\n\n#### **A. Processes and monitoring update:**\n\nconfirmation of the program's modification to suit the Group's organizational and functional changes.\n\n#### **B. Monitoring self-assessment:**\n\ndispatch of monitoring confirmation surveys to the people both involved in and responsible for monitoring.\n\n#### **C. Evaluation and certification:**\n\nevaluation of criminal risks in light of the survey results; certificates of compliance are prepared and signed.\n\n#### **D. Action and training plan:**\n\ndocumentation of the monitoring, measurement, analysis, and evaluation work, specifying the action plans found and completed/pending training measures.\n\n**In 2023, risks related to the following crimes were reviewed and reevaluated: harassment, discovery and disclosure of secrets, digital sabotage and damage, intellectual and industrial property right infringements, hate speech, and tax offenses.** \n\nNew crime prevention program management software from Diligent has also been put in place.\n\n#### **Training**\n\nThe following training activities took place in 2023:\n\n- General training on the Crime Prevention Program for managers and persons in charge of the various departments of non-Spanish subsidiaries affected by the established crimes, as well as for people both involved in and responsible for monitoring.\n- Online training on money laundering, terrorism, and criminal groups for the 302 Group employees most exposed to this type of crime due to their jobs.\n- Online training on fraud and punishable insolvency for the 290 Group employees most exposed to this type of crime due to their jobs.\n\nBasic training on the Crime Prevention Program and Code of Conduct takes place continually and is provided to new Group hires in Spain.\n\n#### **Internal regulations**\n\nBuilt around the Code of Conduct as a backbone, Acerinox has approved various development rules in the area of compliance:\n\n- Crime prevention model\n- Internal instructions on gifts and invitations\n- Internal instruction on conflicts of interest\n- Internal instruction on bribery prevention\n- Internal instruction on competition\n- Internal instruction on good financial practices\n- Internal instruction on confidentiality\n- Internal instruction on third-party risks\n- Internal instruction on the commission of crimes.\n\nImage /page/198/Picture/33 description: A low-angle shot captures the architectural detail of a modern building with a curved glass facade. The building's design features a sleek, contemporary aesthetic, with the glass panels reflecting the sky and surrounding environment. The curvature of the building adds a dynamic element to the composition, creating a sense of movement and fluidity. The image emphasizes the building's unique design and its integration with the urban landscape.\n\n{199}------------------------------------------------\n\nImage /page/199/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The word is positioned inside a blue circle that is not fully closed at the bottom, giving the impression of a curved line underneath the text.\n\nThe following standards were approved and distributed during 2023:\n\n- **A.** Policy approving the basis of the whistleblowing system of the Acerinox Group, its organic management and the rights and guarantees of the persons concerned.\n- **B.** Procedure for the reporting, handling, and resolution of complaints.\n- **C.** Acerinox Group internal regulations on the purchase of goods and services.\n\nIn addition, a repository of all the Group's regulations, called ACERINORM, has been created and is available to all employees.\n\n#### **Data protection**\n\nThe Group has a data protection model that is adapted to local legal requirements where it is present and guarantees good data governance. The Group periodically assesses compliance in order to design the necessary actions for continuous improvement.\n\nIn 2018, the Group appointed a single Data Protection Officer (hereinafter DPO) for all its companies, supported and advised by the rest of the organization in the performance of their duties. The DPO performs their duties with due regard to the risks associated with processing operations, taking into account the nature, scope, context and purposes of the processing. In accordance with the requirements of German regulations regarding data protection, VDM companies have their own DPO.\n\n**At Acerinox, we are aware of the importance of identifying organizations' responsibilities regarding respect for human rights and awareness of their current impact on the same. To help benefit and support human rights, we joined the Business & Human Rights Accelerator program of the Global Compact, the leading UN initiative in global sustainability.**\n\n#### **Commitment to human rights**\n\nAt Acerinox, we firmly respect human rights. In 2021, the board of directors approved the Human Rights Policy, available on the company website, which sets out the Group's commitments in this respect, in accordance with the principles established in the United Nations Universal Declaration of Human Rights, the Declaration on Fundamental Principles and Rights at Work and its Follow-up Procedure of the ILO (International Labor Organization), and the Guiding Principles on Business and Human Rights of the United Nations.\n\nAcerinox also maintains a firm commitment to the Principles of the Global Compact and the Sustainable Development Goals, the United Nations' frames of reference that are underpinned by various human rights declarations.\n\nThis policy applies to all the companies that make up Acerinox and binds all the governance bodies of the Group and their companies, employees and, as appropriate, the persons or entities that provide services or that supply goods to Group companies.\n\n#### **Human rights due diligence model**\n\nAcerinox is making progress in the development of its human rights due diligence model, supported by preexisting procedures and systems. The model follows the methodology established by the United Nations Guiding Principles on Business and Human Rights. Its goal is to provide the necessary tools to guarantee that human rights are properly protected and respected.\n\nThe due diligence process focuses on identifying, preventing, and mitigating current and potential negative impacts on human rights arising from own and value-chain activities.\n\nImage /page/199/Figure/18 description: The image shows the logos of the UN Global Compact, Business & Human Rights Accelerator, and the Sustainable Development Goals.\n\nImage /page/199/Figure/19 description: The image shows a circular diagram with four elements representing the Acerinox Group's human rights management model. The elements are arranged in a clockwise direction, starting from the top: 1. Commitment, 2. Due diligence, 3. Complaint mechanisms, and 4. Communication. In the center of the diagram is a circle containing the text \"Elements of the Acerinox Group's human rights management model.\"\n\nThe Company takes a continuous-improvement approach to human rights, keeping an up-to-date vision amid major economic and social transformations, including addressing emerging human rights.\n\nNo human rights violation reports were received in 2023.\n\n{200}------------------------------------------------\n\n## **Responsible tax policy**\n\n#### **GRI 3-3 / 201-4 / 203-1 / 203-2 / 207-1 / 207-2 / 207-3 / 207-4**\n\nIn line with our plan to advance with the development of ethical and transparent corporate governance, our firm commitment to sustainability also extends to taxation. Taxes are a fundamental tool for creating long-term sustainable value and now, more than ever, society needs a commitment from enterprises in all tax-related areas.\n\nAcerinox firmly believes in strict adherence to tax legislation in all the countries where we operate, in cooperating with the tax authorities and in tax transparency.\n\nSince its approval in 2011, Acerinox has adhered to the Code of Good Tax Practices and is an active participant in the Tax Forum for Large Companies.\n\nAs a sign of our commitment to best practices in tax matters, collaboration with the tax authorities and transparency, the Group has voluntarily submitted (for the second consecutive year, a tax transparency report to the Spanish tax authorities; it plans to submit it on a recurring basis every year. The purpose of this report is to provide information on certain aspects of the companies' economic activities, ranging from an explanation of the Group's tax strategy approved by the management bodies, its tax contribution, the transfer pricing policies applied by the Group, the degree of consistency with the OECD BEPS principles, an explanation of the most substantial corporate transactions, and the cooperative programs in which the Company participates, among other matters.\n\nAs a result of this commitment, Acerinox was awarded the \"T for Transparent 2022\" seal by the Haz Foundation for its responsible taxation and good governance. This award demonstrates compliance with transparency indicators; Acerinox is one of the only 13 companies to have been awarded this seal, and it is perceived as one of the most transparent companies in the industry.\n\nIn recent years, in its integrated annual report on the website, the Group has published details of its tax contribution in the countries where it operates, as well as the General Tax Policy.\n\nLikewise, Acerinox has been an active party in various procedures in the cooperative field, including its participation in the OECD-backed ICAP program, which began in mid-2019 and concluded in March 2022 with the receipt of letters from the various participating tax administrations; these categorized the transactions examined, in general, as low tax risk. Acerinox also has a bilateral advance pricing agreement (APA) with the Spanish and German tax authorities; signed in 2017, it is now in the renewal process. In addition, it has collaborated with the tax authorities in the resolution of various mutual agreement procedures.\n\nImage /page/200/Picture/10 description: The image shows a building with a unique roof structure. The roof is made of metal and has a triangular pattern. The sky is visible in the background.\n\n#### **\\_Key indicators GRI 201-1**\n\nShareholder remuneration (EUR M)\n\nTaxes paid (EUR M) Staff remuneration (EUR M)\n\nDirect economic value generated (EUR M)\n\n**150 233 637 6,766 6,141 625** Economic value distributed (EUR M)\n\n625\n\nEconomic value retained (EUR M)\n\nThe direct economic value generated includes the Group's revenue, other operating income (excluding extraordinary income), subsidy income, interest income, and proceeds from the sale of fixed assets.\n\nThe economic value distributed includes purchases of commodities and consumables, operating expenses (excluding extraordinary expenses), taxes, personnel expenses, financial interest expenses, payments, dividend payments, purchases of treasury shares, and corporate income tax payments\n\n{201}------------------------------------------------\n\nImage /page/201/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned within a circular shape, also in blue, that appears to be a stylized representation of a ring or orbit. The overall design is simple and corporate, with a focus on the company name.\n\n### **Internal monitoring and oversight framework**\n\n#### **GRI 207-1 / 207-2 / 207-3**\n\nThe Acerinox Group's General Tax Policy forms part of the Group's corporate governance system. It is available on the company website and sets out the principles and good practices for tax management in the Group, with a view to ensuring compliance with applicable tax legislation, adequately coordinating the management of all Group companies, and preventing tax risks and inefficiencies when making business decisions. The tax risk management and internal control framework also falls under the Risk Control and Management Policy, available on the company website. See 3.3 Risk management in this report for details of the management principles.\n\nThe Acerinox Group is aware of this importance of Base Erosion and Profit Shifting(BEPS) principles within its activity, and has therefore developed different internal mechanisms to comply with them. It has put into place various internal mechanisms to ensure compliance with these principles, which include an annual self-assessment of BEPS risks, in accordance with the 19 tax risk indicators established by the OECD. Acerinox considers that its tax policy is compliant with the BEPS principles and actions approved by the OECD and does not carry out any aggressive tax planning for the purpose of: i) shifting profits to entities in countries with low or no taxation, or ii) using complex mechanisms that would erode taxable income.\n\nUnder 'Contribution to the welfare state', the Acerinox Group's Code of Conduct and Good Practices expressly prohibits the incorporation or holding of entities in territories classified as tax havens for the sole purpose of reducing the corporate income tax base. For these purposes, Acerinox considers as tax havens those places listed in Ministry of Finance Order 115/2023 of February 9 or its subsequent amendments.\n\nAcerinox also complies with the legislation in each country where it operates and pays the corresponding taxes as per the regulations in force.\n\n#### **Tax contribution**\n\n#### **GRI 201-1**\n\nThe Acerinox Group endeavors to maximize its financial and corporate profits without affecting the fulfillment of its tax obligations.\n\nThe value generated by Group companies is distributed to the tax authorities through the payment of taxes, to employees through the payment of salaries, to creditors through the payment of interest, and to shareholders through the payment of dividends.\n\nAs a sign of the Group's commitment to comply with its tax obligations in all the countries in which it operates. The following is a breakdown by country of profits earned and corporate income tax paid. All the taxes paid and received by the Acerinox Group in 2023 are also disclosed.\n\nImage /page/201/Figure/13 description: The image shows a low-angle view of a tall bridge pylon against a clear blue sky. The pylon is dark gray and appears to be made of concrete or steel. It tapers slightly as it rises, and there are visible details suggesting a textured surface or segmented construction. To the right of the pylon, a series of parallel cables stretch diagonally across the frame, adding a sense of scale and perspective. The sky is a gradient of light blue, with the sun positioned behind the pylon, creating a bright, diffused glow. The composition emphasizes the height and architectural design of the bridge structure.\n\n{202}------------------------------------------------\n\n#### **GRI 207-4**\n\n| Country                 | Pre-tax income by<br>country | Payment<br>of taxes |\n|-------------------------|------------------------------|---------------------|\n| Spain                   | -157,424                     | -12,157             |\n| USA                     | 766,756                      | 231,791             |\n| South Africa            | -49,799                      | 1,901               |\n| Malaysia                | -208,184                     | 29                  |\n| Canada                  | 5,423                        | -82                 |\n| Mexico                  | 6,057                        | 326                 |\n| Portugal                | 385                          | 335                 |\n| France                  | 1,779                        | 405                 |\n| Germany                 | 201,810                      | -1,544              |\n| Italy                   | 2,675                        | 7,890               |\n| UK                      | 3,057                        | 615                 |\n| Sweden                  | 720                          | 0                   |\n| Switzerland             | -31                          | 0                   |\n| Austria                 | 1,669                        | 372                 |\n| Poland                  | 604                          | 694                 |\n| Chile                   | -1,092                       | -80                 |\n| Argentina               | -402                         | 38                  |\n| Belgium                 | 1,060                        | 213                 |\n| Russia                  | -20                          | 0                   |\n| Turkey                  | 954                          | 125                 |\n| Brazil                  | -4                           | -11                 |\n| Colombia                | -196                         | 0                   |\n| Peru                    | -156                         | 0                   |\n| Australia               | 389                          | 137                 |\n| China                   | 3,221                        | 1,240               |\n| Hong Kong               | 668                          | 6                   |\n| Japan                   | 2,361                        | 974                 |\n| Korea                   | 543                          | -17                 |\n| Singapore               | -71                          | 34                  |\n| India                   | 208                          | 17                  |\n| United Arab<br>Emirates | -4                           | 0                   |\n| Luxembourg              | 2                            | 0                   |\n| Total                   | 582,955                      | 233,251             |\n\nImage /page/202/Picture/3 description: The image shows a close-up of a modern building with a curved roof. The roof is made of many small, rectangular panels, and the sky is visible in the background.\n\nThe results that appear in the table are the aggregate results in each of the jurisdictions and correspond to those recorded under local regulations.\n\nTaxes paid include all payments of income tax to the tax authorities during the year, whether payments on account, settlements of prior years, payments in respect of assessments, or mutual agreements.\n\nThe Group presents detailed information on tax litigation and open inspections in its financial statements (Note 19.5)\n\nIn some countries, legislation requires payments on account to be made on the basis of the profit or loss obtained for the year rather than on the basis of taxable income. These may prove higher than those that would be payable according to the calculation of taxable income.\n\nAs can be seen in the table, the country with the highest corporate income tax contribution is the country in which the Group makes the highest profits (United States).\n\nThe following jurisdictions are likewise notable in this fiscal year due to the difference between reported results and taxes:\n\n- **Spain:** pre-tax income reflects dividends received by the Group's parent. An exemption of 95% is applicable to these as said parent files taxes in the home country. This fiscal year, the excess payments on account made in 2021 and 2022 were also collected.\n- **Germany:** pre-tax income also includes dividends received by entities of the VDM subgroup, which hold stakes in other entities. On the other hand, tax legislation allows different measurement criteria to be used for certain assets and liabilities, such as inventories or pension plans, which gives rise to temporary differences between accounting profit and taxable income.\n- **Italy:** this fiscal year, agreements with the tax authorities for certain pending litigations relating to the years 2007 to 2013 have been met. In addition, the payments on account are determined based on the tax results from the previous year.\n- **Canada:** outstanding sums from previous years have been received from mutual agreement procedures with other countries.\n\n{203}------------------------------------------------\n\nImage /page/203/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, with a gap at the bottom, giving the impression of a ring. The text is in a lighter color, possibly white or a very light shade of blue, contrasting with the darker blue of the circle.\n\nIn the remaining countries the profit obtained in each jurisdiction is in line with the amount of income tax paid.\n\nThe methodology used to determine the total tax contribution (TTC) measures the Group's payments to the different tax authorities.\n\nThis methodology generally allocates taxes paid and taxes received to each fiscal year on a cash basis.\n\n- **Taxes paid** are those that entail a cost for the Group companies, such as income tax, social security payable by the Company, and certain environmental taxes, property taxes, and other local taxes.\n- **Taxes received** are those generated as a result of the Company's economic activity, with no cost to companies other than in their management, such as withholding tax on salaries owing to personal income tax (PIT), other withholdings on dividends or interest, and VAT.\n\n| Taxes paid               | Amount (EUR thousands) | %   |\n|--------------------------|------------------------|-----|\n| Corporate income tax     | 233,251                | 71% |\n| Social security          | 66,860                 | 20% |\n| Other indirect taxes (*) | 17,191                 | 5%  |\n| Local taxes              | 9,697                  | 3%  |\n| Total taxes paid         | 326,999                | 51% |\n\n(\\*) Other indirect taxes include the taxes on electricity, imports, etc.\n\nIn keeping with the OECD's thinking, the analysis of the tax burden took into account the contributions made to social security or similar bodies in other jurisdictions, given that they are mandatory payments that generally account for a significant portion of a state's income and, in light of them being more tax-like than contribution-like, the Group considers them as taxes.\n\n| Taxes received                                      | Amount (EUR thousands) | %   |\n|-----------------------------------------------------|------------------------|-----|\n| Employee personal income tax and<br>social security | 135,663                | 43% |\n| VAT (*)                                             | 153,742                | 49% |\n| Withholdings                                        | 26,978                 | 9%  |\n| Total taxes received                                | 316,382                | 49% |\n\n(\\*) The VAT shown is the net amount of taxes received and paid.\n\nImage /page/203/Figure/12 description: The image shows a low-angle view of two modern buildings against a clear blue sky. The building on the left has a grid-like facade with large, reflective glass windows and dark frames, suggesting a residential or office structure with balconies. The building on the right features a more angular design with gray and white panels, creating a geometric pattern. The contrast between the two buildings highlights different architectural styles, while the blue sky provides a clean and bright backdrop.\n\n{204}------------------------------------------------\n\nImage /page/204/Picture/1 description: The image shows the 2023 integrated annual report of Acerinox. The total tax contribution is EUR 643 M, and the taxes paid are EUR 327 M. There are two pie charts, one showing the total taxes collected and the total taxes paid, and the other showing the breakdown of taxes paid, including corporate income tax, social security, other indirect taxes, and local taxes. The percentages for other indirect taxes and local taxes are 17% and 10%, respectively.\n\n The amount of taxes paid represents 51% of the Group's total tax contribution, as shown in the chart above.\n\nThe Group's pre-tax consolidated profit amounted to EUR 355 million in 2022. Total taxes paid and received amounted to EUR 643 million. This means that global tax contribution was higher than total pre-tax profit.\n\nCompanies do key work as tax collection agents in the framework of their business operations; likewise, they play an essential role as qualified employers, assuming the risk and compliance costs associated with their proper liquidation and timely payment. Although the taxes collected do not represent a cost for the company, they are generated and paid into the public treasury thanks to the economic activity of the business groups. They are significant, both as employment taxes and taxes on products and services\n\n#### **\\_Public subsidies received in 2023**\n\n| Public subsidies received (EUR thousands) | 2023   |\n|-------------------------------------------|--------|\n| R&D                                       | 1,889  |\n| Environment                               | 24,612 |\n| Allocation of CO2 allowances              | 19,113 |\n| Aid related to COVID-19                   | 29     |\n| Training                                  | 273    |\n| Other                                     | 63     |\n| Total                                     | 45,979 |\n\nImage /page/204/Picture/8 description: The image is a logo with a blue square containing a white letter 't' and a white star above the 't'. Below the square are the words 'RESPONSABILIDAD' and 'FISCAL 2022' in blue.\n\n### **Financial Transparency Seal**\n\nAcerinox has been awarded a tax transparency seal by the Haz Foundation, which evaluates the governance system and transparency practices of companies to prevent tax hazards.\n\n{205}------------------------------------------------\n\n## **5.2 Eco-efficiency and climate change mitigation**\n\n## **Climate change mitigation**\n\n**GRI 3-3**\n\n#### **\\_Relevant activities**\n\nImage /page/205/Picture/5 description: The image shows a line drawing of a person standing on a podium with their arms raised in a gesture of victory. The person is drawn with simple lines and has a generic human shape. The podium has three levels, suggesting first, second, and third place. The drawing is in a light purple color and has a clean, minimalist style.\n\n|  |  |   | 1 |\n|--|--|---|---|\n|  |  | 0 |   |\n|  |  |   |   |\n|  |  |   |   |\n|  |  |   |   |\n\n#### **Milestones 2023 Challenges 2024**\n\n| Verification of product carbon footprint per ISO 14067, including scope 1, 2 and 3 for each steel family       | Launch of the ECO ACERINOX range of sustainable products                                 |\n|----------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|\n| Economic quantification of physical and transition climate change risks, in line with the TCFD recommendations | Review of decarbonization targets, taking SBTI into account                              |\n| Increase in the use of renewable energy and contracting of new renewable PPAs                                  | Review of the plan to install photovoltaic renewable energy panels at the various plants |\n| Completion of the CDP Climate questionnaire, obtaining a B score                                               | Review of decarbonization plan and associated investment plan                            |\n\nStainless steel is a very sustainable, long-lasting, and infinitely recyclable material. Despite these positive qualities, the steel industry accounts for a considerable proportion of global industrial emissions. This is due to the intensive use of energy to melt scrap and ferro-alloys in electric arc furnaces to obtain molten material, as well as the use of fossil fuels, such as natural gas, in the heating and melting processes. Reducing emissions in the steel industry is essential to mitigate climate change and meet global targets.\n\nIn this sense, Acerinox committed to decarbonizing its activity by implementing the Positive Impact 360º Sustainability Master Plan. One of its pillars is eco-efficiency and climate change mitigation; it sets the target of a 20% reduction in GHG emissions intensity (Scope 1 and 2) by 2030, using 2015 as the base year.\n\nThe Group has also established a sustainability and climate change policy supported by complementary policies that set out its commitments regarding climate change mitigation.\n\nThe Acerinox climate change management model follows the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), and provides information on governance, strategy, risk, and opportunity management, as well as metrics and targets to mitigate climate change.\n\n| _Key indicators                   |               |                 |                 |\n|-----------------------------------|---------------|-----------------|-----------------|\n| GRI 305-1 / 305-2 / 305-3 / 305-4 |               |                 |                 |\n| 1,092 t CO2e/t steel              | 778,994 tCO2e | 1,483,902 tCO2e | 3,521,612 tCO2e |\n| SCOPE 1+2 / PRODUCTION            | SCOPE 1       | SCOPE 2         | SCOPE 3         |\n\n{206}------------------------------------------------\n\nImage /page/206/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, arranged vertically within a blue circle. The circle is not fully closed, with a gap at the top right, giving the impression of a crescent shape.\n\n### **Climate change governance**\n\n#### **GRI 3-3**\n\nThe board of directors is ultimately responsible for the oversight of the Group's climate change management, to which the sustainability and audit committees report within their spheres of influence.\n\nThe head of sustainability reports to the Sustainability Committee on at least a quarterly basis regarding the primary sustainability initiatives, including climate change mitigation, as well as the metrics and monitoring of the associated goals. The Group has a team dedicated to managing sustainability-related themes at each plant and a corporate sustainability team that works together to coordinate the geographical roll-out of this management model.\n\nThe chief risk officer reports to the Audit Committee at least twice a year on the Group's main risks, including those associated with climate change.\n\n#### **Climate change strategy**\n\n#### **GRI 3-3 / 302-4 / 305-5**\n\nAcerinox established its commitment to climate change mitigation around four pillars:\n\n- **Improving energy efficiency:** through initiatives such as heat recovery boilers and the use of autonomous guided vehicles (AGVs), etc.\n- **Increasing the use of renewable energy:** by entering into PPAs and obtaining renewable energy certifications, as well as through the installation of solar panels for self-supply at the Group's facilities.\n- **Using sustainable fuels:** analysis of the feasibility of replacing natural gas consumption with other carbonneutral fuels, such as biomethane and green hydrogen.\n- **Carbon capture, utilization and storage:** studies into the technical and economic feasibility of capturing a portion of the CO2 produced at the plants.\n\n#### **Management of climate change risks and opportunities**\n\n#### **GRI 201-2**\n\nThe Group's climate risk management is integrated into its corporate risk management.\n\nClimate risks are overseen by the board of directors' Audit Committee, as part of its role to supervise the integrated risk monitoring system. Climate risks are also examined by the board's Sustainability Committee.\n\nTo strengthen their management, in 2023 the Group also analyzed the physical and transition climate change risks using TCFD methodology. The study considered the impact that climate change would have on each of the Group's facilities over two time horizons - 2030 and 2050 - under two climate scenarios. For physical risks, IPCC RCP 2.6 (aligned with the Paris Agreement) and RCP 8.5 (business as usual (BAU)) were taken into account. In the case of transition risks, the International Energy Agency's Stated Policies Scenario (STEPS) and Sustainable Development Scenario (SDS) (aligned with the Paris Agreement) were considered.\n\nThe impact of climate risk on the Group's financial statements is structured into three main areas: analysis of the recoverability of non-financial assets, determination of the useful lives of plants and equipment and credit ratings. Due to the nature of the business, we feel that there is no material impact from climate change risk that would indicate impairment.\n\n**The company has joined the Climate Ambition Accelerator initiative of the Spanish chapter of the UN Global Compact. This program helps companies set quantifiable, science-based emissions reduction targets and develop concrete plans to achieve them. Through this initiative, Spanish companies like Acerinox are expected to become leaders in climate change mitigation.**\n\nImage /page/206/Picture/21 description: The image contains three logos arranged horizontally. On the left is the UN Global Compact logo, featuring a globe encircled by laurel leaves. In the center is the text \"CLIMATE AMBITION ACCELERATOR\" in a simple, sans-serif font. To the right is a circular logo composed of many colorful segments, resembling a stylized flower or sun.\n\nImage /page/206/Picture/22 description: The image shows a close-up of a building's structural support system, featuring white metal beams and glass windows. The beams intersect at various angles, creating a geometric pattern against the bright, white background of the sky visible through the windows. The metal is a light, cool tone, possibly reflecting the sky's color. The overall composition is clean and modern, emphasizing the architectural design and the interplay of light and structure.\n\n{207}------------------------------------------------\n\nImage /page/207/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font. The text is partially obscured by a blue circle that surrounds the right side of the word. The circle is a solid blue color.\n\nThe analysis carried out enabled the Group to identify the following most salient risks and opportunities:\n\n#### **\\_Risks and opportunities**\n\n#### **GRI 201-2**\n\n| Risk                                                                                                   | Type of risk                          | Classification         | Time horizon     | Scenarios          | Potential business impact                                                                                                                                                       | Mitigation and control<br>measures                                                                                                                                                                                                                                                                                                                                       |\n|--------------------------------------------------------------------------------------------------------|---------------------------------------|------------------------|------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Risk of flooding due<br>to very heavy rain<br>and/or rivers<br>bursting their banks                    | Physical -<br>acute                   | Very high*             | 2030 and<br>2050 | RCP 2.6 and<br>8.5 | Interruption of production<br>during flooding due to<br>limited access to the plant                                                                                             | Placing primary equipment<br>at height to avoid it being<br>affected in the event of<br>flooding.<br><br>Putting in place<br>containment and drainage<br>measures to channel flood<br>water.                                                                                                                                                                             |\n| Risk of water stress<br>and drought                                                                    | Physical -<br>chronic                 | High and very<br>high* | 2030 and<br>2050 | RCP 2.6 and<br>8.5 | Limited water supply or<br>interruption of water supply<br>for extended periods of<br>time<br><br>Increased water treatment<br>costs due to the low quality<br>of the resource. | Setting objectives to reduce<br>water consumption<br><br>Implementing water<br>consumption efficiency<br>measures<br><br>Investing in water<br>treatment and recovery<br>plants                                                                                                                                                                                          |\n| Risk associated<br>with the<br>introduction of<br>mechanisms or<br>levies that tax<br>carbon emissions | Transition -<br>political or<br>legal | Moderate and<br>high   | 2030 and<br>2050 | STEPS and SDS      | Direct impact on<br>operations<br><br>Indirect impact on<br>supply chains, involving<br>potential additional<br>operating costs<br>in inputs and energy prices.                 | Setting targets aimed at<br>improving carbon intensity<br><br>Adopting energy efficiency<br>and emissions reduction<br>measures<br><br>Increasing the consumption<br>of renewable electricity<br><br>Looking into replacing<br>natural gas with low-carbon<br>fuels (hydrogen and<br>biomethane)<br><br>Analyzing carbon capture,<br>utilization and storage<br>projects |\n| Changes in<br>customer<br>preferences                                                                  | Transition -<br>market                | Low and<br>moderate    | 2030 and<br>2050 | STEPS and SDS      | Decrease in demand                                                                                                                                                              | Setting of 2030<br>sustainability targets<br><br>Sustainability Master Plan -<br>Positive Impact 360°<br><br>Developing premium<br>products that meet more<br>stringent sustainability<br>criteria                                                                                                                                                                       |\n\n\\*Physical risks include the highest level identified at any of our facilities.\n\n\\*The costs of measures associated with climate risks are quantified and reported in the Capex and Opex related to the climate change mitigation objective established in the European Taxonomy.\n\n{208}------------------------------------------------\n\nImage /page/208/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is slightly angled upwards from left to right. The circle is a thick, dark blue line.\n\n## **\\_Risks and opportunities**\n\n**GRI 201-2**\n\n| Opportunity                                     | Type of opportunity   | Classification | Time horizon  | Scenarios     | Potential business impact                                                                                | Stimulus measures                                                            |\n|-------------------------------------------------|-----------------------|----------------|---------------|---------------|----------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|\n| Increasing demand for more sustainable products | Products and services | High           | 2030 and 2050 | STEPS and SDS | Increased steel demand due to the development of new technologies and products for the energy transition | Setting of 2030 sustainability targets                                       |\n|                                                 |                       |                |               |               |                                                                                                          | Sustainability Master Plan. Positive Impact 360°                             |\n|                                                 |                       |                |               |               |                                                                                                          | Developing premium products that meet more stringent sustainability criteria |\n| Improving energy efficiency                     | Resource efficiency   | Moderate       | 2030 and 2050 | STEPS and SDS | Reduction of environmental impact                                                                        | Setting targets aimed at improving carbon and energy intensity               |\n|                                                 |                       |                |               |               | Reduction of operating costs                                                                             | Adopting energy efficiency and emissions reduction measures                  |\n| Use of renewable or low-carbon energy           | Energy sources        | Moderate       | 2030 and 2050 | STEPS and SDS | Reduced exposure to the future price of fossil fuels                                                     | Setting targets aimed at increasing the consumption of renewable energy      |\n|                                                 |                       |                |               |               | Improving business sustainability                                                                        |                                                                              |\n\n\\_Risks\n\nImage /page/208/Figure/7 description: The image contains two scatter plots. The first scatter plot shows the likelihood and impact of different risks, including \"ESG market risk\" at likelihood 1.0 and impact 4.2, \"Water stress risk\" at likelihood 2.0 and impact 2.0, \"Flooding risk\" at likelihood 1.2 and impact 1.7, and \"Carbon price risk\" at likelihood 4.0 and impact 4.5. The second scatter plot shows the likelihood and opportunity of different factors, including \"Energy Efficiency\" at likelihood 2.8 and opportunity 3.9, \"Increase demand of sustainable products\" at likelihood 3.2 and opportunity 3.0, and \"Use of renewable or low carbon energy\" at likelihood 4.0 and opportunity 1.9.\n\n{209}------------------------------------------------\n\nImage /page/209/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle appears to be incomplete, with the right side open, and it surrounds the text, giving the logo a circular or rounded appearance.\n\n#### **Decarbonization roadmap**\n\nThe Company's goal is to advance in the decarbonization of its business model. Acerinox is working to reduce the amount of CO2 released into the atmosphere and to reduce other polluting gases associated with the steelmaking process in order to achieve a considerable improvement in air quality, reducing its impact on human health and adjacent ecosystems.\n\nTo this end, the Acerinox Group has short- and medium-term initiatives grouped around the following pillars:\n\n- Improving energy efficiency through best available techniques.\n- Promotion of heat recovery systems from process sources.\n- Electrification of systems and vehicle fleet.\n- Increased use of renewable energies, especially renewable electricity.\n- Use of alternative low-carbon fuels (e.g., green hydrogen).\n- Increased use of scrap metal.\n- Increased use of low-carbon raw materials.\n- CO2 capture, storage, and use.\n- Boosting digitalization to improve energy monitoring and management.\n\nThese measures are aligned with the sustainability plan climate change targets for 2030, with 2015 as a baseline. The sustainability managers at each factory monitor them every month together with the corporate sustainability team. The evolution of the targets is reviewed quarterly by the Sustainability Committee, and the necessary measures are taken in each case.\n\nImage /page/209/Picture/15 description: The image shows a logo or heading with two distinct parts. On the left, there is a circular badge-like icon with a star in the center, and ribbons hanging down from the bottom. To the right of this icon, separated by a vertical line, is the text \"FEATURED CASES\" in bold, uppercase letters.\n\n#### **Heat recovery boiler. Palmones**\n\nThe aim of this project is to recover the excess heat generated by electric arc furnaces to generate process steam. Heat recovery is carried out on the hot air (fumes) that pass through the furnace fume exhaust ducts to the filters using air-steam heat exchangers.\n\nImage /page/209/Picture/18 description: A crane is lifting a large piece of industrial equipment. The equipment is made of metal and has a complex structure of pipes, ducts, and platforms. The crane is yellow and has a long boom that extends over the equipment. The background is a large industrial building with metal siding. There are some workers in the lower left corner of the image.\n\n#### **Unna (VDM) forklift fleet electrification**\n\nThe VDM factory in Unna (Germany) undertook an ambitious project to electrify its forklift and heavy transport fleet.\n\nThese electric vehicles replaced internal combustion vehicles that used fossil fuels.\n\nImage /page/209/Picture/22 description: The image shows an industrial setting with a series of large, black containers lined up on a platform. An overhead crane is positioned above the containers, appearing to be in the process of lifting or moving one of them. To the right, there is a red vehicle, possibly a small industrial truck or cart. The background includes industrial equipment, pipes, and a sign with colored lights, suggesting a factory or warehouse environment.\n\n{210}------------------------------------------------\n\nImage /page/210/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the bottom, creating a crescent shape that arches over the text. The blue color of the circle is a deep, saturated hue, providing a strong contrast against the white background. The overall design is clean and modern, conveying a sense of strength and reliability.\n\n#### **Climate change mitigation metrics and targets**\n\n#### **GRI 3-3 / 302-1 / 302-3 / 302-4 / 305-1 / 305-2 / 305-3 / 305-4 / 305-5**\n\nThe targets set by Acerinox demonstrate its commitment to reducing its environmental impact.\n\nThe Company measures progress towards these targets and reports them to the board's Sustainability Committee on a regular basis.\n\nThe Acerinox carbon footprint is certified using ISO 14064 Standard / GHG protocol. In 2021 a significance analysis was carried out regarding the new Scope 3 categories under the ISO 14064-1:2019 standard, the most salient of which were incorporated into the certified footprint.\n\nIn 2023, the Company went a step further and calculated the product carbon footprint of the four stainless steel families used by Acerinox Europa (austenitic, ferritic, martensitic and duplex steel). The product footprint was verified by an external third party. Currently, work is underway to calculate the product carbon footprint for a specific steel.\n\n#### **\\_Table scope 1, 2 and 3 emissions (tCO2e)**\n\n#### **GRI 305-1 / 305-2 / 305-3**\n\n| Emissions      | GHG categories                                                        | Stainless | High-performance alloys |\n|----------------|-----------------------------------------------------------------------|-----------|-------------------------|\n| Direct         | 1.1. Fixed                                                            | 535,105   | 105,712                 |\n|                | 1.2. Mobile                                                           | 6,200     | 596                     |\n|                | 1.3. Process                                                          | 125,211   | 1,046                   |\n|                | 1.4. Fugitive emissions                                               | 5,029     | 95                      |\n| Total direct   |                                                                       | 671,545   | 107,449                 |\n| Indirect       | 2.1. Energy                                                           | 1,454,623 | 29,279                  |\n|                | 3.1. Goods and services purchased                                     | 2,384,151 | 247,079                 |\n|                | 3.2. Capital assets                                                   | 0         | 0                       |\n|                | 3.3. Fuel and energy activities not included<br>in Scope 1 or Scope 2 | 209,256   | 10,126                  |\n|                | 3.4. Upstream transport and distribution                              | 53,809    | 1,073                   |\n|                | 3.5. Waste generated in operations                                    | 284,134   | 0                       |\n|                | 3.6. Business travel                                                  | 1,001     | 0                       |\n|                | 3.7. Transport used on the way to and from<br>work                    | 6,594     | 0                       |\n|                | 3.8. Upstream leased assets                                           | 0         | 0                       |\n|                | 3.9. Downstream transport and distribution                            | 316,509   | 6,814                   |\n|                | 3.10. Processing of sold products                                     | 0         | 0                       |\n|                | 3.11. Use of sold products                                            | 0         | 0                       |\n|                | 3.12. End of useful life treatment of sold<br>products                | 1,039     | 27                      |\n|                | 3.13 Downstream leased assets                                         | 0         | 0                       |\n|                | 3.15. Investments                                                     | 0         | 0                       |\n| Total indirect |                                                                       | 4,711,116 | 294,398                 |\n| Total sum      |                                                                       | 5,382,661 | 401,847                 |\n\n{211}------------------------------------------------\n\nImage /page/211/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle. The text is positioned in the upper left quadrant of the circle.\n\n#### **\\_Scopes 1, 2 and 3 group emissions (tCO2e)**\n\n**GRI 305-1 / 305-2 / 305-3**\n\nImage /page/211/Figure/4 description: The image is a bar chart comparing CO2e emissions in tons for stainless steel and high-performance alloys across the years 2021, 2022, and 2023. The chart breaks down emissions into Scope 1, Scope 2, and Scope 3. For 2021 Stainless steel, Scope 1 emissions are 867,639, Scope 2 emissions are 2,124,209, and Scope 3 emissions are 4,803,641. For 2021 High-performance alloys, Scope 1 emissions are 106,409, Scope 2 emissions are 82,513, and Scope 3 emissions are 388,992. For 2022 Stainless steel, Scope 1 emissions are 768,600, Scope 2 emissions are 1,792,901, and Scope 3 emissions are 4,083,456. For 2022 High-performance alloys, Scope 1 emissions are 103,653, Scope 2 emissions are 86,266, and Scope 3 emissions are 329,489. For 2023 Stainless steel, Scope 1 emissions are 671,545, Scope 2 emissions are 1,454,623, and Scope 3 emissions are 3,256,493. For 2023 High-performance alloys, Scope 1 emissions are 107,449, Scope 2 emissions are 29,279, and Scope 3 emissions are 265,119.\n\n\\*Scope 3 emissions data for the high-performance-alloys division for 2022 have been recalculated due to the increased availability of the data used for the calculation. Additionally, the data for Scope 1 and 2 of the high-performance alloys division and Scope 3 of both divisions in 2023 have been estimated based on information available at the date of publication of the report.\n\nIn 2023, Acerinox's CO2 emissions decreased by almost 20% including scopes 1, 2 and 3. This reduction was similar in the stainless steel division and in the high-performance alloys division. It was mainly based on the increase of the use of renewable energy and the reduction of scope 3 by a lower carbon footprint of raw materials due to better scrap management.\n\n#### **\\_Scopes 1+2+3 group emissions intensity (tCO2e/t steel)**\n\n#### **GRI 305-4**\n\nImage /page/211/Figure/9 description: The image is a bar chart comparing the emission intensity (tons of CO2e/tons) of different materials across three years: 2021, 2022, and 2023. The materials compared are Stainless steel (1+2), Stainless steel (1+2+3), and High-performance alloys (1+2), and High-performance alloys (1+2+3). In 2021, Stainless steel (1+2) has an emission intensity of 1.08, Stainless steel (1+2+3) has an emission intensity of 1.77, High-performance alloys (1+2) has an emission intensity of 2.42, and High-performance alloys (1+2+3) has an emission intensity of 4.88. In 2022, Stainless steel (1+2) has an emission intensity of 1.10, Stainless steel (1+2+3) has an emission intensity of 2.84, High-performance alloys (1+2) has an emission intensity of 2.31, and High-performance alloys (1+2+3) has an emission intensity of 6.31. In 2023, Stainless steel (1+2) has an emission intensity of 1.07, Stainless steel (1+2+3) has an emission intensity of 2.70, High-performance alloys (1+2) has an emission intensity of 1.79, and High-performance alloys (1+2+3) has an emission intensity of 5.27.\n\n{212}------------------------------------------------\n\nIn line with the previous graph showing the Group's emissions, emissions intensity decreased for Scopes 1, 2 and 3 of both the stainless steel and the high-performance alloys division. The Acerinox Group is committed to reducing its carbon footprint. To this end, the Sustainability Master Plan set a target for the stainless steel division of reducing by 20% the intensity of its direct and indirect carbon emissions (Scopes 1 and 2) by 2030 with respect to 2015 levels. This target is linked to the variable compensation of senior management and other management bodies, as well as that of the Company's employees.\n\nAs discussed earlier, the drop in steel production in the latter part of the year had a major bearing on this indicator. Despite this, Acerinox almost achieved the stainless steel division's proposed target for 2023 (1,062), achieving an intensity ratio of 1,065 tCO2e/t steel produced. This improvement is due to the increased use of renewable energy and the optimization of plant operations. The stainless steel division also has sustainable loans linked to the reduction of its carbon footprint; these are tied to a 1% annual reduction in emissions intensity (scope 1+2). The 2023 target was met as the ratio was 1.07, below the target of 1.09 tCO2e/metric ton of production.\n\n#### **\\_CO2 emission intensity target and sustainable loans - Stainless steel division scopes 1+2 (tCO2e/t steel produced)**\n\n#### **GRI 305-4**\n\nImage /page/212/Figure/5 description: The image is a line graph comparing three different targets from 2015 to 2030. The y-axis ranges from 0.60 to 1.40, and the x-axis shows the years 2015, 2021, 2022, 2023, 2024, and 2030. The graph includes three lines: a \"2030 target\" line, a \"Real\" line, and a \"Sustainable loan target\" line. The \"2030 target\" line starts at 1.20 in 2015, decreases to 1.11 in 2021, 1.10 in 2022, 1.07 in 2023, 1.05 in 2024, and ends at 0.95 in 2030. The \"Real\" line starts at 1.09 in 2021, increases to 1.10 in 2022, and decreases to 1.06 in 2023. The \"Sustainable loan target\" line starts at 1.08 in 2021, increases to 1.10 in 2022, decreases to 1.09 in 2023, and ends at 1.08 in 2024.\n\nIn 2022, Acerinox committed to the Science-Based Targets Initiative (SBTi). The Group is reviewing its CO2 emission reduction targets in light of this initiative and the recently published steel industry guidance.\n\nImage /page/212/Picture/7 description: The image shows a close-up of a modern building with glass balconies. The balconies are stacked on top of each other, creating a staggered effect. The glass is reflective, and the concrete is a light gray color. The sky is visible in the background.\n\n{213}------------------------------------------------\n\nImage /page/213/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, blue letters, positioned inside of a blue circle.\n\n#### **Responsible energy management**\n\nThe iron and steel sector requires intensive energy use to melt scrap and ferro-alloys in electric arc furnaces to obtain molten material, as well as the use of fossil fuels such as natural gas in the heating processes. For this reason, Acerinox works to continually improve its production processes, promoting innovation and the development of more efficient, cleaner technologies in steel production, fostering advances in less polluting and more sustainable processes.\n\nOther measures include replacing components in existing equipment, increasing the purchase of energy with guarantees of renewable origin (PPAs and GoOs), switching to LED lighting, replacing fossil fuels with hydrogen, and improving furnaces, burners, and recovery boilers.\n\nIn addition, during 2023, the company worked on the preparation of the new \"Beyond Excellence\" efficiency plan for the next three years (2024-2026). The plan was approved by the board of directors in late 2023.\n\nThe plan consists of six pillars, notably including productivity and automation; efficiency; and decarbonization and the environment. This Plan reinforces the company's commitment to the search for solutions that reduce the environmental impact of its factories.\n\n#### **\\_Group energy consumption (GJ)**\n\nImage /page/213/Figure/14 description: This image is a bar chart titled GRI 302-1, comparing natural gas, diesel, and electricity usage for stainless steel and high-performance alloys in 2021, 2022, and 2023. In 2021, stainless steel used 12,416,327 units of natural gas, 182,558 units of diesel, and 10,797,582 units of electricity. High-performance alloys used 1,124,160 units of natural gas, 12,649 units of diesel, and 653,092 units of electricity. In 2022, stainless steel used 11,008,895 units of natural gas, 190,814 units of diesel, and 9,695,075 units of electricity. High-performance alloys used 1,125,563 units of natural gas, 13,297 units of diesel, and 680,244 units of electricity. In 2023, stainless steel used 9,919,946 units of natural gas, 159,676 units of diesel, and 8,704,437 units of electricity. High-performance alloys used 769,518 units of natural gas, 12,447 units of diesel, and 652,025 units of electricity.\n\nImage /page/213/Picture/9 description: The image shows a close-up of a blue and white structure with a series of parallel lines. The lines are arranged diagonally, creating a pattern of alternating blue and white stripes. In the foreground, there are two thick blue beams that intersect at an angle, adding depth and dimension to the composition. The overall effect is abstract and geometric, with a strong emphasis on line and color.\n\nReducing energy consumption is a key issue for Acerinox. Acerinox has therefore set a target of reducing the stainless steel division's energy intensity by 7.5% by 2030 compared to 2015.\n\nThe achievement of this target has been affected by the drop in production caused by the macroeconomic and political environment.\n\nDuring the last two years, the energy crisis, accentuated by the invasion of Ukraine and the subsequent impact on economies around the world, as well as distributors' high inventory volumes in the wake of strong imports, led to a drop in stainless steel production in the last half of the year. This drop in production had a significant impact on the factories' efficiency, worsening the indicator regarding energy intensity per metric ton of steel produced, although the total volume of emissions decreased due to the increased use of renewable energies.\n\n{214}------------------------------------------------\n\n### **\\_Stainless steel division energy intensity target (GJ/t steel produced)**\n\n**GRI 302-3**\n\nImage /page/214/Figure/3 description: The image is a line graph comparing a 2030 target with real data from 2015 to 2030. The 2030 target line starts at 8.71 in 2015, decreases to 8.43 in 2021, and continues to decrease to 8.36 in 2024, ending at 8.05 in 2030. The real data line starts at 8.45 in 2021, increases to 8.94 in 2022, and peaks at 9.41 in 2023.\n\n**Renewable Energy Certificates**\n\n**GRI 302-1**\n\n## **616,880 MWh**\n\n**+ 117% increase on the previous year**\n\nOne of the most important initiatives in the decarbonization process consists of increasing the consumption of renewable electricity through renewable PPA contracts at our factories, according to the features and opportunities available in the different countries where Acerinox operates. In 2023, renewable electricity accounts for 37% of the Group's electricity consumption, up almost 50%.\n\nThese measures will drive the transformation of the value chain by increasing our plants' resilience, strategic autonomy and energy security.\n\nIncreasing renewable energy sources is one of the targets linked to sustainable financing. Specifically, the Company has committed to improving the renewable electricity intensity ratio of the entire Acerinox Group (stainless steel and highperformance alloys divisions) by 4% per year from 2020.\n\n#### **\\_Group's renewable energy intensity (renewable kWh/t steel produced)**\n\n#### **GRI 302-1**\n\nImage /page/214/Figure/13 description: The image is a line graph comparing the 'Group' and 'Sustainable loan target' from 2021 to 2026. The 'Group' line starts at 263 in 2021, increases to 327 in 2022, and reaches 463 in 2023. The 'Sustainable loan target' line starts at 243 in 2021, increases to 252 in 2022, remains at 263 in 2023, increases to 273 in 2024, then to 284 in 2024, and finally reaches 295 in 2026.\n\nImage /page/214/Picture/14 description: A low-angle shot captures the corner of a modern building with a facade of glass panels and dark frames. The building's design features a stepped structure, with one section slightly receding from the other, creating a layered effect. The glass panels reflect the sky, displaying a gradient of light blue to white, suggesting a clear or slightly overcast day. The dark frames provide a strong contrast to the reflective glass, emphasizing the geometric pattern of the building's exterior. The composition is clean and architectural, highlighting the building's contemporary design and use of glass and metal.\n\n\\*Renewable energy consumption (PPAs + GOs), remaining energy from national energy mix (location-based)\n\n{215}------------------------------------------------\n\nImage /page/215/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, leaving a gap at the bottom right. The word \"ACERINOX\" is also in blue, matching the color of the circle.\n\n#### **Water stewardship**\n\n#### **GRI 3-3 / 303-1 / 303-2 / 303-3 / 303-4 / 303-5**\n\nWater, in addition to being a vital resource for life on this planet, plays a fundamental role in the steel industry.\n\nThe production of stainless steel and high-performance alloys requires a considerable volume of this natural resource, making its availability a key factor for Acerinox. The Company works to achieve efficient and responsible water management through initiatives such as measuring the water footprint and identifying the level of water stress at each facility.\n\nThe Group ensures water quality through internal and external laboratory analyses that provide information and parameters regarding matters like suspended solids, pH, alkalinity, iron, calcium, phosphorus, and aluminum content, among others.\n\nAcerinox identifies SDG 6 \"Clean water and sanitation\" to be one of the main Sustainable Development Goals and recognizes access to water as a human right. In line with this commitment to sustainability, the Company works in partnership with various stakeholders.\n\nAcerinox's commitment in water catchment areas will enable it to devise water sustainability strategies together with local players, such as launching projects involving water replenishment in natural ecosystems, improving water quality, and reusing waste water within catchment areas.\n\nThe Group provides all its employees with fully operational and safely managed WASH (Water Sanitation Hygiene) services at all sites. It also guarantees access to clean water for drinking, washing, and sanitation systems, ensuring staff health and safety.\n\nDuring the last four years, there have been no incidents related to water management.\n\n#### **\\_Key indicators**\n\n**GRI 303-3 / 303-4 / 303-5**\n\nImage /page/215/Picture/13 description: The image shows the number 7,422 in a bold, dark blue font. There is a short, horizontal orange line underneath the number 7.\n\n**7,422 4,876 2,547**\n\nWITHDRAWAL ML\n\nHARGE ML CON\n\nImage /page/215/Picture/17 description: The image shows the words \"WITHDRAWAL ML\", \"DISCHARGE ML\", and \"CONSUMPTION ML\" in a horizontal arrangement.\n\nImage /page/215/Picture/18 description: This is a wide shot of the Oresund Bridge, a combined railway and motorway bridge across the Oresund strait between Denmark and Sweden. The bridge is long and stretches far into the distance, with a series of concrete pillars supporting the roadway. The bridge also has a cable-stayed section with two tall towers. The water is calm and gray, and the sky is overcast.\n\n#### **\\_Relevant activities**\n\nImage /page/215/Picture/20 description: The image shows a stylized icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or achievement. The person and the podium are depicted with simple lines and a light purple color.\n\n| Milestones 2023                                                              | Challenges 2024                                                        |\n|------------------------------------------------------------------------------|------------------------------------------------------------------------|\n| Development of the water footprint model for the<br>stainless steel division | Development of water footprint model for the special<br>alloy division |\n| Completion of CDP Water questionnaire, obtaining a B<br>score                | Implementation of the water management policy                          |\n| Specific water withdrawal objective met                                      | Improvement of water footprint parameter calculation<br>processes      |\n\n{216}------------------------------------------------\n\nImage /page/216/Picture/1 description: The image shows the words \"Water footprint\" in a bold, purple font.\n\nAcerinox calculates its water footprint as a fundamental environmental parameter at all industrial facilities by measuring the volumes of water used and managed in its processes.\n\nThe water footprint model is based on the WFN (Water Footprint Network) methodology, which estimates the blue and gray water footprint of factories.\n\nThe water footprint allows for more precise traceability of different water flows so that facilities can understand their vulnerability to water scarcity and/or water quality decline.\n\nThis is especially significant in the case of facilities located in areas of high or extremely high water stress.\n\nIn parallel, the Group analyzes its facilities' areas of influence; it identifies the level of water stress of these areas based on the World Resources Institute (WRI) and updates the future projections of the hydrographic basins where it operates.\n\nBased on the classifications provided by this tool, Acerinox considers water-stressed areas to be those in which the ratio of total surface or ground water withdrawn per annum for various uses (civil, industrial, agricultural and livestock) and the total available supply of renewable water per annum is high (40-80%) or very high (>80%). The resulting information allows for comparisons to be drawn between the water required for production and availability in the country or catchment area, determines the relevance of the water risks posed in order to adopt appropriate measures, and facilitates dialogue with stakeholders. Each plant is assessed using the most geographically specific data available. This data, drawn from the Aqueduct Water Risk Atlas, currently four out of the 13 municipalities in which the Acerinox plants are located are in regions of high or very high water stress (Spain, South Africa and the US).\n\nThe impact and risk of each facility are unique, based on the local context.\n\nA climate risk analysis was also conducted in 2023, which included the risk of water stress. To assess these long-term risks (2030 and 2050), Acerinox considered the IPCC, RCP 2.6 and RCP 8.5 scenarios (for further information please refer to section 5.2 Eco-efficiency and climate change mitigation).\n\nFacilities at risk of high or extremely high water stress are already implementing water efficiency measures.\n\nThe Group is working from various angles: reducing water used in manufacturing processes; optimizing and making good use of raw and auxiliary materials; and treating and regenerating water for other uses or to be returned to nature. To that end, the reuse of water at the manufacturing plants is fundamental, as is increasing its possible uses, enhancing the processes that use water and tightening controls over water consumption in order to gain greater knowledge.\n\nImage /page/216/Picture/12 description: The image shows a close-up of a modern bridge structure against a clear blue sky. The structure is primarily white and consists of a thick, vertical support with evenly spaced, horizontal cables extending from it. The cables are also white and appear to be made of metal. The vertical support has a unique design with rectangular cutouts along its length, creating a pattern of light and shadow. The angle of the shot is from below, looking upwards, which emphasizes the height and scale of the bridge. The overall composition is clean and architectural, highlighting the geometric shapes and lines of the bridge design.\n\nImage /page/216/Picture/13 description: The image shows a light purple icon of a badge. The badge is round and has a star in the center. There are ribbons hanging from the bottom of the badge.\n\n**FEATURED CASE**\n\n#### **Global Stainless Steel Industry Gold Award in Sustainability. Wastewater reuse. Palmones**\n\nWater is a critical resource in the Group's operations. For this reason, Acerinox Europa is making significant efforts to minimize its water footprint.\n\nIn this area, the Company has made significant improvements in the reuse of wastewater for different uses, such as street cleaning, industrial cleaning with pump trucks and garden watering.\n\nThe first phase of the project achieved very good results, reducing water consumption by 400 cubic meters per week. The emissions generated by the handling and pretreatment of raw materials also fell.\n\n{217}------------------------------------------------\n\nImage /page/217/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in bold, dark blue letters. The word is positioned inside of a dark blue circle that is open on the left side.\n\n#### **Water management efficiency improvement projects. NAS**\n\nIn 2023, several water management efficiency improvement projects were implemented at the NAS plant, resulting in a 3.3% reduction in water withdrawal intensity compared to 2022.\n\nThis significant improvement aids the corporate sustainability target to reduce relative water withdrawal intensity compared to 2015.\n\n#### **Water collection**\n\n#### **GRI 303-3**\n\nEach of the Company's facilities has water withdrawal control and monitoring systems.\n\nVolumes are accounted for daily through flow meters and verified annually by a third party. This monitoring is not only performed for production processes, but also to ensure compliance with water permit requirements.\n\nThe Acerinox Group is keenly aware of the importance of reducing water collection, including a specific KPI in this regard in its Strategic Sustainability Plan. Specifically, the stainless steel division plans to reduce specific water withdrawal by 20% by 2030 (compared to 2015).\n\nIn 2023, the stainless steel division's water withdrawal intensity fell by 3% compared to 2022, reaching the established annual target. The following graph shows the reduction path established for 2030 and the actual performance of this indicator.\n\n#### **\\_Water withdrawal - Stainless Division**\n\n#### **GRI 303-3**\n\nImage /page/217/Figure/13 description: The image is a line graph comparing the target and real water usage in the Stainless Steel Division. The y-axis represents water usage in m3 per ton of steel produced, ranging from 3.00 to 5.00. The x-axis represents years, from 2015 to 2030. The 'Target' line starts at 4.20 in 2015, decreases to 3.86 in 2021, slightly decreases to 3.80 in 2022, decreases to 3.74 in 2023 and remains at 3.74 in 2024, and decreases to 3.34 in 2030. The 'Real' line starts at 4.20 in 2015, decreases to 3.21 in 2021, increases to 3.56 in 2022, and decreases to 3.44 in 2023.\n\nAcerinox records the water collection source used for plant operations. Water volumes are taken from official and verified data and are measured daily by means of flow meters. The Acerinox Group uses various sources, the quality standards of which are certified by the supplier: surface water (main case), production water and third-party water (municipal water providers).\n\nDistribution of total water withdrawn\nby source: 7.422 ML/tons\n\nImage /page/217/Figure/16 description: The image is a donut chart showing the sources of water. Surface water accounts for 85.7%, rainwater accounts for 3.7%, third-party water accounts for 10.5%, and process water accounts for 0.1%.\n\nImage /page/217/Picture/17 description: The image shows a close-up of a modern building facade with a combination of blue vertical panels and white angled panels. The blue panels are arranged in a rhythmic pattern, creating a textured effect. The white panels are positioned at an angle, adding a dynamic element to the composition. The overall impression is one of contemporary architecture with a focus on geometric shapes and contrasting colors.\n\n{218}------------------------------------------------\n\n#### **\\_Water withdrawal - Stainless Division (ML)**\n\n#### **GRI 303-3**\n\n| ML                   | Total |                       |                   | Stainless             |                   | HPAs                  |                   |\n|----------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|\n| 2023                 | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |\n| Surface<br>water     | 6,364 | 3,877                 | 2,487             | 3,557                 | 2,487             | 320                   | 0                 |\n| Groundwater          | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Seawater             | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Process<br>water     | 5     | 5                     | 0                 | 5                     | 0                 | 0                     | 0                 |\n| Third-party<br>water | 782   | 596                   | 186               | 367                   | 186               | 229                   | 0                 |\n| Rainwater            | 271   | 0                     | 271               | 0                     | 271               | 0                     | 0                 |\n| Total                | 7,422 | 4,478                 | 2,944             | 3,929                 | 2,944             | 549                   | 0                 |\n\n#### **Water discharge**\n\n#### **GRI 303-2 / 303-4**\n\nWater discharges are a key environmental indicator for factory operations. Water volumes and water quality are monitored according to local regulatory requirements and process efficiency parameters.\n\nAll factories have treatment and neutralization plants for stabilization and the removal of contaminants prior to discharge. They also have secondary retention systems that prevent accidental spills and allow for effluent recovery.\n\nAll discharges from the facilities are checked regularly to ensure compliance with Emission Limit Values (ELVs) and other legal requirements.\n\n#### **Distribution of total water discharged by source:**\n\nImage /page/218/Figure/10 description: The image is a donut chart showing the percentages of different types of water. Seawater is 23.0%, third-party water is 6.5%, and surface water is 70.5%.\n\n**4,876 ML**\n\n{219}------------------------------------------------\n\nImage /page/219/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a light blue color. The word is partially encircled by a thick, dark blue arc that starts from the top left, curves around the word, and ends at the top right. The arc gives the impression of a globe or a stylized letter \"C\".\n\n#### **\\_Water discharge (ML)**\n\n#### **GRI 303-2 / 303-4**\n\n| ML                   | Total |                       |                   | Stainless             |                   | HPAs                  |                   |\n|----------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|\n| 2023                 | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |\n| Surface<br>water     | 3,440 | 3,440                 | 0                 | 3,439                 | 0                 | 1                     | 0                 |\n| Groundwater          | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Seawater             | 1,121 | 0                     | 1,121             | 0                     | 1,121             | 0                     | 0                 |\n| Third-party<br>water | 315   | 315                   | 0                 | 26                    | 0                 | 289                   | 0                 |\n| Total                | 4,876 | 3,755                 | 1,121             | 3,465                 | 1,121             | 290                   | 0                 |\n\n#### **Responsible use**\n\nResponsible water consumption is one of the fundamental pillars of the Acerinox Group's operations.\n\nManufacturing requires continuous, intensive cooling and water-intensive surface treatment processes.\n\nProcess efficiency and effluent reuse is a fundamental element of the facilities.\n\nThe Group's factories have neutralization plants and wastewater treatment plants (WWTP) that maximize the recirculation of effluents and reduce our water withdrawal intensity.\n\n### **Other environmental aspects**\n\n#### **GRI 305-7**\n\nIn line with climate change mitigation and environmental impact minimization, Acerinox focuses its efforts on improving the efficiency of its operations by monitoring and controlling the emission of pollutants by its processes.\n\n#### **\\_Key indicators**\n\n| 663<br>metric tons | 15<br>metric tons | 191<br>metric tons | 16<br>metric tons |\n|--------------------|-------------------|--------------------|-------------------|\n| NOx                | VOCs              | Particulate matter | SOx               |\n| t                  | 2023<br>Total     | Stainless          | HPAs              |\n| NOx                | 663               | 618                | 45                |\n| VOCs               | 15                | 15                 | 0                 |\n| Particulate matter | 191               | 191                | 0                 |\n| SOx                | 16                | 13                 | 2                 |\n\n{220}------------------------------------------------\n\nImage /page/220/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in blue, with a blue circle surrounding the word. The circle is not complete, with a gap at the top.\n\nImage /page/220/Picture/2 description: A long exposure shot shows a large bridge over water. The bridge is made of gray concrete and has orange arches. The water is calm and reflects the bridge. In the background, there is a city skyline. The sky is overcast and gray.\n\nImage /page/220/Picture/3 description: The image shows a light purple icon of a badge with a star in the center. The badge is round with small dots around the edge. A ribbon hangs down from the bottom of the badge.\n\n## **FEATURED CASE**\n\n#### **Control of particulate emissions. Palmones**\n\nThe Acerinox factory in Palmones (Spain) has implemented various environmental control measures aimed at reducing emissions of particulate matter and dust. Among others, the following stand out:\n\n- Installation of water misters and intensive use of the vacuum sweeper on internal roads\n- Modification of the smoke scrubber dust discharge system into trucks for management (sleeve system), using an airtight tank.\n- Enclosure of aerators in the melting shop, preventing leaks to the outside.\n- Improvements in the efficiency of melting shop fume exhaust systems.\n- New slag treatment plant in an enclosed building with coverage at potential dust generation points.\n\nAll these initiatives have led to a 65% reduction in the number of incidents detected by the immission monitoring system.\n\n### **Biodiversity**\n\n#### **GRI 3-3**\n\nThe Group helps preserve biodiversity by minimizing its environmental impact through increased recycling rates, reduced greenhouse gas emissions and efficient water management.\n\nAcerinox is committed to recycling 90% of its material by 2030. The increased use of scrap decreases the extraction of raw materials, such as ferro-alloys, reducing our land use, water, and air pollution impacts.\n\nThe stainless steel division has also set a target of a 20% reduction in the emissions intensity ratio by 2030 (baseline 2015). To this end, the company has a decarbonization roadmap. These measures contribute to improving the air quality of the ecosystems adjacent to the facilities.\n\nThe stainless steel division set the target of a 20% reduction in water withdrawal intensity by 2030 (baseline 2015). Acerinox implemented best available techniques to optimize the use of recycled water with a view to attaining Zero Waste Status at all its plants (100% reuse of water). Several of the Group's facilities have already implemented zerowaste measures.\n\nAware of the urgency of halting rapid species loss, the Company has undertaken an in-depth review of its commitment to strengthening the preservation of ecological diversity and minimizing its impact on flora and fauna.\n\n{221}------------------------------------------------\n\n## **5.3 Circular economy and sustainable products**\n\n#### **Circular economy**\n\n#### **GRI 3-3 / 306-1 / 306-2**\n\nIn a context of increasingly limited resources, the circular economy plays a crucial role in environmental preservation. Aware of this reality, Acerinox seeks to achieve the highest possible recyclability ratio, positioning itself as a leader in circular economy. In steel production, the Group uses scrap as its main raw material, reaching values of over 90% recycled material in process inputs, depending on the final specifications of the product.\n\nImage /page/221/Figure/5 description: The image shows a diagram of the life cycle of stainless steel. The diagram is circular, with the Acerinox logo in the center. The diagram begins with raw materials, which are transported by truck. The raw materials are then processed into scrap. The scrap is then melted in a melting shop. The molten metal is then hot rolled and cold rolled. The cold rolled metal is then formed into coils. The coils are then used to manufacture household appliances and kitchenware, transport vehicles, industrial equipment, construction materials, and food industry equipment. The diagram also shows that stainless steel is used in energy and environmental technology.\n\nThe Group is working to find more efficient methods to recover, recycle and reuse all kinds of metals and alloys during and at the end of the manufacturing process. The effectiveness and feasibility of each initiative is assessed.\n\nAs a result of the Company's commitment to circular economy, a Group-wide target has been set to recycle 90% of all waste generated by 2030. This target is monitored on a monthly basis by the sustainability managers of each factory and reviewed by the corporate sustainability team. Likewise, the Sustainability Committee monitors this target on a quarterly basis and, if necessary, takes any necessary measures.\n\nIn order to promote sustainable growth and the responsible use of resources, Acerinox has sustainability and responsible purchasing policies, accessible on the company website, which establish the Group's general principles in the procurement of goods and services, production, and distribution.\n\nAcerinox provides customers and other interested parties with Environmental Product Declarations (EPDs), where it offers quantitative, verified information on the environmental impact of different products for transportation, construction, engineering, the food industry, and energy and environmental technology.\n\nThis material, available on the company website, provides detailed information about products' environmental impact and estimate how they affect the life cycle of the structures or solutions being manufactured.\n\n{222}------------------------------------------------\n\n**98**\n\n#### **2023 Integrated Annual Report**\n\n#### **\\_Key indicators**\n\n**GRI 301-2 / 306-4**\n\n## **2,033,855 metric tons 80%**\n\nRaw materials from recycled material Recycled waste\n\nACERINOX participated in the \"First Conference on Circular Economy for Andalusian Industry,\" reaffirming its commitment to the circular economy, a fundamental pillar of the company's strategy to ensure sustainable growth over time.\n\n#### **\\_Relevant activities**\n\nImage /page/222/Picture/8 description: The image shows a light purple icon of a three-tiered structure. The structure has a rectangular base, a smaller rectangular middle tier, and a small rectangular top tier with three vertical lines extending upwards from it.\n\nImage /page/222/Picture/9 description: The image shows a winding path leading to a flag. The path is drawn with a light purple line and consists of several curves and bends. The flag is located at the end of the path, indicating the destination or goal. The path starts from the bottom left corner and ends at the top right corner.\n\n| Milestones 2023                                                                | Challenges 2024                                                                 |\n|--------------------------------------------------------------------------------|---------------------------------------------------------------------------------|\n| Obtaining CE certification for slag from the Algeciras<br>plant (various uses) | R+D+i studies for the valorization of slag in different<br>factories            |\n| Valorization and local uses of waste (slag, neutralization<br>sludge)          | Industrial application of slag as construction aggregate                        |\n| Scrap segregation plan at service centers                                      | Increase the value-added of scrap recovered at factories<br>and service centers |\n\n#### **\\_Raw materials (metric tons)**\n\n#### **GRI 301-1**\n\nThe Company is aware of the environmental impact generated by the extraction of raw materials, including soil degradation, water pollution, and biodiversity loss. For this reason, one of the lines of action of the Group's decarbonization strategy is to reduce the purchase of raw materials by increasing the use of scrap. In addition, the Company has implemented different initiatives such as the improvement of machinery, to minimize losses of the products that are manufactured, or the improvement of the AOD process, to reduce the consumption of chemical components.\n\n## **2,033,855 536,758 276,823 33,969 14,092**\n\n330,\nAlloys\n\n823\n\n33,90\nAcids\n\n9,909\nds\n\nRecycled material\\* Alloys Gases Acids Recycled acid\\*\\*\n\n\\*Recycled material is defined as purchased scrap, process and internal scrap, as well as metal recovered from slag and other recycled waste. \\*\\*Recycled acid: total amount of nitric and hydrofluoric acid recovered.\n\n#### **\\_Waste management**\n\n#### **\\_Waste generated, sorted by type of management and composition**\n\n#### **GRI 306-3 / 306-4 / 306-5**\n\nWaste is managed independently at each factory, complying with the legislative requirements of each location. At all of them, waste is monitored and traced by type using computer programs or internal monitoring. The data is then entered into a global tool for the entire Group, then reviewed and consolidated by the corporate sustainability team.\n\nAt some facilities, annual reports on hazardous and non-hazardous waste are prepared and submitted to the relevant governmental authorities.\n\nAlthough most of the waste generated by the Company is recycled, other waste is also generated for landfill. Landfilled waste is managed by an authorized manager in accordance with the regulations applicable in each country.\n\nImage /page/222/Picture/28 description: The image shows a close-up of several metal rods or pipes arranged diagonally. The rods are shiny and reflect light, creating a pattern of highlights and shadows. The background is blurred, which makes the rods stand out. The rods are all parallel to each other and are evenly spaced.\n\nRecycled\n\nRecycled waste\n\n{223}------------------------------------------------\n\n| t                       | 2023      | %      | 2022      | %      | 2021      | %      |\n|-------------------------|-----------|--------|-----------|--------|-----------|--------|\n| Total waste             | 1,298,793 |        | 1,572,090 |        | 1,669,375 |        |\n| Landfill                | 262,827   | 20.24% | 333,534   | 21.22% | 471,076   | 28.22% |\n| Recycled/<br>Recovered  | 1,035,966 | 79.76% | 1,238,556 | 78.78% | 1,198,299 | 71.78% |\n| Total non-<br>hazardous | 1,182,735 | 91.06% | 1,432,963 | 91.15% | 1,521,645 | 91.15% |\n| Landfill                | 203,578   | 17.21% | 252,595   | 17.63% | 385,541   | 25.34% |\n| Recycled/<br>Recovered  | 979,157   | 82.79% | 1,180,368 | 82.37% | 1,136,104 | 74.66% |\n| Total<br>hazardous      | 116,058   | 8.94%  | 139,127   | 8.85%  | 147,730   | 8.85%  |\n| Landfill                | 59,250    | 51.05% | 80,939    | 58.18% | 85,535    | 57.90% |\n| Recycled/<br>Recovered  | 56,809    | 48.95% | 58,188    | 41.82% | 62,195    | 42.10% |\n\nIn 2023, the Group worked towards the goal of increasing its waste recycling by 2030, employing its best practices at its various factories and managing to recycle almost 80% of the waste generated, increasing the percentage of waste recycled compared to previous years.\n\nImage /page/223/Picture/3 description: The image shows a close-up of a building under construction. The building is made of steel beams and columns, and the beams are connected to the columns with bolts. The steel is painted gray, and the sky is visible through the open framework of the building.\n\nImage /page/223/Figure/5 description: The image is a graph comparing \"Target\" and \"Real\" values over time, from 2021 to 2030. The y-axis represents percentage values, ranging from 25.00% to 100.00%. The \"Target\" values are as follows: 79.20% in 2021, 80.40% in 2022, 81.60% in 2023, 82.80% in 2024, and 90.00% in 2030. The \"Real\" values are: 71.50% in 2021, 78.80% in 2022, and 79.76% in 2023.\n\n{224}------------------------------------------------\n\nImage /page/224/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right.\n\nAcerinox operates by maximizing the use and valorization of generated waste. The Group's production centers have environmental management systems that include the following measures:\n\n- Education and awareness-raising for employees and contractors on environmental impact and waste segregation.\n- Employee training in handling hazardous substances.\n- Segregation, labeling, storage, handling, and transportation of waste and hazardous substances.\n- Stabilization, neutralization, and sedimentation plants for liquid effluents.\n- Heat recovery boilers with combustion, steam generation, and electric power.\n\nImage /page/224/Picture/8 description: The image shows a logo with a badge icon on the left, a vertical line in the middle, and the words \"FEATURED CASES\" on the right. The badge icon is a circle with a star in the center and a ribbon at the bottom. The words \"FEATURED CASES\" are in a bold, sans-serif font.\n\n#### **\"Sludge To Brick\" project. Bahru**\n\nBAHRU shipped 1,071 metric tons of acid neutralization sludge for a waste valorization project that transforms sludge from the neutralization plant into unfired bricks used for ornamental building.\n\nThe \"Sludge to Brick\" project was awarded the Ecological Product label in Malaysia and registered with MyHIJAU Mark, the Malaysian government's official green recognition for environmentally-friendly products and services.\n\n#### **Valorization of WWTP sludge. NAS**\n\nThe NAS plant in Kentucky (US) managed to reduce waste sent to landfills from the WWTP by more than 60%. This sludge was reused as backfill aggregate in mines.\n\nImage /page/224/Picture/14 description: The image shows a close-up of a perforated metal surface. The metal is a light blue-gray color, and it is covered in small, oval-shaped holes. The holes are arranged in a regular pattern, and they are all the same size. The metal surface is slightly curved, and there are some shadows on it. The overall effect is one of texture and pattern.\n\n{225}------------------------------------------------\n\n## **Sustainable solutions**\n\nAcerinox offers a wide variety of efficient and durable solutions for customers who manufacture all kinds of products that are essential in everyday life, products that are a benchmark in economy and that comply with the so-called three Rs rule of sustainability: reduce, reuse, recycle. For this reason, the materials manufactured by the Group stand out for their lower environmental impact, both in their production and in their processes and useful life, as well as for their lower carbon footprint.\n\nImage /page/225/Figure/4 description: The image is an infographic illustrating various applications across different sectors. The sectors include household appliances and kitchenware, energy and environmental technology, the food industry, transport, construction and infrastructure, and industrial equipment and engineering. Each sector is represented by relevant imagery and a list of specific applications or components within that sector. For example, the household appliances and kitchenware sector includes refrigerators, washing machines, microwaves, ovens, kitchen sinks, extractor hoods, catering, and kitchens. The energy and environmental technology sector features power plants, while the food industry includes storage, barrels, food industry, and agri-food. The transport sector lists car, railway, aerial, maritime, and aerospace transport. Construction and infrastructure covers facades, coatings, elevators, structures, climate and heating, swimming pools, and street furniture. Finally, industrial equipment and engineering includes water, energy and petrochemical, batteries, pharmaceutical and medical, and trash and cement.\n\n{226}------------------------------------------------\n\nImage /page/226/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif, blue letters. The text is positioned inside a blue circle that is open on the left side.\n\n#### **Process and product certifications and controls**\n\n#### **GRI 416-1**\n\nIn addition to the legal requirements applicable in each country, all the Group's factories are subject to strict quality and environmental controls. They also have, as a whole, environmental management systems in line with the ISO 14001:2015 standard. Similarly, each subsidiary has established standards that exceed legal requirements in areas such as quality, safety, and the environment.\n\nMoreover, Acerinox undergoes annual external audits of the Group's information systems, both at the Parent and at all subsidiaries. These are carried out both by external entities and by customers.\n\n#### **LINKS**\n\n#### **ACX Europa:**\n\nhttps://acerinox.com/es/acerinox/fabricas/acer inox-europa/certificados-acerinox-europa/\n\n#### **NAS:**\n\nhttps://www.northamericanstainless.com/quali ty/qms-iso/\n\n#### **Roldán:**\n\nhttps://acerinox.com/es/acerinox/fabricas/rold an/certificados-de-roldan/\n\n#### **Inoxfil:**\n\nhttps://acerinox.com/es/acerinox/fabricas/inox fil/certificados-de-inoxfil/\n\n#### **Columbus:**\n\nhttps://www.columbus.co.za/products/certificationmarkings.html\n\n**Bahru:** \n\nhttps://bahrustainless.com/en/products/certification/\n\n#### **VDM Metals:**\n\nhttps://www.vdm-metals.com/es/\n\nImage /page/226/Picture/21 description: The image shows a close-up of a stack of metal bars. The bars are arranged in parallel, with small gaps between them. The bars are made of a dark metal, and they have a rough, textured surface. The bars are stacked on top of each other, and they are slightly offset, creating a staggered effect. The image is well-lit, and the metal bars are in focus.\n\n{227}------------------------------------------------\n\n## **Technological innovation**\n\n#### **Investment in fixed assets**\n\nInvestments made in 2023 in both property, plant, and equipment and intangible assets amounted to EUR 175 million. These investments include both the acquisition and installation of new equipment and recurrent maintenance investments. In many cases, they are investments to improve efficiency and productivity, but they are also of a strategic nature and geared towards sustainability, as they entail reductions in energy consumption.\n\nIn the case of Acerinox Europa, the total sum of investments (including maintenance) amounts to EUR 39 million, related to improvements and expansions made in several production lines.\n\nInvestments made by North American Stainless amount to EUR 73.9 million, of which EUR 21 million correspond to the investment plan approved at the beginning of this year and EUR 27 million to recurring maintenance investments.\n\nIn the case of Columbus Stainless, investments for the year amounted to EUR 21.2 million. Finally, the VDM Group invested EUR 27.2 million over the year.\n\nThe December 2023 board meeting also approved an EUR 67 million investment plan for the high-performance alloys division at its German plants in Unna, Altena and Werdohl, which will enable it to gradually increase its production capacity in precision strips, bars, and wires, as well as lifting sales by 15%. The planned investments include the expansion of three remelting furnaces, the upgrade of an annealing and pickling line, another flaw detection line for bars, and a sprayer for the production of stainless-steel and highperformance-alloy powders for additive manufacturing.\n\n#### **R&D&i**\n\nInnovation is one of Acerinox's corporate values, and a source of improvement in order to compete in a market as globalized and competitive as the stainless steel market.\n\nSince 2021, Acerinox has an innovation and technology committee. Led by the Group's CEO and comprising the heads of various business areas, the aim of this Committee is to review the Company's capabilities, define the R&D&i strategy, provide sufficient funding, identify the risks that could affect the Group's operations and define long-term objectives.\n\nThree work groups were also created, focusing their efforts on the development of materials, improvement of production processes, implementation of new processes, and the promotion of innovation processes, which includes, inter alia, the management of Group patents and push for sustainable processes. Some examples of projects underway in 2023 are related to the use of stainless steel for renewable hydrogen applications.\n\nThis exchange of experiences between the Group's business units is open to the contribution of any employee with the aim of making the most of the extensive know-how of Acerinox staff.\n\nCollaboration with public and private research bodies is essential, since almost half of the investments in this field are carried out in partnership with entities, universities and research centers of this nature.\n\nMore than 40 people in the Group, distributed across different production plants, dedicate their knowledge and efforts to research and development work, without counting the staff who, at the laboratories of each Group plant, work on searching for new alloys and improving the properties of the current ones. During 2023, collaboration on R&D tasks between the different Group units has deepened, resulting in an increase in knowledge generation synergies and an increase in the value-added of our products.\n\nAcerinox also promotes the participation of all employees in this field with the annual Rafael Naranjo Awards, aimed at recognizing workers who have stood out for their innovative projects in the areas of safety, the environment and quality.\n\nImage /page/227/Picture/16 description: The image shows a close-up of a modern building facade with a pattern of vertical metal beams and glass windows. The beams are light gray and run parallel to each other, creating a sense of verticality. The windows are dark blue and reflect the sky, adding depth and contrast to the image. The overall effect is one of sleekness and sophistication.\n\n{228}------------------------------------------------\n\nImage /page/228/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, enclosed within a blue circle that is open on the right side.\n\nProjects in 2023 included the AUSTRONG project, a European project carried out with Italian, Spanish and Finnish entities, which aims to develop a new steel to withstand the most demanding hydrogen working conditions, even in a liquid state. Related to hydrogen, at the national level, the H2 EPA, FORNAX, and HYADES projects, focused on the development of stainless steel for its safe storage and transport and its use as fuel in heating furnaces, should also be highlighted. Also worth mentioning at the national level is the CERES project. Led by Acerinox Europa, this project aims to evaluate the development of a **circular economy** based on mineral waste from iron and steel plants. The project analyzes the main challenges of these materials and their recovery in a safe legal environment that is sustainable in the long term.\n\nIn addition, the \"Materials for the future\" initiative brings together a selection of 20 professionals from various disciplines of the Acerinox Group with representatives from the different factories (Acerinox, NAS, Columbus, Bahru and VDM). The goal of this initiative is to work together on possible scenarios that may arise in the future, anticipating emerging market trends. This promotes both synergies within the Group and the correct alignment with the company's strategy. This program includes specific initial training and a final challenge in which each working group will present the conclusions of their study to management.\n\n### **\\_2023 R&D&i investments and expenditure**\n\n**Group total:**\n\n## **EUR 17,652,563**\n\nImage /page/228/Figure/7 description: This bar chart titled \"Divisions\" shows the values for stainless steel and high-performance alloys. The value for stainless steel is €13,360,997, and the value for high-performance alloys is €4,291,566.\n\nImage /page/228/Picture/8 description: A high-angle, close-up shot captures a section of a metal railing, likely part of a staircase or barrier. The railing is constructed from a combination of polished silver and dark gray metal components. The silver elements consist of smooth, rounded bars that run horizontally, providing a sleek and modern aesthetic. These bars are supported by vertical posts and angled supports made of dark gray metal, which add structural integrity and a contrasting visual element. The gray metal parts are connected with visible bolts and fasteners, giving the structure a somewhat industrial appearance. The background consists of gray paving stones or tiles, suggesting an outdoor or public space. The lighting is soft and diffused, creating subtle shadows and highlights on the metal surfaces, enhancing their texture and form.\n\n{229}------------------------------------------------\n\nImage /page/229/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue, circular shape. The word is in a lighter color, possibly white or a light shade of blue, which contrasts with the darker blue of the surrounding circle. The circle is not fully closed, leaving a gap at the bottom.\n\n#### **CEDINOX**\n\nThrough its commitment to the dissemination of knowledge, Acerinox supports and promotes the work of CEDINOX, the Spanish Association for the Research and Development of Stainless Steel.\n\nThis not-for-profit association bases its activity on four fundamental pillars: research, advice, dissemination and training on stainless steels. Founded in 1985, it collaborates actively with the main Acerinox factories, users and universities.\n\nAmong the Association's research activities, worthy of note is its participation in different projects, the search for new applications and the detection of opportunities for the development of this material in sectors as varied as industry, energy, architecture and transport, to name a few.\n\nCEDINOX advises companies and professionals on the correct selection and maintenance of stainless steels, as well as their transformation and cleaning. It has an extensive library on its website and responds to the technical queries through its online channel. The association has also been involved in international reference projects such as the Hong Kong Macao bridge, the Sagrada Familia, the Santiago Bernabeu stadium and the extension of the port of Monaco, as well as different projects related to renewable energies and the industry in general. CEDINOX also participates and collaborates in the drafting of various regulations on stainless steel, such as the recent building code. Likewise, it stands up for steel's advantages in different forums.\n\nThe preparation of numerous technical documents on stainless steels, together with its magazine \"Acero Inoxidable\", is an excellent way of making the material known among professionals and users. CEDINOX also translates technical documentation into Spanish, positioning the company as a leading source of information on stainless steel in Spanish. Its participation in fairs such as the Stainless Steel World Exhibition and Conference in Maastricht, the Metal Madrid Fair and the Tube and Wire Fair in Düsseldorf allows CEDINOX not only to know the market and the sector in depth, but also to take part in lectures and forums. It also collaborates in activities from the World Stainless (International Stainless Steel Forum) and its working groups. Its growing presence on social media such as LinkedIn, Instagram, and YouTube, is another way of bringing the material closer to all kinds of audiences. The association's initiatives are not limited to Spain, as it is also operates globally through International Advisory Centers (IACs).\n\nAmong the activities with the greatest social impact are, without a doubt, the trainings carried out at universities and companies. In 2023, it offered a total of 35 courses at various Spanish universities - including two at high schools - in order to make stainless steel more familiar to almost 1,500 engineering and architecture students, 95 high school students, 74 university professors and 8 high-school teachers. Courses have also been held at 4 companies, with a total of 42 attendees.\n\nIt has a very close relationship with universities and the main research centers, and as a result of this link, the Acerinox Award was created for the best university engineering or architecture project related to stainless steels, already in its 7th year.\n\nIn short, the association's work supports the stainless steel sector by connecting professionals, seeking out and promoting the various synergies that may arise.\n\nhttps://www.cedinox.es/en/cedinox/que-es-cedinox/\n\nImage /page/229/Picture/12 description: The image shows a low-angle view of a modern building with a curved glass facade. The building's design features a series of interconnected glass panels that create a wave-like pattern against the sky. The sky is visible through the glass, with a gradient of light blue to white, suggesting a clear or slightly overcast day. The building's structure is partially visible, with the framework supporting the glass panels adding depth and dimension to the image. A purple rectangle is in the upper right corner.\n\n{230}------------------------------------------------\n\nImage /page/230/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned inside a partial circle, also in dark blue, that curves around the top and right side of the word. The background is white.\n\n## **5.4 Committed team, culture, diversity, and safety**\n\nAcerinox's culture includes its mission, vision, and values with guidelines and policies for people management and, specifically, the Group's commitment as a leading employer in its industry.\n\nIts priority is to attract and retain the best talent, promoting and implementing measures that promote equal opportunities, diversity, and inclusion of all professionals.\n\n#### **Attracting and retaining talent**\n\n#### **GRI 3-3**\n\nThe Group's selection and promotion policy establishes the basic principles of action deployed at all its subsidiary companies.\n\nAcerinox, with its presence on five continents, offers qualified employment opportunities and prospects for professional development and growth. It fosters a work environment based on trust and ensures stable, high-quality, safe, and healthy jobs.\n\n#### **\\_Key indicators**\n\n#### **GRI 2-7 / 404-1 / 404-3**\n\n**8,229 73.52** Employees h training/employee \\*The staff figure in this Appendix does not include 10 members of senior management.\n\nImage /page/230/Picture/12 description: The image shows a curved structure made of repeating geometric shapes, possibly squares or rectangles, creating a pattern that leads the eye towards a bright, light blue sky visible at the top of the frame. The structure appears to be part of a building or an architectural installation, with the geometric shapes casting shadows that add depth and texture to the overall design.\n\n#### **\\_Relevant activities**\n\nImage /page/230/Picture/14 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or success. The person is a simple stick figure, and the podium is also depicted in a minimalist style with three rectangular blocks of varying heights.\n\n## **Milestones 2023 Challenges 2024**\n\nCompletion of the management by objectives (MBO) policy Consolidation of the Group's positioning in a culture of roll-out for the entire workforce and its inclusion in the target-based variable remuneration.\n\nrecognition and pay for performance.\n\n| Inclusion of women executives or women with high<br>potential in the Progress-Promotion programs rolled out by<br>CEOE-ESADE.                                                                                                | Raising awareness of female leadership in different socio-<br>cultural environments to support female talent attraction<br>in the industry.                                                                                     |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Carrying-out of various publicity initiatives, such as \"Get<br>to Know Stainless Steel.\"                                                                                                                                     | Strengthen internal and overall communication through<br>digital transformation.                                                                                                                                                |\n| Implementation of measures to continue strengthening<br>leadership and professional development with Acerinox's<br>development plans, continuing with the \"Ignite Next<br>Generation\" and the “Leadership Academy” programs. | Extend the \"Leadership Academy\" program to the entire<br>Acerinox Group and strengthen our know-how, best<br>practices, and synergies across factories within the Group<br>through technology, training, and knowledge sharing. |\n| Appraising all the organization's job positions under the<br>certified system.                                                                                                                                               | Improve effectiveness, efficiency, and decision-making<br>through digital systems and tools for people management.                                                                                                              |\n| Establishment of initiatives and roadmap to comply with<br>parity regulations of the board of directors and the<br>Management Committee.                                                                                     | Continue to enhance our leadership in diversity, equality,<br>and inclusion and comply with the principle of parity.                                                                                                            |\n\n{231}------------------------------------------------\n\nImage /page/231/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, enclosed within a blue circle. The circle is not fully closed, with a gap at the bottom.\n\nAs of December 31, 2023, Acerinox had a global staff of 8,229 professionals, 33% (2,660 people) of whom work in Spain.\n\n| Acerinox | Acerinox | Bahru | Columbus | Inoxfil | NAS   | Roldán | VDM   | Subsidiaries and<br>service centers | Total |\n|----------|----------|-------|----------|---------|-------|--------|-------|-------------------------------------|-------|\n| Europa   | S.A.     |       |          |         |       |        |       |                                     |       |\n| 1,746    | 114      | 427   | 1,248    | 96      | 1,606 | 361    | 2,047 | 584                                 | 8,229 |\n\n\\*The staff figure in this appendix does not include 10 members of senior management.\n\nAgainst the current transformation and uncertainty backdrop, the Group's commitment to its employees can be observed in its efforts to safeguard jobs and in the high percentage of permanent employment contracts (97%).\n\nImage /page/231/Figure/6 description: The image is a bar graph titled \"N° employees\" showing the distribution of the workforce by gender and type of contract. The x-axis shows the years 2021, 2022, and 2023. The y-axis shows the number of employees, ranging from 0 to 10,000. For 2021, the number of women employees is 1,039 and the number of men employees is 7,089. For 2022, the number of women employees is 1,041 and the number of men employees is 7,083. For 2023, the number of women employees is 1,093 and the number of men employees is 7,136.\n\n#### **GRI 2-7**\n\nImage /page/231/Figure/8 description: The image contains two donut charts. The chart on the left is titled \"Number of employees by type of contract\". It shows that 97% of employees have indefinite-term contracts and 3% have temporary contracts. The chart on the right is titled \"% Employees\". It shows that 86.7% of employees are men and 13.3% are women.\n\nAcerinox is implementing initiatives to develop flexibility, foster the hiring of highly-skilled professionals and young university graduates (e.g. \"Commercial Graduate Program\"), which brings young people onto staff, ensures that knowledge is transferred and increases the presence of women (13.28%).\n\n#### **\\_Changes over time in workforce**\n\n{232}------------------------------------------------\n\nImage /page/232/Picture/1 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in bold, blue sans-serif font. The word is positioned within a blue circle, which appears to be a thick ring. The background is white.\n\nSome of the initiatives include international internships for students and recent graduates, the Group's collaboration agreements with more than 30 universities and training centers to bring in new talent, renew and extend knowledge, and facilitate generational coexistence.\n\nIn parallel, the Group continues to increase its presence at universities by participating at jobs fairs in major international locations.\n\nThe Company promotes a training model that is adapted to the needs of each job position in order to enhance performance. The number of training hours per employee has increased significantly with respect to the prior year (73.52 hours).\n\nToday's environment is complex, changing and digitalized, and requires quick adaptation to new challenges. The industry is in continuous transformation, which requires continuous learning about the digital context, together with the use of agile methodologies to train professionals. Acerinox is therefore committed to continuing to develop the technical and managerial skills of all our employees.\n\nImage /page/232/Picture/6 description: The image shows a low-angle view of two modern buildings with glass facades against a clear blue sky. The building on the left has a unique, spiraling design, while the building on the right has a more conventional, curved shape. The glass reflects the sky, creating a sense of openness and height. The composition emphasizes the architectural details and the contrast between the two buildings.\n\nImage /page/232/Figure/7 description: The image shows the text \"\\_Hours of training per year per employee\".\n\nImage /page/232/Figure/8 description: The image is a bar chart titled GRI 404-1. The x-axis is labeled 'Year' and shows the years 2021, 2022, and 2023. The y-axis ranges from 0 to 150 in increments of 25. There are six categories of data: Director, Analyst, Administrative staff, Manager, Specialist, and Operator. In 2021, the values are 9 for Director, 15 for Analyst, 14 for Administrative staff, 22 for Manager, and 71 for Operator. In 2022, the values are 7 for Director, 26 for Analyst, 17 for Administrative staff, 23 for Manager, and 75 for Operator. In 2023, the values are 11 for Director, 30 for Analyst, 31 for Administrative staff, 26 for Manager, 29 for Specialist, and 132 for Operator.\n\n## **Leadership and global positioning initiatives**\n\nThe Acerinox Group's leadership in the industry is based on promoting talent development, because the Acerinox of the future must be based on the commitment and involvement of its employees.\n\nIn 2023, the \"Ignite Next Generation\" program, our executive program for the Group's future leaders, drew to a close. The participants presented major advances in the implementation of their innovation projects in face-to-face meetings with members of senior management in the United States, South Africa, and Spain.\n\nThe NAS factory served as a pilot for the launch of the new \"Leadership Academy\" program, aimed at the entire chain of middle managers and team managers at production facilities. The program covered various matters, from communication skills and effective feedback to problem solving, teamwork, and more.\n\nIn 2023, the Group completed the full implementation of the Management by Objectives program for the entire target group (a total of approximately 1,000 employees), which represents a qualitative and quantitative leap in individual and global performance. In this way, individual objectives contribute to the Company's strategic targets. This program structures the variable compensation policy based on individual and company performance.\n\n{233}------------------------------------------------\n\nImage /page/233/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The circle is not a solid line but appears to be made of a thicker line that gives the impression of depth.\n\n### **Talent attraction and retention initiatives**\n\n#### **GRI 401-2**\n\nIn terms of attracting young talent, in 2023, participants in our programs for recent graduates developed a continuousimprovement project that they presented to management. This experience allowed them to gain business knowledge and improve their analytical, communication, and management skills, as well as gain exposure and visibility at all levels of the organization.\n\nIn addition to individual development plans, the \"Excellence Talent Program,\" which helps our professionals in their development, has been continued. This program also fosters alignment with Management by Objectives and therefore with the Company's strategy to ensure the successful performance of people and the business.\n\nAlso, during the year, all the Company's job positions were evaluated under a certified system, which allows for the consolidation of the organizational structure and the provision of greater transparency in all people management processes.\n\nAdditionally, the company offers a range of employee benefits, including life insurance, health insurance, disability and invalidity coverage, a pension fund, travel allowance, scholarships for employees and their children, disability benefits, death benefits, school and daycare subsidies, meal subsidies and parental leave.\n\n#### **Communication initiatives**\n\nDuring 2023, the \"Acerinox Insights\" sessions have continued through regular talks given by the top managers in different areas to all Group employees. In these sessions, the company's strategy in terms of sustainability, digital transformation, product, business, financial results, and production processes were presented.\n\nLikewise, the different specific Management Committees have strengthened strategic communication with their teams with the aim of reaching all levels of the organization to generate greater overall alignment, together with the improvement of communication channels in the production centers through digital tools.\n\nA case in point is the \"Get to Know Stainless Steel\" initiative at NAS, our factory in Kentucky (USA), where bimonthly online information sessions are held for the entire workforce on matters related to the product and the manufacturing process.\n\n#### **Collective bargaining**\n\nThe Group has collective bargaining agreements in force in all production centers, maintaining an open, fluid, and cooperative dialogue with the workers' representatives . Issues related to working conditions and health and safety, among others, are addressed. Meetings with workers' representatives are held regularly or whenever required to address a specific issue.\n\n#### **Employee satisfaction**\n\nIn 2023, various measures were implemented to improve the working environment and employee satisfaction.\n\nThe initiatives that have been implemented include everything from flexibility measures that help with work-life balance and co-responsibility to measures that have improved communication and collaboration between different teams.\n\nThe various team-building initiatives used sustainable values, promoting teamwork and effective communication between different departments.\n\nAdditionally, an Innovation Committee has been created for the company's departments to collect all suggestions for continuous improvement through different channels accessible to all workers, providing continuity and supporting implementation.\n\nWe continue to position ourselves as a leading employer in all our business units through various certifications such as EcoVadis. In this regard, the Great Place To Work certification of our high-performance alloys division, VDM Metals in Germany, is noteworthy.\n\nAdditionally, as part of the actions aimed at employee satisfaction, Acerinox has continued with its Scholarship Policy, offering university scholarships every year for the children of our employees in order to encourage their personal and professional development.\n\n{234}------------------------------------------------\n\n## **Equality, diversity, and inclusion**\n\n#### **\\_Relevant activities**\n\nImage /page/234/Picture/3 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in a gesture of victory or success. The person is a simple line drawing, and the podium is also depicted with simple lines, suggesting a minimalist or symbolic representation of achievement.\n\nImage /page/234/Picture/4 description: The image shows a winding path leading to a flag. The path is drawn with a light purple line and consists of several curves and bends. The flag is located at the end of the path, indicating the destination or goal. The path starts from the bottom left corner and ends at the top right corner.\n\n| Milestones 2023                                                                                                  | Challenges 2024                                                                                                    |\n|------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|\n| Monitoring and evaluation of the equality plans in force<br>(91% of execution).                                  | Complete the initiatives agreed in the equality plans.                                                             |\n| Provision of more impetus to female leadership initiatives<br>(progress, promotion and women of steel programs). | Comply with the new legislation on parity in<br>management bodies and management committees.                       |\n| Female leadership initiative with involvement in specific<br>development tasks.                                  | Promote an awareness campaign for comprehensive<br>protection against harassment and violence in all its<br>forms. |\n\nThe Equality, Diversity, and Inclusion Policy, accessible on the Acerinox company website, sets out the Group's basic principles in this area, which are implemented across all Group companies. It includes management procedures to prevent all kinds of discrimination and promote diversity.\n\nAcerinox continues to develop various initiatives in place to promote the participation of women, especially at professional levels and for positions in which women are under-represented.\n\n#### **\\_Key indicators**\n\n#### **GRI 2-7 / 404-1**\n\n**13.28**\n\n## **13.28 % 91% 259**\n\nWomen\n\nWomen Equality plan actions completed disabilities Employees with\n\nImage /page/234/Picture/15 description: The image shows a low-angle view of two modern skyscrapers with glass facades. The buildings are positioned close to each other, creating a narrow gap through which the sky is visible. The glass reflects the sky and surrounding buildings, creating a shimmering effect. The buildings have a sleek, modern design with clean lines and sharp angles. The overall impression is one of height, grandeur, and technological advancement.\n\nThe percentage of women in the workforce is up slightly on the previous year to represent 13.28% of the entire Acerinox staff. If operators are removed from the equation, women represent 32.76% of the workforce.\n\n#### **\\_Women in the workforce (%)**\n\n#### **GRI 2-7**\n\nImage /page/234/Figure/19 description: The image is a bar chart showing the percentage of women in 2021, 2022, and 2023. In 2021, the percentage of women was 12.80%. In 2022, the percentage of women was 12.81%. In 2023, the percentage of women was 13.28%.\n\nImage /page/234/Figure/21 description: The image shows a line graph with data points for the years 2021, 2022, 2023, 2024, and 2030. The y-axis represents percentages. The data points are as follows: 12.80% in 2021, 12.81% in 2022, 13.08% and 13.28% in 2023, 13.53% in 2024, and 15.00% in 2030.\n\n{235}------------------------------------------------\n\nAcerinox reviewed its target of adding women to the workforce, setting a target of 15% by 2030.\n\nAcerinox has equality plans negotiated with the representatives of workers at all the Group's companies in Spain while continuing to promote specific initiatives adapted to the reality of each country where it operates.\n\nIn 2023, 91% of the measures established in the equality plans were carried out, compared to 75% in 2022. Among them, various initiatives taken by suppliers and providers are noteworthy, as well as those related to equality, communication, and awareness-raising.\n\nIn this regard, the unbiased assessment of all job positions is of particular significance, and it is based primarily on the factors of competence, responsibility, and problem-solving ability, as well as their contribution to the business. This initiative ensures that positions of equal value are compared regardless of their occupants, co-responsibility measures can be monitored, and so on. With these projects, Acerinox has facilitated the progressive development of the incorporation of women to the Group, reaching 13.28%.\n\nAcerinox manages diversity and non-discrimination arising from any circumstance of a personal or social nature, through the code of conduct, the general equality, diversity and inclusion policy, the general human rights policy, and the general selection and promotion policy, taking into account the specific conditions of all the locations where it operates which, due to their geographic dispersion, present major cultural differences. Specifically, it fosters the workplace inclusion of people with different abilities. As of 2023, the Group had 259 employees with some form of disability (2022: 256 employees).\n\nAcerinox's remuneration model promotes fair and transparent pay that is not skewed by any discriminatory or gender-based bias. The pay gap between men and women stood at 9.2% in 2023, which is down 5.46% with respect to the previous year. This difference is primarily due to the later addition of women to the workforce and their under representation more broadly in the industry. These factors have an adverse effect on women in terms of receiving salary items associated with concepts such length of service, experience, specialization or shift work.\n\nIn 2023, total remuneration paid to members of the board of directors was EUR 4,167 thousand. The four female members of the Board were paid EUR 600 thousand. Remuneration to the senior management team, excluding the CEO, totaled EUR 12,044 thousand. At the Annual Shareholders' Meeting held on May 23, 2023, the directors' remuneration policy was endorsed by 90.67% of the votes.\n\nAcerinox supports the work-life balance and well-being of its employees through flexibility measures and social benefits such as life insurance, medical insurance, flexible working hours, intensive working days, and remote work, among others.\n\nOver the course of 2023, 305 employees took maternity and paternity leave, after which return-to-work (99%) and retention rates remained high (88%).\n\nImage /page/235/Picture/10 description: The image shows a low-angle view of several tall buildings with glass facades, creating a modern and urban architectural scene. The buildings are angled towards the center of the frame, converging towards a patch of blue sky with scattered clouds visible between the structures. The glass reflects the sky, adding depth and a sense of openness to the composition. The overall impression is one of height, scale, and contemporary design.\n\n## **CEO for Diversity**\n\nBernardo Velázquez, the company's CEO, has joined the CEO Alliance for Diversity backed by the Adecco Foundation and the CEOE Foundation. This initiative's mission is to unite companies around a common and innovative vision of diversity, equity, and inclusion (DEI), as well as to accelerate the development of strategies that contribute to business excellence, the competitiveness of talent, and the reduction of inequality and exclusion in Spanish society.\n\nImage /page/235/Picture/13 description: The image shows the logo for CEO x LA DIVERSIDAD. The word \"CEO\" is in large, bold, black letters on the top line. To the right of \"CEO\" is a teal-colored symbol that looks like two intertwined infinity symbols. To the right of the symbol are the letters \"LA\" in black. On the second line, below \"CEO\", is the word \"DIVERSIDAD\" in large, bold, black letters.\n\n{236}------------------------------------------------\n\nImage /page/236/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The text is positioned to the left of a circular shape, which is also in dark blue. The circular shape appears to be a stylized representation of a globe or a ring, with a thick outline and a hollow center.\n\n## **Health and safety**\n\n**GRI 403-1 / 403-2 / 403-3 / 403-4 / 403-5 / 403-6 / 403-7 / 403-8 / 403-9 / 416-1**\n\n#### **\\_Relevant activities**\n\nImage /page/236/Picture/5 description: The image shows a line drawing of a person standing on a podium with their arms raised in a gesture of victory. The person is drawn with simple lines, and the podium has three levels. The drawing is in a light purple color.\n\n|   | 1 |\n|---|---|\n|   |   |\n|   | O |\n|   |   |\n| 0 |   |\n\n### **Milestones 2023 Challenges 2024**\n\n| A significant reduction in the Group's accident rates: 24%<br>LTIFR and 18.5% TRIR            | Accident performance improvement pathway. TIR<br>reduction target -26% compared to 2023 |\n|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|\n| ISO 9001, 14001 and 45001 certification of our main<br>production centers                     | Consolidation of HSE management system integration                                      |\n| Monitoring of a leading indicator panel on HSE<br>performance                                 | Proactive HSE and process safety indicators dashboard                                   |\n| Variable compensation linked to reduction of the LTIFR<br>(group) / IRR (business unit) ratio | Variable compensation linked to reduction of TIR (group /<br>business units)            |\n| Launch of the cardinal safety and environmental rules                                         | Deployment of safety culture and leadership model                                       |\n\nSafety is one of Acerinox's company values and defines the way the Group works. The commitment to employee health and safety is woven into every level of the Company, from senior management to the entire workforce. These same stringent levels are also demanded of third-party contractors.\n\nThe Group has an occupational health and safety policy, the aim of which is to reach zero accidents in operations. Accessible on the company website, it sets out the basic principles for action and application across all companies.\n\nIn 2023, the Group worked on the roll-out of its health, safety and environment strategy for the coming five years, based on six fundamental pillars:\n\n- Integration of the health, safety and environment management system.\n- Safety-focused corporate culture.\n- Health, safety and environment corporate processes.\n- Structure of safety processes.\n- Reduction in the environmental footprint.\n- Health, safety and environment in Industry 4.0.\n\n**\\_Key indicators GRI 403-9**\n\n**3.47 7.91**\n\nLTIFR\\* × 1,000K TRIR\\*\\* × 1,000K\n\n\\*LTIFR: Lost time injury frequency rate \\*\\*TRIR: Total recordable injury frequency rate\n\nImage /page/236/Picture/23 description: The image shows a low-angle view of a modern bridge pylon against a clear blue sky. The pylon is white and cylindrical, with a slightly flared top. Numerous steel cables are attached to the top of the pylon, fanning out in a symmetrical pattern towards the edges of the frame. The cables are evenly spaced and appear taut, suggesting they are under tension. Small, dark-colored dampers or connectors are visible along the length of the cables. The sky is a gradient of light blue, with a few wispy clouds visible in the upper right corner. The composition emphasizes the height and structural elements of the bridge, creating a sense of scale and engineering precision.\n\n{237}------------------------------------------------\n\nHealth and safety performance continued to improve in line with the trend from previous years, recording an LTIFR reduction of 24% and TRIR reduction of 18.5% at Group level compared with 2022.\n\nFor 2024, we are being even more ambitious, setting an accident rate reduction target of 26% for the TIR vs. 2023 for employees and contractors.\n\nProcess safety is a critical aspect of operations to prevent industrial accidents.\n\nAcerinox applies the WorldSteel process safety model based on six fundamental principles:\n\n- Ensuring commitment to process safety management.\n- Establishing a hazard assessment and risk analysis program.\n- Implementing and maintaining a risk monitoring and management system.\n- Striving for excellence and learning from experience.\n- Using continuous improvement to ensure the effectiveness of process safety management.\n- Maintaining a sense of vulnerability in the safety management of each process.\n\nRisk analyses are performed when there is a change in facilities or operations. Hazard reporting is done through the preventive observations and the whistleblowing channel, if applicable, for anonymized reports.\n\nAcerinox monitors all safety incidents in its operations, also investigating and implementing corrective and preventive measures to mitigate their recurrence.\n\nImage /page/237/Picture/13 description: The image shows a stylized icon of a presentation or training session. A figure stands to the right, gesturing towards a screen displaying a bar graph. Three stylized figures are seated in front of the screen, presumably as the audience.\n\n**The Group has sustainable loans linked to the improvement of its employees' accident rate. Specifically, its target is to improve the LTIFR x 1,000k indicator by 2% compared to 2022 in the factories of Acerinox Europa, North American Stainless, Columbus Stainless and Bahru Stainless; this is 3.3, and the target has already been met.**\n\nImage /page/237/Picture/15 description: The image is a close-up of a modern building with a unique architectural design. The building features a grid-like pattern of horizontal and vertical lines, creating a series of rectangular shapes. The lines are a dark blue color, and the spaces between them are filled with white. The overall effect is one of clean lines and geometric shapes. The image is taken from a low angle, looking up at the building. The sky is not visible, and the focus is on the building's design.\n\n{238}------------------------------------------------\n\nImage /page/238/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters, positioned within a partial blue circle. The circle appears to be incomplete, arching over and around the text.\n\n#### **\\_Lost time injury frequency rate (LTIFR)**\n\n#### **GRI 403-9**\n\nAcerinox is continually working to fuse safety culture into operations by tying the variable remuneration of senior management and plant managers to an improvement in these rates.\n\nThe proactive HSE indicators, deployed in all production centers, are a fundamental tool for monitoring performance. Acerinox has met its loan-linked target.\n\nImage /page/238/Figure/6 description: The image is a line graph comparing three different categories across four years (2021-2024). The y-axis ranges from 2.50 to 10.00. The three categories are \"Group (employees and contractors)\", \"Sustainable loan target\", and \"ACX EU, NAS, CLB, BHR\". In 2021, the \"Sustainable loan target\" is at 7.42, \"Group (employees and contractors)\" is at 4.53, and \"ACX EU, NAS, CLB, BHR\" is at 2.92. In 2022, the \"Sustainable loan target\" is at 4.57, \"Group (employees and contractors)\" is at 4.44, and \"ACX EU, NAS, CLB, BHR\" is at 2.73. In 2023, the \"Sustainable loan target\" is at 3.47, \"Group (employees and contractors)\" is at 4.35, and \"ACX EU, NAS, CLB, BHR\" is at 3.30. In 2024, the \"Group (employees and contractors)\" is at 3.30.\n\n#### **\\_Absenteeism rate own personnel (%)**\n\n#### **GRI 403-9**\n\nDespite the increase experienced in 2023, the reduction of absenteeism is another major focus of action and effort through the monitoring of cases and consultation with accident insurance companies in order to achieve better reporting and management.\n\nTeam initiatives in health, safety and environmental matters are drivers of change that allow us to identify operational improvements.\n\nSeveral innovations have received industry awards, such as the World Stainless Industry Awards in Safety: Gold and Bronze for the Bahru plant, the World Stainless Industry Awards in Sustainability for the Palmones plant, and the World Steel Occupational Safety and Health Excellence Recognition for the Columbus plant.\n\nImage /page/238/Figure/12 description: This bar chart shows the values for 2021, 2022, and 2023. The value for 2021 is 4.93%, the value for 2022 is 5.25%, and the value for 2023 is 6.32%.\n\n#### **Health and well-being**\n\nOne of the Company's priority objectives is to promote the well-being of people in order to achieve a healthy working environment in which employees feel comfortable, satisfied and have a good quality of life. We understand well-being management as a state of balance that encompasses mental, physical, and emotional health.\n\nAcerinox has an employee assistance program (EAP), a psychological counseling service to help employees resolve and manage situations that may affect them emotionally in their daily lives. All employees have a psychologist available to them in real time, 24 hours a day, 7 days a week.\n\nThe EAP also offers thematic workshops on different matters related to health and wellness, such as workshops on managing mental blocks, stress control, relaxation and mindfulness techniques, and nutrition workshops.\n\nImage /page/238/Picture/18 description: The image shows a low-angle view of several modern skyscrapers against a blue sky with scattered clouds. The buildings are primarily blue and glass, reflecting the sky. The composition emphasizes the height and scale of the buildings, with converging lines leading the eye upwards. The lighting is bright, highlighting the reflective surfaces of the buildings.\n\n{239}------------------------------------------------\n\nImage /page/239/Picture/1 description: The image shows a partial view of the Acerinox logo. The logo features the word \"ACERINOX\" in bold, sans-serif font, with the letters partially obscured by a blue circular shape that surrounds the text. The blue circle is thick and prominent, adding a sense of enclosure and emphasis to the brand name.\n\nImage /page/239/Picture/2 description: The image shows a badge icon with a star in the center and the words \"FEATURED CASES\" in large, bold letters to the right of the badge. A vertical line separates the badge from the text.\n\n### **Launch of the HSE Cardinal Rules**\n\nIn 2023, the Group launched its Cardinal Rules, providing a framework for ensuring safety as a common value for employees and contractors in each and every operation.\n\nThese rules are based on Acerinox's history and are simple instructions to prevent high-risk situations.\n\nImage /page/239/Picture/6 description: The image shows a diagram of Cardinal Rules. The diagram is arranged in a circular fashion, with the words \"Cardinal Rules\" in the center. Around the center are various safety rules, including \"Control of work\", \"Moving machinery\", \"Confined spaces\", \"Work at heights\", \"Lifting and hoisting\", \"Safe driving\", \"Substance abuse\", and \"LO(TO)2\".\n\n## **Gold World Stainless Industry Award in Safety, intelligent sensors. Bahru**\n\nThe implementation of smart sensors on coil turrets increases worker safety by reducing the risk of unintended strikes or entrapment. Upon detecting the presence of employees and obstacles in the safety area, the turret movement locks down. These sensors improve productivity by reducing accidents and overall production efficiency.\n\nImage /page/239/Picture/9 description: The image shows an industrial setting with heavy machinery. The floor is marked with red and white striped safety lines. There are two red painted areas on the floor, one larger and one smaller, both outlined with yellow dotted lines. The larger area has several rectangular markings on it.\n\n## **Bronze World Stainless Industry Award in Safety.**\n\n### **NAS ergonomic lifting equipment**\n\nA detailed analysis of the loads handled at each of the workstations made it possible to establish different mechanical lifting systems to minimize ergonomic risks.\n\n## **World Steel Occupational Safety and Health Excellence Recognition.**\n\n#### **Columbus**\n\nFollowing the spontaneous breakage of a hot roll, which caused particles to shoot out with no personal or material consequences, the Columbus team developed an innovative safety hood solution during the cooling process, improving safety and efficiency in hot rolling operations.\n\nImage /page/239/Picture/16 description: A worker wearing a hard hat and ear protection stands near a blue container, looking towards a large industrial machine with a cylindrical component. Above the machine, a gray rectangular object is suspended by a yellow crane hook. The industrial setting includes visible pipes and structural elements in the background.\n\nImage /page/239/Picture/17 description: The image shows a complex network of blue metal beams forming a ceiling structure. The beams are arranged in a triangular pattern, creating a sense of depth and complexity. At regular intervals, there are light fixtures hanging from the structure, providing illumination. The background is a light color, possibly the sky or a translucent material, which allows light to filter through the structure.\n\n{240}------------------------------------------------\n\nImage /page/240/Picture/1 description: The image shows the text '5.5 Supply chain' in a purple sans-serif font.\n\n## **Supply chain management**\n\n**GRI 2-6 / 204-1 / 308-1 / 308-2 / 414-1 / 414-2**\n\n#### **\\_Relevant activities**\n\nImage /page/240/Figure/5 description: The image shows a light purple icon of a person standing on a three-tiered podium with their arms raised in the air. The person is represented by simple lines, and the podium is also depicted in a minimalist style.\n\n|  | 2 |\n|--|---|\n|  | O |\n|  |   |\n|  |   |\n\n| Milestones 2023                                                                                                                                     | Challenges 2024                                                                                                         |\n|-----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|\n| Approval of the code of conduct for business partners.                                                                                              | Definition of the Company's core procurement processes,<br>thus ensuring good management of responsible<br>procurement. |\n| Approval of the procedure for assessing risks in the<br>supply chain.                                                                               | Assessment and first report on supply chain risk status                                                                 |\n| Definition of the supplier audit methodology and<br>execution of a pilot test                                                                       | Audits of critical suppliers and sampling of non-critical<br>suppliers to build a resilient, sustainable value chain    |\n| Optimization of procurement and contract arrangement<br>processes and the associated costs. Deployment of the<br>first offline electronic catalogs. | Launch of a supplier portal to ensure harmonized<br>purchasing management at global level.                              |\n| Awarding of the most prestigious sustainability accolade,<br>the EcoVadis award (platinum)                                                          | Promote compliance with ESG standards in the supply<br>chain through the Global Compact training program.               |\n\nThe management of a sustainable supply chain is a priority for Acerinox, and one of the five pillars of the Positive Impact 360º sustainability plan. The Group works continuously to optimize monitoring in the face of increasing customer demands and in order to generate a positive impact on society.\n\nThe acquisition of raw materials, products and services is pivotal for Group activity and for the compliance with the required market standards on quality, pricing, logistics, and sustainability. Due to the very nature of Acerinox, supply activities are divided into two large groups: general purchases, which encompasses both productive and non-productive services and goods, and the acquisition of raw materials.\n\nImage /page/240/Picture/10 description: A low-angle shot captures a modern building with a glass facade under a clear blue sky. The building's exterior is composed of numerous rectangular glass panels, framed by a grid of white or light-colored material. Some of the windows are slightly ajar, revealing a glimpse of the interior. The angle of the shot emphasizes the height and geometric design of the building, with the lines of the facade converging towards the top right corner of the frame. The sky is a uniform, bright blue, providing a stark contrast to the reflective glass surface of the building. A portion of the bottom of the image is obscured by a solid purple block.\n\nImage /page/240/Picture/11 description: The image shows the logo for Acerinox. The logo is a blue oval with the word \"ACERINOX\" in white letters inside the oval. The letters are bold and sans-serif.\n\n{241}------------------------------------------------\n\nImage /page/241/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, blue letters, enclosed within a blue circle. The circle is not fully closed, with a gap at the top.\n\n#### **Regulatory framework of the purchasing management model**\n\nThe Group's procurement activities are guided by the rules and principles that must govern the actions of all its companies.\n\nFirstly, Acerinox has general contracting conditions for the provision of services and the procurement of goods.\n\nSince 2021, the Group has also had a responsible purchasing policy aimed at consolidating suppliers, maintaining stable and lasting relationships, sharing ethical criteria, and promoting sustainable value creation. This policy, accessible on the company website, includes the general principles of purchasing goods and services related to economic, competitive, social, and environmental matters. It also sets out the Group's objectives and basic principles of action for all its companies.\n\nIn 2023 the code of conduct for business partners was approved, which defines Acerinox's principles and requirements with respect to its suppliers of goods and services, and vis-à-vis intermediaries, advisors and other business partners. This code is a fundamental requirement for any of the Group's contractual relationships. The principles and requirements included in it are based on the Acerinox code of conduct and good practices, the Group's general contracting conditions, the general purchasing policy, and other corporate policies. At the same time, they are aligned with the 10 principles of the United Nations Global Compact, the International Bill of Human Rights, and the principles and guarantees included in the eight Conventions of the International Labor Organization, as well as the Organization for Economic Cooperation and Development's Due Diligence Guidance for responsible supply chains of minerals from conflict-affected and highrisk areas.\n\nThe Group's procurement activities are also guided by the principles set out in the internal instruction on the prevention of money laundering, which establishes the minimum requirements that must be met by any process for the purchase of goods and services at Group companies.\n\n### **Purchasing strategy 2023-2027**\n\nThe Group has defined a purchasing strategy for the next five years based on three pillars:\n\n#### **1. ESG as the core of supply chain risk management**\n\nCompliance with the latest regulatory standards relating to ESG standards, as well as the management of other risks inherent in the supply chain, is key; it is also complex, as it involves a large number of activities and criteria. As a result, the process has been updated and digitalized, while at the same time deepening a more exhaustive evaluation of suppliers, making them end-to-end and with an established frequency, verifying various risk areas and establishing action and training plans. The process also includes the creation of a thirdparty risk committee to review the status of the risk and any associated measures.\n\nBased on this robust process, a digital tool has been deployed which, with the help of artificial intelligence, is capable of managing, processing and evaluating all data related to performance, management, compliance with ESG criteria, and impact on business continuity of each supplier that forms part of the supply chain. In this way, Acerinox can regularly monitor the status of its risks, design and set out action plans that it shares with the supplier, and, finally, report this information according to regulatory standards.\n\nIn 2023, other digitalization projects were launched to improve cost control processes and projects. Both are aimed at increasing the efficiency of the procurement process. These projects range from a supplier portal and the deployment of electronic catalogs and purchases by marketplace to the redefinition of the category strategy through the development of tools that facilitate decision-making using massive data processing.\n\nImage /page/241/Picture/14 description: The image shows a close-up of a blue metal structure, possibly a fence or part of a playground. The structure is made of cylindrical bars arranged in a grid-like pattern. The bars are painted in a bright blue color. The background is white.\n\n{242}------------------------------------------------\n\n## **2. Talent development**\n\nTalent development is a key lever for the Company's competitiveness and future. The changing needs of the environment mean that procurement professionals' skills must be identified, captured, and developed. It builds digital skills as a driver of innovation and places people at the center of value creation. To this end, the skills map has been redrawn, and individualized development and training plans have been designed to boost motivation, build potential, and promote multidisciplinary teamwork as a gateway to creativity, commitment, and optimal solutions at the corporate level.\n\n## **3. Fostering supplier relationships and focusing on value creation**\n\nTrust is a critical factor in establishing solid relationships with suppliers, which is very necessary in a highly volatile context. The closer, more robust, and more transparent this relationship is, the easier it will be to work towards common goals and, therefore, to achieve them.\n\nTo this end, Acerinox is building its partnerships with key suppliers, not only in the interests of operational efficiency, but also to foster innovation and value creation for customers and the Company.\n\n#### **Supplier relationship management**\n\nThe supplier approval process includes global and local regulations in areas such as the environment, health and safety, labor practices, compliance with international declarations on human rights, and quality standards, as well as a supplier risk assessment. Specifically, the group's suppliers must sign the Acerinox code of conduct; as of 2023, 1,061 suppliers had signed it. Of them, 773 were new suppliers.\n\n20% of the Group's strategic suppliers have already been evaluated according to ESG criteria, and 5% have been evaluated on the basis of capacity criteria.\n\nMoreover, minimum requirements have been defined, and those suppliers that do not meet the specified thresholds must devise improvement plans if they are to continue working with the Group. In this regard, 20 suppliers have been audited under ESG criteria (comparative information is not provided since this is the first year that non-critical suppliers evaluated are reported), 14 of these audits were on-site and of critical suppliers (2 audits in 2022), improvement plans were agreed for 3 of them. It should be noted that 100% of the audits carried out in 2023 obtained a favorable result and that no critical supplier has been terminated for non-compliance with ESG criteria.\n\n### **The supply chain in figures**\n\nAcerinox collaborates with over 7,000 suppliers worldwide, 773 of which are new. Almost 80% of suppliers are local, from the same country as the production unit (in the case of NAS, this refers to the states of Ohio, Indiana, and Kentucky) with revenue amounting to approximately EUR 3,000 million in 2023, thus facilitating and fostering the economic and social development of the communities in which the Group operates.\n\nImage /page/242/Picture/12 description: The image shows a view of several tall buildings in a city. The buildings are of different architectural styles, with some being older and made of brick, while others are modern with glass facades. The sky is visible between the buildings, and there are some clouds in the sky.\n\nImage /page/242/Picture/13 description: The image shows a low-angle shot of several skyscrapers against a light blue sky. The buildings are modern, with glass and steel facades. The tallest building is on the right side of the image and is angled towards the viewer. The building has a grid-like pattern of windows that reflect the sky and other buildings. The building in the center is slightly shorter and has a similar design. The building on the left is the shortest and has a darker glass facade. The sky is clear and provides a backdrop for the buildings.\n\n{243}------------------------------------------------\n\n## **\\_No. of suppliers and expenditure GRI 204-1**\n\n|                   | 2023          |         | 2022          |         |\n|-------------------|---------------|---------|---------------|---------|\n|                   | Total         | % Local | Total         | % Local |\n| No. of suppliers  | 7,702         | 78.59%  | 8,019         | 70.69%  |\n| Expenditure (EUR) | 4,966,502,847 | 59.12%  | 5,046,443,530 | 70.04%  |\n\n## **\\_No. of suppliers evaluated with ESG criteria**\n\n#### **GRI 308-1 / 414-1**\n\n|                                              | 2023  |        | 2022  |        |\n|----------------------------------------------|-------|--------|-------|--------|\n|                                              | Total | %      | Total | %      |\n| No. of critical suppliers* (category A)      | 267   | 3.47%  | 73    | 0.91%  |\n| No. of ESG evaluated critical<br>suppliers   | 54    | 20.22% | 23    | 31.50% |\n| No. of ESG evaluated critical<br>suppliers** | 292   | 38%    |       |        |\n\nImage /page/243/Picture/6 description: The image shows a close-up view of a modern architectural structure, possibly a roof or a dome, constructed with a network of metal beams and glass panels. The beams are arranged in a crisscrossing pattern, creating a geometric design. The glass panels are set between the beams, allowing light to filter through. The sky is visible through the glass, suggesting an outdoor setting. The overall impression is one of contemporary design and engineering.\n\n\\*Critical suppliers are defined as companies that supply products considered critical to Acerinox operations, safety, and ESG compliance.\n\n\\*\\*Comparative information is not provided since this is the first year that non-critical suppliers evaluated are reported.\n\nImage /page/243/Picture/9 description: The image shows a light purple icon of a badge or medal. The badge is circular with a star in the center. Ribbons hang down from the bottom of the circle.\n\n## **FEATURED CASE**\n\n#### **Sustainable supplier training program**\n\nSustainable supplier management requires a commitment to responsible performance that ensures sustainability throughout the value chain. Standing with and supporting the companies that form part of our supply chain is a key aspect of ensuring the company's sustainability. For this reason, Acerinox is participating in the second iteration of the \"Training Program: sustainable suppliers\". This global program is led by the Spanish Global Compact Network, whose goal is to provide sustainability training to SMEs that supply large companies such as Acerinox, one of the initiative's partners. At the end of the program, companies will be able to identify the risks and opportunities of corporate sustainability, the environmental and societal impacts generated by their activities, analyze priority sustainability issues for their activity and sector, and develop and implement sustainability actions and/or strategies that will enable them to improve their performance in this area.\n\n#### **\\_Recognitions**\n\nA commitment to sustainable purchases, helping to ensure sustainability principles are present throughout the life cycle of its products, was highlighted as a strength by EcoVadis. The measures and improvements implemented increased our \"responsible purchasing\" score by 10%, reaching 70 points. Progress in the management of this area has contributed to our maintaining the EcoVadis Platinum medal.\n\n#### **\\_Participation in forums**\n\nThe Acerinox Purchasing Department is actively participating in leading forums and congresses to share experiences and best practices in this area. The aim is to place us at the forefront and promote sustainability based on the sustainable management of the supply chain.\n\n{244}------------------------------------------------\n\n**\\_Purchases from suppliers**\n\n**EUR 4,967**\n\n**million**\n\n## **79% of suppliers are local**\n\nEncouraging local development of the communities in which the Group operates.\n\nImage /page/244/Picture/6 description: The image shows a close-up of a blue steel framework against a bright blue sky. The sun is shining through the framework, creating a starburst effect. The framework is made up of many different beams and supports, all connected together. The Acerinox logo is visible in the top right corner of the image.\n\n### **Contribution to the community**\n\n#### **GRI 3-3 / 2-28**\n\nAcerinox is committed to creating value and helping build a more prosperous and sustainable environment in the local communities and countries where it is present in order to increase its positive social impact.\n\nTo achieve this goal, in 2023, the company established its social action framework to harmonize activities along five priority lines for economic growth, social sustainability and environmental protection:\n\n- Socio-economic development. Initiatives that support the progress of the communities where the Group operates and that generate opportunities to create value.\n- Social well-being of people. Social initiatives focused on well-being and improving the quality of life of communities, particularly the most vulnerable people.\n- Environmental protection and recovery. Projects that actively help to improve the environment, mitigate climate change and preserve local biodiversity.\n- Commitment to quality education. Collaboration on initiatives that promote lifelong learning, talent development among future professionals, and their incorporation to the labor market.\n- Inclusive development. Initiatives that encourage social and labor integration among disadvantaged groups to promote a more inclusive world and ensure that nobody is left behind. In this regard, special attention is paid to groups such as women, the unemployed elderly, and disabled people, to help close the inequality gap.\n\nSocial action management is based on dialogue with stakeholders to respond to their needs and priorities. To identify actions, priority is given to local initiatives with tangible benefits at the municipal or regional level where the facilities are located.\n\n#### **\\_Key indicators**\n\n**EUR 539,763.00 Invested in social actions**\n\nImage /page/244/Figure/20 description: The image is a bar graph comparing values for the years 2021, 2022, and 2023. The value for 2021 is 415, the value for 2022 is 605, and the value for 2023 is 540.\n\n{245}------------------------------------------------\n\nImage /page/245/Picture/1 description: The image is a donut chart titled \"Contribution to the community\". The chart contains four categories: \"Contributions to foundations and nonprofit organizations\" with a value of 101,873, \"Association or sponsorship actions\" with a value of 35,046, \"Social action\" with a value of 206,949, and \"Institutional\" with a value of 195,895.\n\nFor us, investing in the community is a strategic instrument for the development of society and the local environment where we carry out our activity.\n\n| Milestones 2023                                                                  | Challenges 2024                                                                                        |\n|----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|\n| Roll-out of the Social Action Plan to all of the Group's<br>business units.      | Modification of action implementation to fit the new<br>context of the Group's various business units. |\n| Identification of new lines of collaboration to maximize<br>the positive impact. | Development of strategic alliances with other<br>organizations to maximize impact in different areas.  |\n\n#### **Corporate volunteering**\n\nAs part of our culture and social calling, we encourage collaboration and solidarity among our employees, promoting participation in projects aimed at improving the environment and the lives of disadvantaged groups to contribute to a more egalitarian society, as well as caring for nature.\n\nImage /page/245/Picture/6 description: The image shows a graphic with a light purple color scheme. On the left is a circular badge with a star in the center and ribbons hanging down. A vertical line separates the badge from the text on the right, which reads \"FEATURED CASES\" in a bold, dark purple font.\n\n#### **Socio-economic development**\n\nThe Columbus Stainless Techno Girls program offers selected girls the opportunity to experience the working world first-hand, receive an allowance and have on-site mentoring sessions for three years. After completing the program, the beneficiaries become part of the alumni association, where they are provided support and guidance to pursue higher education,\n\nImage /page/245/Picture/9 description: A group of students and adults are posing for a picture in front of a backdrop with the words \"Columbus Stainless\" on it. The students are wearing school uniforms, and the adults are dressed in business casual attire. The group is smiling and looking at the camera.\n\n{246}------------------------------------------------\n\n#### **Social well-being**\n\nVDM Metals supports the Balthasar Children's and Youth Hospice. For the first time since the pandemic, the traditional charity run around the Altena plant was held. The participants covered a total distance of about 400 km. The proceeds were donated to the hospice to strengthen its services.\n\n#### **Biodiversity preservation**\n\nAcerinox Europa employees and their families participated in a reforestation day in the Los Alcornocales National Park, Europe's only subtropical forest, which is threatened by serious problems such as drought. The \"Sowing the Future\" solidarity initiative promotes environmental awareness among our employees and children.\n\n#### **Commitment to education**\n\n#### Collaboration with the A LA PAR Foundation\n\nAcerinox continues to collaborate with the A LA PAR Foundation to jointly carry out activities that improve the quality of life of people with intellectual disabilities. Such initiatives notably include Funda Market, a solidarity market where products made by members from the Foundation combine with more than 50 brands to produce a weekend agenda for the whole family. In addition, we also held Family Day, where employees and their families participated in various activities at the foundation.\n\nFor the first time, Acerinox participated in the CAMPVS program, which aims to facilitate access to the workforce for students with intellectual disabilities. Company volunteers mentored the students in one-onone meetings to help bring the working world closer.\n\nWith this initiative, Acerinox wants to play a leading role in the project and contribute to closing the inequality gap.\n\nImage /page/246/Picture/10 description: A group of ten people are standing together indoors. The group is diverse in age and gender. The person in the center is holding a white sign with black text and a logo on it. The people are dressed in casual clothing, including jeans, sweaters, and jackets. The background is a light color, and there are some decorations hanging from the ceiling.\n\n#### **Collaboration with associations**\n\n#### **GRI 2-28**\n\nThe Acerinox Group partners with many national and international associations and organizations in order to publicize key aspects of its work, promote knowledge and positioning and share best practices in the sector. Particularly notable are its participation in the Worldsteel Association, UNESID, EUROFER, Responsible Steel, AEGE, AGI, the SERES Foundation, and others.\n\nImage /page/246/Picture/14 description: Three people are holding a large check. The person on the left is a woman with glasses and a white shirt. The person in the middle is a woman with dark hair and a dark top. The person on the right is a man in a suit jacket and white shirt. The check is made out to Kinder-und Jugendhospiz Balthasar for EUR 5,500.00. The check is dated Werdohl, 29.08.2023 and has the VDM Metals logo on it.\n\nImage /page/246/Picture/15 description: A group of people are gathered outdoors, seemingly listening to a speaker. The group consists of adults and children, some of whom are being held by adults. They are standing on a dirt or gravel area, surrounded by trees and foliage. In the background, there is a white vehicle with its trunk open, suggesting that they may be on a field trip or outdoor activity. The overall scene suggests an educational or recreational event taking place in a natural setting.\n\n{247}------------------------------------------------\n\nImage /page/247/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle partially surrounding the text. The text is in a bold, sans-serif font.\n\n## **6. Appendices**\n\n## **6.1 Scope of the report**\n\n#### **Standards and principles used**\n\nThe information included in this report relates to both financial and non-financial information and was prepared by the board of directors on February 28, 2024. The non-financial information statement has been favorably evaluated by the Sustainability Committee of the board of directors.\n\nThis 2023 Integrated Annual Report has been prepared taking into account the following reporting standards and principles:\n\n- In accordance with GRI Standards 2021, tailored to specific GRIs in compliance with Spanish Law 11/2018 and voluntarily to other GRI standards on material issues. See GRI table of contents appendix.\n- The Sustainability Accounting Standards Board (SASB) reporting standard for the SASB Iron & Steel Producers indicators. See SASB table of contents appendix.\n- The recommendations of the Task Force on Climate-Related Disclosures (TCFD). See TCFD table of contents appendix.\n- The Sustainable Development Goals (SDGs) approved by the United Nations General Assembly, which Acerinox includes in its strategy and which are detailed in the Contribution to the 2030 Agenda section.\n- The Ten Principles of the United Nations Global Compact, which are mentioned in chapter 5 Sustainable management model.\n- The recommendations in the Spanish Securities Market Commission's Guide for the Preparation of Management Reports of Listed Companies.\n\nAlso including:\n\n- **a)** Directive 2014/95/EU as regards disclosure of non-financial and diversity information, as well as related Spanish legislation (Law 11/2018).\n- **b)** In its first delegated act, Regulation (EU) 2020/852 of the European Parliament and of the Council of June 18, 2020 on the establishment of a framework to facilitate sustainable investment lays down the obligation to disclose information on how and to what extent the undertaking's investments are associated with economic activities deemed to be environmentally sustainable in relation to the objectives of climate change mitigation and climate change adaptation. See chapter 4.6 European taxonomy on sustainable finance.\n\n## **Scope of information in this report**\n\n#### **Timescale**: 2-3\n\n2023. The report is published annually.\n\n#### **Organizational scope**: 2-1 / 2-2\n\n#### Acerinox, S.A. and subsidiaries\n\nIn order to check and guarantee the reliability of the information provided to the various stakeholders, the Acerinox Group has submitted this report to external verification, through the professional services firm PwC, with a **limited level of assurance**. As a result of the verification process, an independent review report is produced, which includes the objectives and scope of the process, as well as the verification procedures used and the related conclusions. This report is included in chapter Appendices (6.8) to this report.\n\nImage /page/247/Picture/22 description: The image shows a close-up of a modern bridge structure with a network of white cables forming a grid pattern. The cables are thick and appear to be coated in a white material. They run diagonally across the frame, creating a sense of depth and perspective. To the left, a curved gray metal beam is visible, connected to a vertical white support structure with a series of bolts. The background is a bright, overcast sky, which provides a stark contrast to the geometric patterns of the bridge.\n\n{248}------------------------------------------------\n\nImage /page/248/Picture/1 description: The image shows the text \"6.2 Supplementary information (indicators)\". The text is in a purple color.\n\n#### **Sustainable use of resources**\n\n#### **\\_Main raw materials (metric tons)**\n\n#### **GRI 301-1 / 301-2**\n\n| t                  | 2023      | 2022      | 2021      |\n|--------------------|-----------|-----------|-----------|\n| Alloys             | 536,758   | 697,324   | 714,075   |\n| Gases              | 276,823   | 316,862   | 355,466   |\n| Acids              | 33,969    | 39,968    | 43,726    |\n| Recycled material* | 2,033,855 | 2,259,217 | 2,500,852 |\n| Recycled acid**    | 14,092    | 16,264    | 16,104    |\n\n\\*Recycled material is defined as purchased scrap, process and internal scrap, metal recovered from slag and other recycled waste.\n\n\\*\\*Recycled acid: total amount of nitric and hydrofluoric acid recovered from the process itself.\n\n\\*\\*\\*In 2023, 70.59% of the materials used in the steel manufacturing process were recycled, while in 2022 it was 68.18% and in 2023 69.20%, which is 3.52% more than in 2022 and 2.01% more than in 2021.\n\n#### **\\_Waste management (metric tons)**\n\n#### **GRI 306-3 / 306-4 / 306-5**\n\n| t                         | 2023      |       | 2022      |       | 2021      |        |\n|---------------------------|-----------|-------|-----------|-------|-----------|--------|\n| Total waste               | 1,298,793 | %     | 1,572,090 | %     | 1,669,375 | %      |\n| Landfill*                 | 262,827   | 20.2% | 333,534   | 21.2% | 471,076   | 28.2%  |\n| Recycled/Recovered        | 1,035,966 | 79.8% | 1,238,556 | 78.8% | 1,198,299 | 71.8%  |\n| Total non-hazardous waste | 1,182,735 | 91.1% | 1,432,963 | 91.2% | 1,521,645 | 91.15% |\n| Landfill                  | 203,578   | 17.2% | 252,595   | 17.6% | 385,541   | 25.3%  |\n| Recycled/Recovered        | 979,157   | 82.8% | 1,180,368 | 82.4% | 1,136,104 | 74.7%  |\n| Total hazardous waste     | 116,058   | 8.9%  | 139,127   | 8.8%  | 147,730   | 8.85%  |\n| Landfill                  | 59,250    | 51.1% | 80,939    | 58.2% | 85,535    | 57.9%  |\n| Recycled/Recovered        | 56,809    | 48.9% | 58,188    | 41.8% | 62,195    | 42.1%  |\n\n\\*Waste is disposed of by an authorized off-site waste manager.\n\nData for 2021 and 2022 have been recalculated, grouping together the Other (R&D&I) and Recycled/Recovered categories.\n\n#### **\\_CO2 emissions (CO2e metric tons)**\n\n#### GRI 305-1 / 305-2\n\nAcerinox, in its report, uses the operational approach. The Group reports the operating emissions at its production companies over which it exercises operational control.\n\n| tCO2e                       | 2023      |           |         | 2022      |           |         | 2021      |           |         |\n|-----------------------------|-----------|-----------|---------|-----------|-----------|---------|-----------|-----------|---------|\n|                             | Total     | Stainless | HPAs    | Total     | Stainless | HPAs    | Total     | Stainless | HPAs    |\n| Scope 1                     | 778,994   | 671,545   | 107,449 | 872,253   | 768,600   | 103,653 | 974,048   | 867,639   | 106,409 |\n| Scope 2 - market-<br>driven | 1,483,902 | 1,454,623 | 29,279  | 1,879,167 | 1,792,901 | 86,266  | 2,206,722 | 2,124,209 | 82,513  |\n| Total (scope 1 + 2*)        | 2,262,896 | 2,126,168 | 136,728 | 2,751,420 | 2,561,501 | 189,919 | 3,180,770 | 2,991,848 | 188,922 |\n\n\\*2021 data were corrected pursuant to the GHG Protocol.\n\n{249}------------------------------------------------\n\nImage /page/249/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The word is in a darker shade of blue than the circle.\n\nThe GWPs published in the IPCC Fifth Assessment Report have been used in this report. It should be noted that the DEFRA conversion factors incorporate the GWP of the IPCC Fifth Assessment Report.\n\nThe sources of information on the conversion factors for the calculation of GHG emissions, prioritizing the most specific ones for each facility, will be as follows:\n\n- Carbon footprint calculator from the Ministry organization. Scope 1+2 (Spain). Version 28.\n- DEFRA: Department for Environment, Food & Rural Affairs. (United Kingdom). Greenhouse gas reporting: conversion factors 2023.\n- Ecoinvent database. Version: 3.9.1.\n- Life Cycle Assessment: WorldSteel. (International). 2020.\n- EPA: United States Environmental Protection Agency. GHG (US). April 2023\n- Calculation and emission factors developed by the Intergovernmental Panel on Climate Change (IPCC). 2006 IPCC Guidelines for National Greenhouse Gas Inventories and IPCC Quito report.\n- Supplier-specific emission factors.\n\n#### **\\_CO2e emissions intensity (metric tons CO2e/metric ton)**\n\n#### GRI 305-4\n\n| tCO2e/t               | 2023  |           |      | 2022  |           |      | 2021  |           |      |\n|-----------------------|-------|-----------|------|-------|-----------|------|-------|-----------|------|\n|                       | Total | Stainless | HPAs | Total | Stainless | HPAs | Total | Stainless | HPAs |\n| Intensity (Scope 1+2) | 1.09  | 1.07      | 1.79 | 1.14  | 1.10      | 2.31 | 1.11  | 1.08      | 2.42 |\n\nThe Group's emissions intensity has decreased due to the increased use of renewable energy and the optimization of plant operations. This decrease is in line with the objectives established for the stainless steel division in the Positive Impact 360º Sustainability Master Plan.\n\nThe greenhouse gas reduction commitment extends to all other atmospheric emissions. Acerinox is working to reduce its emission figures for nitrogen oxides, volatile organic compounds and particulate matter.\n\n#### **\\_Other emissions (metric tons)**\n\n#### GRI 305-7\n\n|                    | 2023  |           |      | 2022  |           |      | 2021  |           |      |\n|--------------------|-------|-----------|------|-------|-----------|------|-------|-----------|------|\n| t                  | Total | Stainless | HPAs | Total | Stainless | HPAs | Total | Stainless | HPAs |\n| NOx                | 663   | 618       | 45   | 648   | 620       | 28   | 615   | 589       | 26   |\n| VOCs               | 15    | 15        | 0    | 32    | 32        | 0    | 27    | 27        | 0    |\n| Particulate matter | 191   | 191       | 0    | 280   | 280       | 0    | 424   | 424       | 0    |\n| SOx*               | 16    | 13        | 2    |       |           |      |       |           |      |\n\n\\*SOx emissions were reported in 2023 due to data availability.\n\n{250}------------------------------------------------\n\nImage /page/250/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters stacked vertically. The text is positioned to the left of a blue, incomplete circle that curves around the right side of the text. The circle is thick and has a consistent width.\n\n#### **\\_Energy consumption (GJ)**\n\nGRI 302-1\n\n| GJ                  | 2023       |            |           | 2022*      |            |           | 2021**     |            |           |\n|---------------------|------------|------------|-----------|------------|------------|-----------|------------|------------|-----------|\n|                     | Total      | Stainless  | HPAs      | Total      | Stainless  | HPAs      | Total      | Stainless  | HPAs      |\n| Natural gas         | 10,689,464 | 9,919,946  | 769,518   | 12,134,458 | 11,008,895 | 1,125,563 | 11,559,423 | 12,416,327 | 1,124,160 |\n| Diesel              | 172,124    | 159,676    | 12,447    | 204,111    | 190,814    | 13,297    | 167,291    | 182,558    | 12,649    |\n| Electricity         | 9,356,461  | 8,704,437  | 652,025   | 10,375,319 | 9,695,075  | 680,244   | 10,000,382 | 10,797,582 | 653,092   |\n| Total<br>consumptio | 20,218,049 | 18,784,059 | 1,433,990 | 22,713,888 | 20,894,784 | 1,819,104 | 21,727,096 | 23,396,467 | 1,789,901 |\n\n\\*In addition to natural gas, the natural gas data of the high-performance alloys division includes mixed gas.\n\n\\*\\*2021 data were corrected pursuant to the GHG Protocol.\n\n\\*\\*\\*Consumption data are from primary data (invoices) reported by the managers of each of the facilities. Only in the absence of primary data, will secondary data (internal information control records) will be considered.\n\n\\*\\*\\*\\*The net calorific value will be established based on validated and updated sources according to the location of the facilities. Additionally, if necessary, conversion factor(s) can be applied for the change of units.\n\n### **\\_Energy intensity (GJ/metric ton)**\n\nGRI 302-3\n\n| GJ/t      | 2023  |           |       | 2022  |           |       | 2021  |           |       |\n|-----------|-------|-----------|-------|-------|-----------|-------|-------|-----------|-------|\n|           | Total | Stainless | HPAs  | Total | Stainless | HPAs  | Total | Stainless | HPAs  |\n| Intensity | 9.44  | 9.41      | 23.80 | 9.39  | 8.94      | 22.09 | 8.83  | 8.43      | 22.91 |\n\n#### **\\_Electricity consumption (GJ)**\n\n| GJ                | 2023      |           |         | 2022       |           |         | 2021       |            |         |\n|-------------------|-----------|-----------|---------|------------|-----------|---------|------------|------------|---------|\n|                   | Total     | Stainless | HPAs    | Total      | Stainless | HPAs    | Total      | Stainless  | HPAs    |\n| Renewable         | 3,454,840 | 2,979,276 | 475,564 | 2,604,379  | 2,296,229 | 308,150 | 2,028,873  | 2,632,566  | 295,851 |\n| Non-<br>renewable | 5,901,621 | 5,725,160 | 176,461 | 7,770,938  | 7,398,845 | 372,093 | 7,971,508  | 8,165,016  | 357,241 |\n| Total             | 9,356,461 | 8,704,436 | 652,025 | 10,375,317 | 9,695,074 | 680,243 | 10,000,381 | 10,797,582 | 653,092 |\n\n{251}------------------------------------------------\n\nImage /page/251/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle partially surrounding the text. The circle is thicker at the top and tapers off towards the bottom.\n\n#### **Water**\n\nShortage areas: permanent deficit situation in relation to water demand in a regional water resource system, characterized by either an arid climate or a rapidly growing demand in consumption.\n\nNon-shortage areas: relates to the other facilities.\n\n#### **\\_Water withdrawal (ML)**\n\n#### GRI 303-3\n\n| ML                | Total |                    |                | Stainless          |                |                    | HPAs           |  |\n|-------------------|-------|--------------------|----------------|--------------------|----------------|--------------------|----------------|--|\n| 2023              | Total | Non-shortage areas | Shortage areas | Non-shortage areas | Shortage areas | Non-shortage areas | Shortage areas |  |\n| Surface water     | 6,364 | 3,877              | 2,487          | 3,557              | 2,487          | 320                | 0              |  |\n| Groundwater       | 0     | 0                  | 0              | 0                  | 0              | 0                  | 0              |  |\n| Seawater          | 0     | 0                  | 0              | 0                  | 0              | 0                  | 0              |  |\n| Process water     | 5     | 5                  | 0              | 5                  | 0              | 0                  | 0              |  |\n| Third-party water | 782   | 596                | 186            | 367                | 186            | 229                | 0              |  |\n| Rainwater         | 271   | 0                  | 271            | 0                  | 271            | 0                  | 0              |  |\n| Total             | 7,422 | 4,478              | 2,944          | 3,929              | 2,944          | 549                | 0              |  |\n\n\\*39.08% of the water withdrawn in 2023 comes from regions with high or extremely high water stress.\n\n| ML                | Total |                       |                   | Stainless             |                   |                       | HPAs              |  |  |\n|-------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|--|--|\n| 2022              | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |  |  |\n| Surface water     | 7,859 | 4,721                 | 3,138             | 4,313                 | 3,138             | 408                   | 0                 |  |  |\n| Groundwater       | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |  |  |\n| Seawater          | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |  |  |\n| Process water     | 7     | 7                     | 0                 | 7                     | 0                 | 0                     | 0                 |  |  |\n| Third-party water | 786   | 492                   | 294               | 287                   | 294               | 205                   | 0                 |  |  |\n| Rainwater         | 288   | 0                     | 288               | 0                     | 288               | 0                     | 0                 |  |  |\n| Total             | 8,940 | 5,220                 | 3,720             | 4,607                 | 3,720             | 613                   | 0                 |  |  |\n\n{252}------------------------------------------------\n\nImage /page/252/Picture/1 description: This image is a table that shows the amount of water used in 2021, broken down by source (Surface water, Groundwater, Seawater, Process water, Third-party water, and Rainwater) and by type of use (Total, Stainless, and HPAs). The table also shows the amount of water used in non-shortage areas and shortage areas. The total amount of water used in 2021 was 9,518. The amount of surface water used was 8,391. The amount of groundwater used was 0. The amount of seawater used was 0. The amount of process water used was 4. The amount of third-party water used was 903. The amount of rainwater used was 220.\n\n#### **\\_Water discharge (ML)**\n\nGRI 303-4\n\n| ML                | Total |                       |                   | Stainless             |                   |                       | HPAs              |  |\n|-------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|--|\n| 2023              | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |  |\n| Surface water     | 3,440 | 3,440                 | 0                 | 3,439                 | 0                 | 1                     | 0                 |  |\n| Groundwater       | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |  |\n| Seawater          | 1,121 | 0                     | 1,121             | 0                     | 1,121             | 0                     | 0                 |  |\n| Third-party water | 315   | 315                   | 0                 | 26                    | 0                 | 289                   | 0                 |  |\n| Total             | 4,876 | 3,755                 | 1,121             | 3,465                 | 1,121             | 290                   | 0                 |  |\n\n| ML                | Total |                       |                   | Stainless             |                   | HPAs                  |                   |\n|-------------------|-------|-----------------------|-------------------|-----------------------|-------------------|-----------------------|-------------------|\n| 2022              | Total | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas | Non-shortage<br>areas | Shortage<br>areas |\n| Surface water     | 4,105 | 4,105                 | 0                 | 4,044                 | 0                 | 61                    | 0                 |\n| Groundwater       | 0     | 0                     | 0                 | 0                     | 0                 | 0                     | 0                 |\n| Seawater          | 1,123 | 1                     | 1,122             | 0                     | 1,122             | 1                     | 0                 |\n| Third-party water | 264   | 264                   | 0                 | 34                    | 0                 | 230                   | 0                 |\n| Total             | 5,492 | 4,370                 | 1,122             | 4,078                 | 1,122             | 292                   | 0                 |\n\n{253}------------------------------------------------\n\nImage /page/253/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue circular shape. The blue circle is not fully closed, leaving a gap at the bottom right, giving it a dynamic, curved appearance. The overall design is clean and corporate, conveying a sense of strength and reliability.\n\n| ML                | Total |                           |                   | Stainless                 |                   | HPAs                      |                   |\n|-------------------|-------|---------------------------|-------------------|---------------------------|-------------------|---------------------------|-------------------|\n| 2021              | Total | Non-<br>shortage<br>areas | Shortage<br>areas | Non-<br>shortage<br>areas | Shortage<br>areas | Non-<br>shortage<br>areas | Shortage<br>areas |\n| Surface water     | 4,283 | 3,831                     | 452               | 3,770                     | 452               | 61                        | 0                 |\n| Groundwater       | 0     | 0                         | 0                 | 0                         | 0                 | 0                         | 0                 |\n| Seawater          | 1,397 | 0                         | 1,397             | 0                         | 1,397             | 0                         | 0                 |\n| Third-party water | 273   | 230                       | 43                | 0                         | 43                | 230                       | 0                 |\n| Total             | 5,953 | 4,061                     | 1,892             | 3,770                     | 1,892             | 291                       | 0                 |\n\n#### **\\_Water consumption (ML)**\n\nGRI 303-5\n\n| ML   | Total |                          |                   | Stainless                |                   | HPAs                     |                   |\n|------|-------|--------------------------|-------------------|--------------------------|-------------------|--------------------------|-------------------|\n|      | Total | Non<br>shortage<br>areas | Shortage<br>areas | Non<br>shortage<br>areas | Shortage<br>areas | Non<br>shortage<br>areas | Shortage<br>areas |\n| 2023 | 2,547 | 724                      | 1,823             | 465                      | 1,823             | 259                      | 0                 |\n| 2022 | 3,450 | 1,268                    | 2,182             | 946                      | 2,182             | 322                      | 0                 |\n| 2021 | 3,566 | 1,264                    | 2,302             | 942                      | 2,302             | 322                      | 0                 |\n\n{254}------------------------------------------------\n\nImage /page/254/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned to the left of a blue, crescent-shaped graphic. The crescent partially encircles the text, creating a circular or semi-circular design element.\n\n#### **Health & safety**\n\n#### **\\_Own personnel accident rate**\n\nGRI 403-9 and 403-10\n\n|                                                                                | 2023       |           |            | 2022       |           |            | 2021       |           |            |\n|--------------------------------------------------------------------------------|------------|-----------|------------|------------|-----------|------------|------------|-----------|------------|\n|                                                                                | Men        | Women     | Total      | Men        | Women     | Total      | Men        | Women     | Total      |\n| Hours worked                                                                   | 12,594,688 | 1,871,953 | 14,466,641 | 12,921,980 | 1,801,490 | 14,723,470 | 12,566,201 | 1,713,313 | 14,279,514 |\n| Total<br>accidents*                                                            | 120        | 10        | 130        | 125        | 3         | 128        | 195        | 4         | 199        |\n| Fatal<br>accidents                                                             | 0          | 0         | 0          | 0          | 0         | 0          | 1          | 0         | 1          |\n| Fatalities rate                                                                | 0          | 0         | 0          | 0          | 0         | 0          | 0.08       | 0         | 0.07       |\n| Accidents<br>with leave                                                        | 55         | 5         | 60         | 61         | 0         | 61         | 83         | 1         | 84         |\n| TRIR x<br>1,000,000**                                                          | 9.53       | 5.34      | 8.99       | 9.67       | 1.67      | 8.69       | 15.52      | 2.33      | 13.94      |\n| LTIFR x<br>1,000,000**                                                         | 4.37       | 2.67      | 4.15       | 4.72       | 0         | 4.14       | 6.61       | 0.58      | 5.88       |\n| Absenteeism<br>hours***                                                        | 790,770    | 123,681   | 914,451    | 668,476    | 104,554   | 773,030    | 646,021    | 58,415    | 704,436    |\n| Severity rate<br>= (no. of days<br>lost / no. of<br>hours<br>worked)*1,00<br>0 | 7.85       | 8.26      | 7.90       | 6.47       | 7.25      | 6.56       | 6.43       | 4.26      | 6.17       |\n| Abstenteesim<br>rate (%)                                                       | 6.28%      | 6.61%     | 6.32%      | 5.17%      | 5.80%     | 5.25%      | 5.14%      | 3.41%     | 4.93%      |\n| Work-related<br>illnesses                                                      | 7          | 0         | 7          | 0          | 0         | 0          | 0          | 0         | 0          |\n| Fatalities due<br>to work<br>related<br>illnesses                              | 0          | 0         | 0          | 0          | 0         | 0          | 0          | 0         | 0          |\n|                                                                                | 2023       |           |            | 2022       |           |            | 2021       |           |            |\n|                                                                                | Men        | Women     | Total      | Men        | Women     | Total      | Men        | Women     | Total      |\n| Hours worked                                                                   | 4,617,429  | 497,842   | 5,115,271  | 3,488,687  | 408,913   | 3,897,600  | 2,450,470  | 325,813   | 2,776,283  |\n| Total<br>accidents*                                                            | 22         | 3         | 25         | 50         | 7         | 57         | 117        | 4         | 121        |\n| Fatal<br>accidents                                                             | 0          | 0         | 0          | 0          | 0         | 0          | 1          | 0         | 1          |\n| Fatality rate                                                                  | 0          | 0         | 0          | 0          | 0         | 0          | 0.41       | 0         | 0.38       |\n| Accidents<br>with leave                                                        | 7          | 1         | 8          | 19         | 3         | 22         | 54         | 2         | 56         |\n| TRIR x<br>1,000,000**                                                          | 4.76       | 6.03      | 4.89       | 14.33      | 17.12     | 14.62      | 47.75      | 12.28     | 43.58      |\n| LTIFR x<br>1,000,000**                                                         | 1.52       | 2.01      | 1.56       | 5.45       | 7.34      | 5.64       | 22.04      | 6.14      | 20.17      |\n| Fatalities due<br>to work<br>related<br>illnesses                              | 0          | 0         | 0          | 0          | 0         | 0          | 0          | 0         | 0          |\n\n\\*There are no excluded workers.\n\n\\*\\* Data collected at BU level and consolidated at corporate level.\n\n{255}------------------------------------------------\n\nImage /page/255/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, black letters. To the right of the text is a blue circle that is open on the left side, partially obscuring the text.\n\n#### **\\_Accident rate of contractors\\*\\***\n\nGRI 403-9 and 403-10\n\n\\*Total accident data include fatalities, accidents with leave, restricted work cases and minor injuries. The severity index is not included.\n\n\\*\\* Data on contractor absenteeism and contractor occupational diseases are not recorded.\n\n#### \\_Health and safety management systems\\*\\*\n\n#### GRI 403-8\n\n|                                                                                | 2023   | 2022*  | 2021   |\n|--------------------------------------------------------------------------------|--------|--------|--------|\n| Number of employees covered by<br>a health and safety management<br>system     | 7,485  | 7,863  | 7,877  |\n| Percentage of employees covered<br>by a health and safety<br>management system | 90.96% | 95.55% | 95.72% |\n\n\\*Corrected data\n\n\\*\\*Data is only available for employees, not for contractors.\n\n{256}------------------------------------------------\n\n### **Workforce\\***\n\n#### **\\_Total employees at year-end**\n\n#### GRI 2-7\n\n| Acerinox<br>Europa<br>(Spain) | Acerinox<br>S.A.<br>(Spain) | Bahru<br>(Malaysia) | Columbus<br>(South<br>Africa) | Inoxfil<br>(Spain) | NAS (US) | Roldán<br>(Spain) | VDM<br>(Germany<br>/ US) | Subsidiarie<br>s and<br>Service | Total |\n|-------------------------------|-----------------------------|---------------------|-------------------------------|--------------------|----------|-------------------|--------------------------|---------------------------------|-------|\n| 1,746                         | 114                         | 427                 | 1,248                         | 96                 | 1,606    | 361               | 2,047                    | 584                             | 8,229 |\n\n\\*The staff figure in this Appendix does not include 10 members of senior management.\n\n#### **\\_Average number of employees during 2023**\n\nGRI 2-7\n\n| Acerinox<br>Europa<br>(Spain) | Acerinox<br>S.A. | Bahru | Columbus | Inoxfil | NAS   | Roldán | VDM   | Subsidiaries<br>and Service<br>centers |\n|-------------------------------|------------------|-------|----------|---------|-------|--------|-------|----------------------------------------|\n| 1,765                         | 108              | 418   | 1,260    | 98      | 1,614 | 365    | 2,028 | 571                                    |\n\n#### **\\_Number of employees by contract type and gender**\n\nGRI 2-7\n\n|                    |       | 2023  | 2022  | 2021  |\n|--------------------|-------|-------|-------|-------|\n| Permanent contract | Men   | 6,910 | 6,874 | 6,890 |\n|                    | Women | 1,065 | 1,007 | 998   |\n|                    | Total | 7,975 | 7,881 | 7,888 |\n| Temporary contract | Men   | 226   | 209   | 199   |\n|                    | Women | 28    | 34    | 41    |\n|                    | Total | 254   | 243   | 240   |\n| Total              |       | 8,229 | 8,124 | 8,128 |\n\n#### **\\_Number of employees by type of workday and gender**\n\nGRI 2-7\n\n|           |       | 2023  | 2022  | 2021  |\n|-----------|-------|-------|-------|-------|\n| Full time | Men   | 7,119 | 7,062 | 7,069 |\n|           | Women | 1,029 | 986   | 982   |\n|           | Total | 8,148 | 8,048 | 8,051 |\n| Part-time | Men   | 17    | 21    | 20    |\n|           | Women | 64    | 55    | 57    |\n|           | Total | 81    | 76    | 77    |\n| Total     |       | 8,229 | 8,124 | 8,128 |\n\n{257}------------------------------------------------\n\nImage /page/257/Picture/1 description: The image is a title that reads \"Number of employees by age range and gender\".\n\nGRI 2-7\n\n|              |              | 2023         | 2022         | 2021         |\n|--------------|--------------|--------------|--------------|--------------|\n| <30          | Men          | 816          | 835          | 852          |\n|              | Women        | 167          | 159          | 171          |\n|              | <b>Total</b> | <b>983</b>   | <b>994</b>   | <b>1,023</b> |\n| 30-50        | Men          | 4,006        | 4,061        | 4,167        |\n|              | Women        | 639          | 607          | 625          |\n|              | <b>Total</b> | <b>4,645</b> | <b>4,668</b> | <b>4,792</b> |\n| >50          | Men          | 2,314        | 2,187        | 2,070        |\n|              | Women        | 287          | 275          | 243          |\n|              | <b>Total</b> | <b>2,601</b> | <b>2,462</b> | <b>2,313</b> |\n| <b>Total</b> |              | 8,229        | 8,124        | 8,128        |\n\n#### **\\_Number of employees by professional category and gender**\n\n#### **GRI 2-7 / 405-1**\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 25    | 19    | 15    |\n|                      | Women | 7     | 5     | 4     |\n|                      | Total | 32    | 24    | 19    |\n| Manager              | Men   | 243   | 220   | 220   |\n|                      | Women | 49    | 49    | 45    |\n|                      | Total | 292   | 269   | 265   |\n| Analyst              | Men   | 624   | 570   | 572   |\n|                      | Women | 226   | 176   | 173   |\n|                      | Total | 850   | 746   | 745   |\n| Specialist           | Men   | 332   | 321   | 312   |\n|                      | Women | 118   | 138   | 129   |\n|                      | Total | 450   | 459   | 441   |\n| Administrative staff | Men   | 599   | 598   | 596   |\n|                      | Women | 476   | 458   | 471   |\n|                      | Total | 1,075 | 1,056 | 1,067 |\n| Operator             | Men   | 5,313 | 5,356 | 5,374 |\n|                      | Women | 217   | 214   | 217   |\n|                      | Total | 5,530 | 5,570 | 5,591 |\n| Total                |       | 8,229 | 8,124 | 8,128 |\n\n{258}------------------------------------------------\n\n#### **\\_Number of employees by type of contract and age range**\n\nGRI 2-7\n\n|                    |       | 2023         | 2022         | 2021         |\n|--------------------|-------|--------------|--------------|--------------|\n|                    | <30   | 859          | 872          | 902          |\n| Permanent contract | 30-50 | 4,528        | 4,555        | 4,685        |\n|                    | >50   | 2,587        | 2,454        | 2,301        |\n|                    | Total | <b>7,974</b> | <b>7,881</b> | <b>7,888</b> |\n| Temporary contract | <30   | 124          | 122          | 121          |\n|                    | 30-50 | 116          | 113          | 107          |\n|                    | >50   | 15           | 8            | 12           |\n|                    | Total | <b>255</b>   | <b>243</b>   | <b>240</b>   |\n| Total              |       | 8,229        | 8,124        | 8,128        |\n\n#### **\\_Number of employees by type of workday and age range**\n\n#### GRI 2-7\n\n|           |       | 2023  | 2022  | 2021  |\n|-----------|-------|-------|-------|-------|\n| Full time | <30   | 975   | 992   | 1,020 |\n|           | 30-50 | 4,586 | 4,611 | 4,736 |\n|           | >50   | 2,587 | 2,445 | 2,295 |\n|           | Total | 8,148 | 8,048 | 8,051 |\n| Part-time | <30   | 8     | 2     | 3     |\n|           | 30-50 | 58    | 57    | 56    |\n|           | >50   | 15    | 17    | 18    |\n|           | Total | 81    | 76    | 77    |\n| Total     |       | 8,229 | 8,124 | 8,128 |\n\n#### **\\_Number of employees by type of contract and professional category**\n\nGRI 2-7\n\n|                    |                      | 2023  | 2022  | 2021  |\n|--------------------|----------------------|-------|-------|-------|\n| Permanent contract | Director             | 32    | 24    | 19    |\n|                    | Manager              | 286   | 267   | 265   |\n|                    | Analyst              | 852   | 744   | 744   |\n|                    | Specialist           | 438   | 443   | 429   |\n|                    | Administrative staff | 1,035 | 1,027 | 1,042 |\n|                    | Operator             | 5,336 | 5,376 | 5,389 |\n|                    | Total                | 7,979 | 7,881 | 7,888 |\n| Temporary contract | Director             |       |       |       |\n|                    | Manager              | 7     | 2     |       |\n|                    | Analyst              |       | 2     | 1     |\n|                    | Specialist           | 7     | 16    | 12    |\n|                    | Administrative staff | 40    | 29    | 25    |\n|                    | Operator             | 196   | 194   | 202   |\n|                    | Total                | 250   | 243   | 240   |\n| Total              |                      | 8,229 | 8,124 | 8,128 |\n\n{259}------------------------------------------------\n\n#### **\\_Number of employees by type of workday and professional category**\n\n#### GRI 2-7\n\n|           |                      | 2023  | 2022  | 2021  |\n|-----------|----------------------|-------|-------|-------|\n| Full time | Director             | 31    | 24    | 19    |\n|           | Manager              | 293   | 269   | 265   |\n|           | Analyst              | 852   | 744   | 744   |\n|           | Specialist           | 444   | 450   | 433   |\n|           | Administrative staff | 1,022 | 1,011 | 1,019 |\n|           | Operator             | 5,507 | 5,550 | 5,571 |\n|           | Total                | 8,149 | 8,048 | 8,051 |\n| Part-time | Director             | 1     |       |       |\n|           | Manager              |       |       |       |\n|           | Analyst              | 4     | 2     | 1     |\n|           | Specialist           | 4     | 9     | 8     |\n|           | Administrative staff | 52    | 45    | 48    |\n|           | Operator             | 19    | 20    | 20    |\n|           | Total                | 80    | 76    | 77    |\n\n#### **Employment**\n\n#### **\\_New hires by age group and gender**\n\n|       |       | 2023  | 2022  | 2021  |\n|-------|-------|-------|-------|-------|\n| <30   | Men   | 646   | 808   | 437   |\n|       | Women | 138   | 218   | 136   |\n|       | Total | 784   | 1,026 | 573   |\n| 30-50 | Men   | 688   | 692   | 519   |\n|       | Women | 115   | 98    | 73    |\n|       | Total | 803   | 790   | 592   |\n| >50   | Men   | 49    | 42    | 33    |\n|       | Women | 7     | 11    | 8     |\n|       | Total | 56    | 53    | 41    |\n| Total |       | 1,643 | 1,869 | 1,206 |\n\n#### **\\_Hiring rate**\n\n#### GRI 401-1\n\n|       |       | 2023   | 2022    | 2021   |\n|-------|-------|--------|---------|--------|\n| <30   | Men   | 79.36% | 96.77%  | 51.29% |\n|       | Women | 84.66% | 137.11% | 79.53% |\n|       | Total | 80.25% | 103.22% | 56.01% |\n| 30-50 | Men   | 17.25% | 17.04%  | 12.46% |\n|       | Women | 18.37% | 16.14%  | 11.68% |\n|       | Total | 17.40% | 16.92%  | 12.35% |\n| >50   | Men   | 2.14%  | 1.92%   | 1.59%  |\n|       | Women | 2.55%  | 4.00%   | 3.29%  |\n|       | Total | 2.18%  | 2.15%   | 1.77%  |\n| Total |       | 20.00% | 23.01%  | 14.84% |\n\n{260}------------------------------------------------\n\nImage /page/260/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, positioned within a partial blue circle. The circle is open at the top and curves around the text, giving the impression of an enclosure or a stylized letter \"C\".\n\n#### **\\_Voluntary resignations**\n\n|       |       | 2023 | 2022 | 2021 |\n|-------|-------|------|------|------|\n| <30   | Men   | 136  | 139  | 100  |\n|       | Women | 19   | 27   | 12   |\n|       | Total | 155  | 166  | 112  |\n| 30-50 | Men   | 200  | 195  | 137  |\n|       | Women | 36   | 45   | 25   |\n|       | Total | 236  | 240  | 162  |\n| >50   | Men   | 30   | 57   | 42   |\n|       | Women | 6    | 12   | 11   |\n|       | Total | 36   | 69   | 53   |\n| Total |       | 427  | 475  | 327  |\n\n#### **\\_Staff turnover rate**\n\nGRI 401-1\n\n|       |       | 2023   | 2022   | 2021   |\n|-------|-------|--------|--------|--------|\n| <30   | Men   | 21.50% | 20.72% | 15.73% |\n|       | Women | 14.11% | 18.87% | 7.02%  |\n|       | Total | 20.27% | 20.42% | 14.27% |\n| 30-50 | Men   | 6.39%  | 6.28%  | 4.25%  |\n|       | Women | 6.87%  | 7.91%  | 4.32%  |\n|       | Total | 6.46%  | 6.49%  | 4.26%  |\n| >50   | Men   | 1.96%  | 6.22%  | 7.44%  |\n|       | Women | 3.64%  | 7.64%  | 9.47%  |\n|       | Total | 2.14%  | 6.38%  | 7.65%  |\n| Total |       | 6.75%  | 8.16%  | 6.49%  |\n\n#### **Layoffs**\n\n#### **\\_Number of layoffs by age range and gender**\n\n|       |       | 2023 | 2022 | 2021 |\n|-------|-------|------|------|------|\n| <30   | Men   | 39   | 34   | 34   |\n|       | Women | 4    | 3    | 3    |\n|       | Total | 43   | 37   | 34   |\n| 30-50 | Men   | 55   | 60   | 40   |\n|       | Women | 7    | 3    | 2    |\n|       | Total | 62   | 63   | 42   |\n| >50   | Men   | 15   | 15   | 67   |\n|       | Women | 4    | 3    | 2    |\n|       | Total | 19   | 18   | 69   |\n| Total |       | 124  | 118  | 145  |\n\n{261}------------------------------------------------\n\nImage /page/261/Picture/1 description: The image contains the title \"\\_Number of layoffs by professional category and gender\".\n\n|                      |       | 2023 | 2022 | 2021 |\n|----------------------|-------|------|------|------|\n| Director             | Men   |      |      |      |\n|                      | Women |      |      |      |\n|                      | Total | 0    | 0    | 0    |\n| Manager              | Men   |      | 3    |      |\n|                      | Women | 1    | 1    | 2    |\n|                      | Total | 1    | 4    | 2    |\n| Analyst              | Men   | 4    | 4    | 2    |\n|                      | Women |      |      |      |\n|                      | Total | 4    | 4    | 2    |\n| Specialist           | Men   | 6    | 2    | 3    |\n|                      | Women | 2    | 1    |      |\n|                      | Total | 8    | 3    | 3    |\n| Administrative staff | Men   | 2    | 1    | 6    |\n|                      | Women | 5    | 1    | 1    |\n|                      | Total | 7    | 2    | 7    |\n| Operator             | Men   | 96   | 99   | 130  |\n|                      | Women | 8    | 6    | 1    |\n|                      | Total | 104  | 105  | 131  |\n| Total                |       | 124  | 118  | 145  |\n\n#### **\\_Number of layoffs by age range and gender**\n\n|       |       | 2023 | 2022 | 2021 |\n|-------|-------|------|------|------|\n| <30   | Men   | 39   | 34   | 34   |\n|       | Women | 4    | 3    | 3    |\n|       | Total | 43   | 37   | 34   |\n| 30-50 | Men   | 55   | 60   | 40   |\n|       | Women | 7    | 3    | 2    |\n|       | Total | 62   | 63   | 42   |\n| >50   | Men   | 15   | 15   | 67   |\n|       | Women | 4    | 3    | 2    |\n|       | Total | 19   | 18   | 69   |\n| Total |       | 124  | 118  | 145  |\n\n{262}------------------------------------------------\n\n## **Training and performance \\_Number of employees trained**\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 15    | 13    | 6     |\n|                      | Women | 7     | 5     | 5     |\n|                      | Total | 22    | 18    | 11    |\n| Manager              | Men   | 147   | 205   | 159   |\n|                      | Women | 36    | 46    | 42    |\n|                      | Total | 183   | 251   | 201   |\n| Analyst              | Men   | 439   | 487   | 427   |\n|                      | Women | 166   | 167   | 134   |\n|                      | Total | 605   | 654   | 561   |\n| Specialist           | Men   | 203   | 248   | 188   |\n|                      | Women | 85    | 99    | 64    |\n|                      | Total | 288   | 347   | 252   |\n| Administrative staff | Men   | 277   | 428   | 382   |\n|                      | Women | 190   | 274   | 289   |\n|                      | Total | 467   | 702   | 671   |\n| Operator             | Men   | 4,016 | 4,098 | 3,517 |\n|                      | Women | 197   | 233   | 190   |\n|                      | Total | 4,213 | 4,331 | 3,707 |\n| Total                |       | 5,778 | 6,303 | 5,403 |\n\n#### **\\_Training hours**\n\n|                      |       | 2023    | 2022    | 2021    |\n|----------------------|-------|---------|---------|---------|\n| Director             | Men   | 119     | 92      | 95      |\n|                      | Women | 132     | 71      | 73      |\n|                      | Total | 251     | 163     | 168     |\n| Manager              | Men   | 3,381   | 5,150   | 4,469   |\n|                      | Women | 1,340   | 1,031   | 1,260   |\n|                      | Total | 4,721   | 6,181   | 5,729   |\n| Analyst              | Men   | 14,109  | 13,990  | 8,811   |\n|                      | Women | 4,043   | 5,292   | 2,459   |\n|                      | Total | 18,152  | 19,282  | 11,270  |\n| Specialist           | Men   | 6,116   | 6,378   | 3,207   |\n|                      | Women | 2,229   | 2,528   | 903     |\n|                      | Total | 8,345   | 8,906   | 4,110   |\n| Administrative staff | Men   | 6,892   | 10,244  | 7,851   |\n|                      | Women | 7,430   | 7,399   | 6,858   |\n|                      | Total | 14,322  | 17,643  | 14,709  |\n| Operator             | Men   | 522,069 | 395,500 | 372,473 |\n|                      | Women | 32,006  | 23,074  | 23,083  |\n|                      | Total | 554,075 | 418,574 | 395,556 |\n| Total                |       | 599,866 | 470,749 | 431,542 |\n\n{263}------------------------------------------------\n\n#### **\\_Average hours of training per employee**\n\n#### GRI 404-1\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 7.9   | 4.8   | 6.3   |\n|                      | Women | 18.9  | 14.2  | 18.3  |\n|                      | Total | 11.4  | 6.8   | 8.8   |\n| Manager              | Men   | 23.0  | 23.4  | 20.3  |\n|                      | Women | 37.2  | 21.0  | 28.0  |\n|                      | Total | 25.8  | 23.0  | 21.6  |\n| Analyst              | Men   | 32.1  | 24.5  | 15.4  |\n|                      | Women | 24.4  | 30.1  | 14.2  |\n|                      | Total | 30.0  | 25.9  | 15.1  |\n| Specialist           | Men   | 30.1  | 19.9  | 10.3  |\n|                      | Women | 1.0   | 18.3  | 7.0   |\n|                      | Total | 29.0  | 19.4  | 9.3   |\n| Administrative staff | Men   | 24.9  | 17.1  | 13.2  |\n|                      | Women | 39.1  | 16.2  | 14.6  |\n|                      | Total | 31.0  | 16.7  | 13.8  |\n| Operator             | Men   | 130.0 | 73.8  | 69.3  |\n|                      | Women | 162.5 | 107.8 | 106.4 |\n|                      | Total | 131.5 | 75.2  | 70.8  |\n| Total                |       | 73.5  | 58.0  | 53.1  |\n\n#### **\\_Number of employees who have received performance evaluations**\n\n|                      |       | 2023  | 2022  | 2021  |\n|----------------------|-------|-------|-------|-------|\n| Director             | Men   | 17    | 14    | 8     |\n|                      | Women | 5     | 5     | 4     |\n|                      | Total | 22    | 19    | 12    |\n| Manager              | Men   | 136   | 157   | 100   |\n|                      | Women | 34    | 40    | 33    |\n|                      | Total | 170   | 197   | 133   |\n| Analyst              | Men   | 413   | 297   | 253   |\n|                      | Women | 135   | 110   | 117   |\n|                      | Total | 548   | 407   | 370   |\n| Specialist           | Men   | 91    | 105   | 104   |\n|                      | Women | 55    | 43    | 44    |\n|                      | Total | 146   | 148   | 148   |\n| Administrative staff | Men   | 218   | 275   | 268   |\n|                      | Women | 139   | 164   | 173   |\n|                      | Total | 357   | 439   | 441   |\n| Operator             | Men   | 1,654 | 1,171 | 1,185 |\n|                      | Women | 84    | 80    | 69    |\n|                      | Total | 1,738 | 1,251 | 1,254 |\n| Total                |       | 2,981 | 2,461 | 2,358 |\n\n{264}------------------------------------------------\n\n#### **\\_% staff subject to performance evaluation**\n\n#### GRI 404-3\n\n|                      |       | 2023    | 2022    | 2021    |\n|----------------------|-------|---------|---------|---------|\n| Director             | Men   | 85.00%  | 77.78%  | 53.33%  |\n|                      | Women | 100.00% | 100.00% | 100.00% |\n|                      | Total | 88.00%  | 79.17%  | 63.16%  |\n| Manager              | Men   | 65.00%  | 75.48%  | 47.62%  |\n|                      | Women | 74.00%  | 85.11%  | 76.74%  |\n|                      | Total | 67.00%  | 73.23%  | 50.19%  |\n| Analyst              | Men   | 70.00%  | 54.90%  | 47.29%  |\n|                      | Women | 69.00%  | 67.90%  | 73.13%  |\n|                      | Total | 70.00%  | 54.56%  | 49.66%  |\n| Specialist           | Men   | 33.00%  | 38.32%  | 40.63%  |\n|                      | Women | 57.00%  | 41.75%  | 46.32%  |\n|                      | Total | 39.00%  | 32.24%  | 33.56%  |\n| Administrative staff | Men   | 38.00%  | 47.58%  | 46.21%  |\n|                      | Women | 36.00%  | 42.82%  | 42.61%  |\n|                      | Total | 37.00%  | 41.57%  | 41.33%  |\n| Operator             | Men   | 32.00%  | 22.33%  | 22.47%  |\n|                      | Women | 39.00%  | 37.56%  | 33.33%  |\n|                      | Total | 32.00%  | 22.46%  | 22.43%  |\n| Total                |       | 40.00%  | 30.29%  | 29.01%  |\n\n#### **Employee benefits**\n\n#### **\\_Parental leave**\n\nGRI 401-3\n\n|                                                                                                                                            |       | 2023  | 2022  | 2021  |\n|--------------------------------------------------------------------------------------------------------------------------------------------|-------|-------|-------|-------|\n| Employees who have been eligible for<br>parental leave                                                                                     | Men   | 5,802 | 6,267 | 6,214 |\n|                                                                                                                                            | Women | 875   | 823   | 818   |\n|                                                                                                                                            | Total | 6,677 | 7,090 | 7,032 |\n|                                                                                                                                            | Men   | 265   | 282   | 251   |\n| Employees who have taken parental<br>leave                                                                                                 | Women | 40    | 53    | 47    |\n|                                                                                                                                            | Total | 305   | 335   | 298   |\n| Employees who have returned to work<br>after parental leave has ended                                                                      | Men   | 263   | 280   | 242   |\n|                                                                                                                                            | Women | 38    | 37    | 35    |\n|                                                                                                                                            | Total | 301   | 317   | 277   |\n| Employees who have returned to work<br>after completing parental leave and<br>who were still employed 12 months<br>after returning to work | Men   | 249   | 241   | 237   |\n|                                                                                                                                            | Women | 35    | 32    | 33    |\n|                                                                                                                                            | Total | 284   | 273   | 270   |\n\n{265}------------------------------------------------\n\n#### **\\_Number of employees covered by collective bargaining agreements**\n\n#### GRI 2-30\n\n|                      | 2023                           |                                              |\n|----------------------|--------------------------------|----------------------------------------------|\n|                      | Employees subject to agreement | Percentage of employees subject to agreement |\n| Argentina            | 9                              | 100%                                         |\n| Australia            | 0                              | — %                                          |\n| Austria              | 4                              | 100%                                         |\n| Belgium              | 4                              | 50%                                          |\n| Brazil               | 2                              | 100%                                         |\n| Canada               | 0                              | — %                                          |\n| Chile                | 16                             | 100%                                         |\n| China                | 0                              | — %                                          |\n| Colombia             | 2                              | 100%                                         |\n| France               | 17                             | 100%                                         |\n| Germany              | 1,777                          | 97%                                          |\n| India                | 0                              | — %                                          |\n| Indonesia            | 0                              | — %                                          |\n| Italy                | 60                             | 100%                                         |\n| Japan                | 0                              | — %                                          |\n| Malaysia             | 180                            | 45%                                          |\n| Mexico               | 3                              | 100%                                         |\n| Peru                 | 2                              | 100%                                         |\n| Poland               | 24                             | 100%                                         |\n| Portugal             | 26                             | 100%                                         |\n| Singapore            | 1                              | 100%                                         |\n| South Africa         | 643                            | 53%                                          |\n| South Korea          | 0                              | — %                                          |\n| Spain                | 2,637                          | 99%                                          |\n| Sweden               | 24                             | 92%                                          |\n| Switzerland          | 3                              | 100%                                         |\n| Taiwan               | 0                              | — %                                          |\n| Thailand             | 0                              | — %                                          |\n| Turkey               | 0                              | — %                                          |\n| UK                   | 34                             | 100%                                         |\n| United Arab Emirates | 0                              | — %                                          |\n| United States        | 0                              | — %                                          |\n| Vietnam              | 0                              | — %                                          |\n\n{266}------------------------------------------------\n\nImage /page/266/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, colored in blue. The text is positioned inside a blue circle that is open on the right side, resembling a crescent shape. The overall design is simple and corporate.\n\n#### **\\_Reinstatement and retention rate**\n\n|                         |       | 2023   | 2022   | 2021   |\n|-------------------------|-------|--------|--------|--------|\n| Return to work rate     | Men   | 99.00% | 99.29% | 96.41% |\n|                         | Women | 95.00% | 69.81% | 74.47% |\n|                         | Total | 99.00% | 92.95% | 95.99% |\n| Employee retention rate | Men   | 87.00% | 85.46% | 94.42% |\n|                         | Women | 90.00% | 60.38% | 70.21% |\n|                         | Total | 88.00% | 92.95% | 95.99% |\n\n#### **Contractors \\_Number of contractors**\n\n|                 |       | 2023  | 2022  | 2021  |\n|-----------------|-------|-------|-------|-------|\n| Total workforce | Men   | 1,305 | 1,200 | 1,225 |\n|                 | Women | 236   | 216   | 211   |\n|                 | Total | 1,541 | 1,416 | 1,436 |\n\n#### **Remuneration and gap**\n\n#### **\\_Average compensation by professional category (EUR)**\n\n|                      | 2023        | 2022        | 2021        |\n|----------------------|-------------|-------------|-------------|\n| Director             | EUR 269,300 | EUR 308,121 | EUR 293,104 |\n| Manager              | EUR 144,188 | EUR 131,036 | EUR 119,063 |\n| Analyst              | EUR 73,836  | EUR 72,698  | EUR 68,035  |\n| Specialist           | EUR 58,221  | EUR 56,414  | EUR 49,143  |\n| Administrative staff | EUR 53,935  | EUR 51,493  | EUR 49,574  |\n| Operator             | EUR 50,615  | EUR 50,628  | EUR 47,865  |\n\n#### **\\_Average compensation by age range (EUR)**\n\n|       | 2023       | 2022       | 2021       |\n|-------|------------|------------|------------|\n| <30   | EUR 49,192 | EUR 44,791 | EUR 40,471 |\n| 30-50 | EUR 55,570 | EUR 53,589 | EUR 50,592 |\n| >50   | EUR 69,544 | EUR 66,050 | EUR 63,324 |\n\n#### **\\_Average remuneration by gender (EUR)**\n\n|       | 2023       | 2022       | 2021       |\n|-------|------------|------------|------------|\n| Men   | EUR 58,699 | EUR 56,784 | EUR 53,476 |\n| Women | EUR 53,317 | EUR 51,762 | EUR 48,133 |\n\n{267}------------------------------------------------\n\n#### **\\_Wage gap by professional category (%)**\n\n|                      | 2023   | 2022    | 2021   |\n|----------------------|--------|---------|--------|\n| Director             | 22.00% | -13.10% | -4.36% |\n| Manager              | 24.00% | 11.75%  | 5.31%  |\n| Analyst              | 25.00% | 12.89%  | 12.95% |\n| Specialist           | 22.00% | 5.99%   | 10.29% |\n| Administrative staff | 19.00% | 16.60%  | 17.21% |\n| Operator             | 12.00% | 15.39%  | 17.14% |\n\n#### **\\_Average base salary (EUR)**\n\n|                      | 2023        |             | 2022        |             | 2021        |             |\n|----------------------|-------------|-------------|-------------|-------------|-------------|-------------|\n|                      | Men         | Women       | Men         | Women       | Men         | Women       |\n| Director             | EUR 187,638 | EUR 160,164 | EUR 215,013 | EUR 156,961 | EUR 207,477 | EUR 148,538 |\n| Manager              | EUR 109,318 | EUR 87,818  | EUR 106,057 | EUR 88,026  | EUR 104,094 | EUR 84,637  |\n| Analyst              | EUR 68,709  | EUR 51,117  | EUR 67,320  | EUR 48,274  | EUR 65,055  | EUR 49,385  |\n| Specialist           | EUR 55,264  | EUR 44,124  | EUR 53,659  | EUR 41,713  | EUR 49,263  | EUR 38,058  |\n| Administrative staff | EUR 51,016  | EUR 41,610  | EUR 49,938  | EUR 40,632  | EUR 47,301  | EUR 39,134  |\n| Operator             | EUR 30,364  | EUR 26,608  | EUR 29,467  | EUR 25,984  | EUR 29,209  | EUR 23,929  |\n\n## **\\_Ratio of base female/male salary by professional category \\*\\***\n\n| GRI 405-2 |  |\n|-----------|--|\n|           |  |\n\n|                      | 2023 | 2022 | 2021 |\n|----------------------|------|------|------|\n| Director             | 0.85 | 1.08 | 1.00 |\n| Manager              | 0.80 | 0.92 | 0.96 |\n| Analyst              | 0.74 | 0.87 | 0.87 |\n| Specialist           | 0.79 | 0.95 | 0.90 |\n| Administrative staff | 0.82 | 0.87 | 0.87 |\n| Operator             | 0.88 | 0.88 | 0.85 |\n\n\\* Only those categories in which both genders are represented are included in the calculation of the gap\n\n{268}------------------------------------------------\n\n#### **6.3 Information regarding the European taxonomy**\n\n#### **Calculation of financial indicators**\n\nAcerinox has defined a procedure to facilitate the identification of the financial information to be reported associated with eligible activities and/or aligned with the EU Taxonomy. Specifically, the procedure assists in the reporting of:\n\n- **Quantitative information**: information on (1) revenue, (2) Capex and (3) Opex of sustainable and nonsustainable activities. (See table with breakdown of quantitative information.)\n- **Qualitative information**: qualitative information consists of three blocks: (1) accounting policies, which include the form and basis on which KPIs were determined, referring to the affected items in the NFIS; (2) compliance assessment, which involves an analysis of how the eligibility of activities has been identified, indicating the nature of the economic activities and explaining the conduct of the assessment of the criteria for eligibility. In addition, an explanation of how any double counting of the three key indicators has been avoided is included; and (3) contextual information, which involves a breakdown of each of the KPIs, identifying the items included in the calculation of each KPI.\n\nThe procedure for obtaining quantitative data follows the following sequence:\n\n- **1.** Identification of data to calculate indicators. Firstly, the necessary information is collected from the Acerinox Group's IT systems. This information is taken from the consolidated data closed in the corresponding year. It is extracted from the information in the consolidation program with the highest level of account detail, considering the consolidated financial statements.\n- **2.** Reconciliation with the annual accounts at heading level.\n- **3.** Selection of the accounts to be included in the calculation of the ratios. The sum of the income and expense accounts is taken from the consolidation application. The amounts relating to investments are taken from the table showing movement in property, plant and equipment in the notes to the annual accounts. For the preparation of the notes to the Group's annual accounts, consolidation packages are received from all companies with the disclosures required by the notes, including movements in property, plant and equipment. All packages are automatically uploaded into the spreadsheets for the notes and reconciled with the account balances.\n- **4.** Contribution per company to each of these accounts in order to exclude amounts corresponding to companies whose activities are not aligned. From the consolidation application, the contribution per company to the balances of the accounts selected in the previous section is extracted.\n- **5.** Calculation of the ratios.\n\t- **i.** Revenue: total revenue is the sum of the Group's consolidated revenue, as shown in the consolidated income statement of the financial statements. Revenue mainly reflects the Group's sales of stainless steel and special alloys,\n\nIn order to calculate revenue from eligible activities, the contribution to the consolidated figure by each of the companies in the consolidation perimeter is extracted from the Group's consolidation systems. Revenue from eligible activities is the aggregate sum of the contribution to consolidated revenue of the companies considered eligible, in accordance with the definition provided in Note 4.6\n\nTo calculate revenue from aligned activities, the consolidated sales figure corresponding to the products of each factory is extracted from the Group's management systems and reconciled with the consolidated revenue figure. Once reconciled, only the total sales of products manufactured by Acerinox Europa, North American Stainless, and Columbus would be included as revenue from aligned activities.\n\nImage /page/268/Picture/15 description: The image shows a close-up of a modern building's exterior. The building features a pattern of alternating dark and light panels, creating a striped effect. The dark panels appear to be recessed, casting shadows that add depth to the facade. Some windows are visible, reflecting a clear blue sky. The overall composition is abstract and emphasizes the geometric shapes and lines of the building's design.\n\n{269}------------------------------------------------\n\n**ii.** Capex: the Group's total Capex corresponds to its total investments in both tangible and intangible fixed assets. It is reported in the Group's consolidated financial statements and is disclosed in the Investments section of the Property, plant, and equipment note in these financial statements.\n\nTo calculate Capex pertaining to eligible activities, the contribution of each of the companies in the consolidation perimeter to the consolidated figure is extracted from the Group's consolidation systems, and the amounts of the investments corresponding to eligible entities are aggregated.\n\nThe Capex pertaining to aligned activities is calculated by multiplying the investment made by each of the companies considered eligible by the percentage contribution to the alignment. To calculate the contribution to the alignment of each entity, the sales of products manufactured by Acerinox Europa, North American Stainless, and Columbus are divided by the entity's total sales. This contribution percentage, calculated for each of the eligible entities, is used as the alignment contribution percentage.\n\n**iii.** Opex: to calculate total Opex, only the following items are taken into account from the total operating expenses in the consolidated financial statements: R&D expenses, maintenance, and operating leases. Total Opex is calculated as the sum of these three expense accounts, which are part of the consolidated Group's accounting plan and are identified in the consolidation program. In the memo note that includes the breakdown of operating expenses (Note 17.3), both the maintenance and lease totals are broken down; these are the two most significant categories, as the R&D expenses recorded as Opex are relatively insignificant.\n\nOpex pertaining to eligible activities corresponds to the aggregate sum of maintenance expenses, leasing expenses, and R&D expenses at the eligible companies. To calculate this figure, the contribution of each Group company to these three items is extracted from the consolidation systems and only those corresponding to the three aligned entities are added\n\nTo determine the Opex pertaining to aligned activities, the total expenses of each company considered eligible are multiplied by the percentage contribution to the alignment. The percentage contribution to the alignment is calculated as explained above.\n\nBy calculating the ratios based on data obtained from the consolidated financial statements, any possible double counting is avoided, since all intra-group transactions that could have an impact on two companies are eliminated beforehand in the consolidation process.\n\nThe variations in the ratios with respect to previous years are a consequence of the volume of activity at the Group's different plants to meet market demand.\n\n{270}------------------------------------------------\n\n#### **2023 Year Substantial contribution criteria Do no significant harm criteria**\n\n| Economic<br>activities (1)                                                                                                                                       | Code<br>(2) | Revenue<br>(3) | Proportion<br>of revenue,<br>year N (4) | Climate<br>change<br>mitigation<br>(5) | Climate<br>change<br>adaptation<br>(6) | Water (7) | Pollution<br>(8) | Circular<br>economy<br>(9) | Biodiversity<br>(10) | Climate<br>change<br>mitigation<br>(11) | Climate<br>change<br>adaptation<br>(12) | Water (13) | Pollution<br>(14) | Circular<br>economy<br>(15) | Biodiversity<br>(16) | Minimum<br>safeguards<br>(17) | Proportion<br>of revenue<br>conforming<br>to<br>taxonomy<br>(A.1) or<br>eligible<br>according<br>to<br>taxonomy<br>(A.2), year<br>2022 (18) | Facilitating<br>activity<br>category<br>(19) | Transitory<br>activity<br>category<br>(20) |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|----------------|-----------------------------------------|----------------------------------------|----------------------------------------|-----------|------------------|----------------------------|----------------------|-----------------------------------------|-----------------------------------------|------------|-------------------|-----------------------------|----------------------|-------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------------------------------|\n| Text                                                                                                                                                             |             | Currency       | %                                       | Y;N;N/EL                               | Y;N;N/EL                               | Y;N;N/EL  | Y;N;N/EL         | Y;N;N/EL                   | Y;N;N/EL             | Y/N                                     | Y/N                                     | Y/N        | Y/N               | Y/N                         | Y/N                  | Y/N                           | %                                                                                                                                           | F                                            | t                                          |\n| A. ELIGIBLE ACTIVITIES ACCORDING TO TAXONOMY                                                                                                                     |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| A.1 Environmentally sustainable activities (conforming to the taxonomy)                                                                                          |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Manufacture of<br>iron and steel<br>(CNAE 12.24)                                                                                                                 | CCM<br>3.9  | 4,662,750      | 70.6%                                   | Y                                      | N/EL                                   | N/EL      | N/EL             | N/EL                       | N/EL                 | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | 74.0%                                                                                                                                       | F                                            | t                                          |\n| Revenue from<br>environmentally<br>sustainable<br>activities<br>(conforming to<br>the taxonomy)<br>(A.1)                                                         |             | 4,662,750      | 70.6%                                   | 70.6%                                  | -%                                     | -%        | -%               | -%                         | -%                   | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | 74.0%                                                                                                                                       |                                              |                                            |\n| Of which:<br>facilitating                                                                                                                                        |             | 0              | -%                                      | -%                                     | -%                                     | -%        | -%               | -%                         | -%                   | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | -%                                                                                                                                          | F                                            |                                            |\n| Of which:<br>transitional                                                                                                                                        |             | 4,662,750      | 71%                                     | 71%                                    | -%                                     | -%        | -%               | -%                         | -%                   | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                    | Y                             | 74%                                                                                                                                         |                                              | t                                          |\n| A.2 Activities eligible under the taxonomy but not environmentally sustainable (activities that do not conform to the taxonomy)                                  |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n|                                                                                                                                                                  |             |                |                                         | EL; N/EL                               | EL; N/EL                               | EL; N/EL  | EL; N/EL         | EL; N/EL                   | EL; N/EL             |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Manufacture of<br>iron and steel<br>(CNAE 12.24)                                                                                                                 | CCM<br>3.9  | 489,688        | 7.4%                                    | EL                                     | N/EL                                   | N/EL      | N/EL             | N/EL                       | N/EL                 |                                         |                                         |            |                   |                             |                      |                               | 11.2%                                                                                                                                       |                                              |                                            |\n| Revenue from<br>taxonomy-<br>eligible but not<br>environmentally<br>sustainable<br>activities<br>(activities that do<br>not conform to<br>the taxonomy)<br>(A.2) |             | 489,688        | 7.4%                                    | 7.4%                                   | -%                                     | -%        | -%               | -%                         | -%                   |                                         |                                         |            |                   |                             |                      |                               | 11.2%                                                                                                                                       |                                              |                                            |\n| A. Revenue from<br>taxonomy<br>eligible activities<br>(A.1+A.2)                                                                                                  |             | 5,152,439      | 78.0%                                   | 78.0%                                  | -%                                     | -%        | -%               | -%                         | -%                   |                                         |                                         |            |                   |                             |                      |                               | 85.2%                                                                                                                                       |                                              |                                            |\n| B. NON-ELIGIBLE ACTIVITIES ACCORDING TO THE<br>TAXONOMY                                                                                                          |             |                |                                         |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Revenue from non-eligible<br>activities under the<br>taxonomy                                                                                                    |             | 1,455,539      | 22.0%                                   |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n| Total                                                                                                                                                            |             | 6,607,978      | 100%                                    |                                        |                                        |           |                  |                            |                      |                                         |                                         |            |                   |                             |                      |                               |                                                                                                                                             |                                              |                                            |\n\n{271}------------------------------------------------\n\n#### **Proportion of revenue/Total revenue**\n\n|                                                                 | Taxonomic alignment by target | Eligible taxonomy by target |\n|-----------------------------------------------------------------|-------------------------------|-----------------------------|\n| Climate change mitigation                                       | 70.6%                         | 78.0%                       |\n| Climate change adaptation                                       | 0%                            | 0%                          |\n| Sustainable use and protection of water and<br>marine resources | 0%                            | 0%                          |\n| Transition to a circular economy                                | 0%                            | 0%                          |\n| Pollution prevention and control                                | 0%                            | 0%                          |\n| Protection and restoration of biodiversity and<br>ecosystems    | 0%                            | 0%                          |\n\n{272}------------------------------------------------\n\n#### **\\_Capex**\n\n| 2023                                                                                           | Year       | Substantial contribution criteria |                                           |                                        |                                        |           | Do no significant harm criteria |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n|------------------------------------------------------------------------------------------------|------------|-----------------------------------|-------------------------------------------|----------------------------------------|----------------------------------------|-----------|---------------------------------|----------------------------|-----------------------|-----------------------------------------|-----------------------------------------|------------|----------------|-----------------------------|-----------------------|-------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------------------------------|\n| Economic activities (1)                                                                        | Code (2)   | Capex (3)                         | Proportio<br>n of<br>Capex,<br>year N (4) | Climate<br>change<br>mitigation<br>(5) | Climate<br>change<br>adaptation<br>(6) | Water (7) | Pollution (8)                   | Circular<br>economy<br>(9) | Biodiversit<br>y (10) | Climate<br>change<br>mitigation<br>(11) | Climate<br>change<br>adaptation<br>(12) | Water (13) | Pollution (14) | Circular<br>economy<br>(15) | Biodiversit<br>y (16) | Minimum<br>safeguards<br>(17) | Proportion<br>of revenue<br>conforming<br>to<br>taxonomy<br>(A.1) or<br>eligible<br>according<br>to<br>taxonomy<br>(A.2), year<br>2022 (18) | Facilitating<br>activity<br>category<br>(19) | Transitory<br>activity<br>category<br>(20) |\n| Text                                                                                           |            | Currency                          | %                                         | Y;N;N/EL                               | Y;N;N/EL                               | Y;N;N/EL  | Y;N;N/EL                        | Y;N;N/EL                   | Y;N;N/EL              | Y/N                                     | Y/N                                     | Y/N        | Y/N            | Y/N                         | Y/N                   | Y/N                           | %                                                                                                                                           | F                                            | t                                          |\n| A. ELIGIBLE ACTIVITIES ACCORDING TO TAXONOMY                                                   |            |                                   |                                           |                                        |                                        |           |                                 |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n| A.1 Environmentally sustainable activities (conforming to the taxonomy)                        |            |                                   |                                           |                                        |                                        |           |                                 |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n| Manufacture of iron<br>and steel (CNAE 12.24)                                                  | CCM<br>3.9 | 134,110                           | 76.7%                                     | Y                                      | N/EL                                   | N/EL      | N/EL                            | N/EL                       | N/EL                  | Y                                       | Y                                       | Y          | Y              | Y                           | Y                     | Y                             | 76%                                                                                                                                         | F                                            | t                                          |\n| Capex of<br>environmentally<br>sustainable activities<br>(conforming to the<br>taxonomy) (A.1) |            | 134,110                           | 76.7%                                     | 76.7%                                  | — %                                    | — %       | — %                             | — %                        | — %                   | Y                                       | Y                                       | Y          | Y              | Y                           | Y                     | Y                             | 76%                                                                                                                                         |                                              |                                            |\n| Of which: facilitating                                                                         |            | 0                                 | — %                                       | — %                                    | — %                                    | — %       | — %                             | — %                        | — %                   | Y                                       | Y                                       | Y          | Y              | Y                           | Y                     | Y                             | — %                                                                                                                                         | F                                            |                                            |\n|                                                                                                |            |                                   |                                           |                                        |                                        |           |                                 |                            |                       |                                         |                                         |            |                |                             |                       |                               |                                                                                                                                             |                                              |                                            |\n\nA.2 Activities eligible under the taxonomy but not environmentally sustainable (activities that do not conform to the taxonomy)\n\n| Manufacture of iron<br>and steel (CNAE 12.24) 3.9                                                                                               | CCM<br>1,156 | 0.7%  | EL    | N/EL | N/EL | N/EL | N/EL | N/EL | 4.9%  |\n|-------------------------------------------------------------------------------------------------------------------------------------------------|--------------|-------|-------|------|------|------|------|------|-------|\n| Capex of taxonomy-eligible but not<br>environmentally<br>sustainable activities<br>(activities that do not<br>conform to the<br>taxonomy) (A.2) | 1,156        | 0.7%  | 0.7%  | — %  | — %  | — %  | — %  | — %  | 4.9%  |\n| A.Capex of taxonomy-eligible activities<br>(A.1+A.2)                                                                                            | 135,266      | 77.4% | 77.4% | — %  | — %  | — %  | — %  | — %  | 80.9% |\n| B. NON-ELIGIBLE ACTIVITIES ACCORDING TO THE<br>TAXONOMY                                                                                         |              |       |       |      |      |      |      |      |       |\n| Capex of non-eligible activities<br>according to taxonomy                                                                                       | 39,519       | 22.6% |       |      |      |      |      |      |       |\n| Total                                                                                                                                           | 174,785      | 100%  |       |      |      |      |      |      |       |\n\nOf which: transitional 134,110 76.7% 76.7% — % — % — % — % — % Y Y Y Y Y Y Y 76% t\n\n{273}------------------------------------------------\n\n#### **Ratio of Capex / Total Capex**\n\n|                                                                 | Taxonomic alignment by target | Eligible taxonomy by target |\n|-----------------------------------------------------------------|-------------------------------|-----------------------------|\n| Climate change mitigation                                       | 76.7%                         | 77.4%                       |\n| Climate change adaptation                                       | 0%                            | 0%                          |\n| Sustainable use and protection of water and<br>marine resources | 0%                            | 0%                          |\n| Transition to a circular economy                                | 0%                            | 0%                          |\n| Pollution prevention and control                                | 0%                            | 0%                          |\n| Protection and restoration of biodiversity and<br>ecosystems    | 0%                            | 0%                          |\n\n{274}------------------------------------------------\n\n#### **\\_Opex**\n\n| 2023                                                                                                                                                                  | Year        | Substantial contribution criteria |                                      |                                        |                                        |           |                  | Do no significant harm criteria |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|-----------------------------------|--------------------------------------|----------------------------------------|----------------------------------------|-----------|------------------|---------------------------------|-----------------------|-----------------------------------------|-----------------------------------------|------------|-------------------|-----------------------------|-----------------------|-------------------------------|------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------------------------------------------|\n| Economic activities<br>(1)                                                                                                                                            | Code<br>(2) | Opex (3)                          | Proportion<br>of Opex,<br>year N (4) | Climate<br>change<br>mitigation<br>(5) | Climate<br>change<br>adaptation<br>(6) | Water (7) | Pollution<br>(8) | Circular<br>economy<br>(9)      | Biodiversit<br>y (10) | Climate<br>change<br>mitigation<br>(11) | Climate<br>change<br>adaptation<br>(12) | Water (13) | Pollution<br>(14) | Circular<br>economy<br>(15) | Biodiversit<br>y (16) | Minimum<br>safeguards<br>(17) | Proportion<br>of Opex<br>conforming<br>to<br>taxonomy<br>(A.1) or<br>taxonomy-<br>eligible<br>(A.2), year<br>2022 (18) | Facilitating<br>activity<br>category<br>(19) | Transitory<br>activity<br>category<br>(20) |\n| Text                                                                                                                                                                  |             | Currency                          | %                                    | Y;N;N/EL                               | Y;N;N/EL                               | Y;N;N/EL  | Y;N;N/EL         | Y;N;N/EL                        | Y;N;N/EL              | Y/N                                     | Y/N                                     | Y/N        | Y/N               | Y/N                         | Y/N                   | Y/N                           | %                                                                                                                      | F                                            | t                                          |\n| A. ELIGIBLE ACTIVITIES ACCORDING TO TAXONOMY                                                                                                                          |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| A.1 Environmentally sustainable activities (conforming to the taxonomy)                                                                                               |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Manufacture of iron<br>and steel (CNAE<br>12.24)                                                                                                                      | CCM<br>3.9  | 76,582                            | 87.4%                                | Y                                      | N/EL                                   | N/EL      | N/EL             | N/EL                            | N/EL                  | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | 75.0%                                                                                                                  | F                                            | t                                          |\n| Opex of<br>environmentally<br>sustainable<br>activities<br>(conforming to the<br>taxonomy) (A.1)                                                                      |             | 76,582                            | 87.4%                                | 87.4%                                  | 0%                                     | 0%        | 0%               | 0%                              | 0%                    | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | 75.0%                                                                                                                  |                                              |                                            |\n| Of which:<br>facilitating                                                                                                                                             |             | 0                                 | — %                                  | — %                                    | 0%                                     | 0%        | 0%               | 0%                              | 0%                    | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | — %                                                                                                                    | F                                            |                                            |\n| Of which:<br>transitional                                                                                                                                             |             | 76,582                            | 87%                                  | 87%                                    | — %                                    | 0         | 0                | 0                               | 0                     | Y                                       | Y                                       | Y          | Y                 | Y                           | Y                     | Y                             | 75%                                                                                                                    |                                              | t                                          |\n| A.2 Activities eligible under the taxonomy but not environmentally sustainable (activities that do not conform to the taxonomy)                                       |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n|                                                                                                                                                                       |             |                                   |                                      | EL; N/EL                               | EL; N/EL                               | EL; N/EL  | EL; N/EL         | EL; N/EL                        | EL; N/EL              |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Manufacture of iron<br>and steel (CNAE<br>12.24)                                                                                                                      | CCM<br>3.9  | 8,756                             | 10.0%                                | EL                                     | N/EL                                   | N/EL      | N/EL             | N/EL                            | N/EL                  |                                         |                                         |            |                   |                             |                       |                               | 5.2%                                                                                                                   |                                              |                                            |\n| Opex of eligible<br>activities according<br>to the taxonomy but<br>not environmentally<br>sustainable<br>(activities that do<br>not conform to the<br>taxonomy) (A.2) |             | 8,756                             | 10.0%                                | 10.0%                                  | — %                                    | — %       | — %              | — %                             | — %                   |                                         |                                         |            |                   |                             |                       |                               | 5.2%                                                                                                                   |                                              |                                            |\n| A. Opex of<br>taxonomy-eligible<br>activities (A.1+A.2)                                                                                                               |             | 85,338                            | 97.4%                                | 97.4%                                  | — %                                    | — %       | — %              | — %                             | — %                   |                                         |                                         |            |                   |                             |                       |                               | 80.4%                                                                                                                  |                                              |                                            |\n| B. NON-ELIGIBLE ACTIVITIES ACCORDING TO THE<br>TAXONOMY                                                                                                               |             |                                   |                                      |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Opex of non-eligible activities<br>according to taxonomy (B)                                                                                                          |             | 2,315                             | 2.6%                                 |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n| Total                                                                                                                                                                 |             | 87,653                            | 100%                                 |                                        |                                        |           |                  |                                 |                       |                                         |                                         |            |                   |                             |                       |                               |                                                                                                                        |                                              |                                            |\n\n{275}------------------------------------------------\n\n#### **Ratio of Opex / Total Opex**\n\n|                                                                 | Taxonomic alignment by target | Eligible taxonomy by target |\n|-----------------------------------------------------------------|-------------------------------|-----------------------------|\n| Climate change mitigation                                       | 87.4%                         | 97.4%                       |\n| Climate change adaptation                                       | 0%                            | 0%                          |\n| Sustainable use and protection of water and<br>marine resources | 0%                            | 0%                          |\n| Transition to a circular economy                                | 0%                            | 0%                          |\n| Pollution prevention and control                                | 0%                            | 0%                          |\n| Protection and restoration of biodiversity and<br>ecosystems    | 0%                            | 0%                          |\n\n{276}------------------------------------------------\n\n#### **\\_Nuclear and fossil gas related activities**\n\n| Row | Nuclear energy related activities                                                                                                                                                                                                                                                                                                             |    |\n|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|\n| 1   | The undertaking carries out, funds or has exposures to research, development,<br>demonstration and deployment of innovative electricity generation facilities that produce<br>energy from nuclear processes with minimal waste from the fuel cycle.                                                                                           | NO |\n| 2   | The undertaking carries out, funds or has exposures to construction and safe operation of<br>new nuclear installations to produce electricity or process heat, including for the purposes of<br>district heating or industrial processes such as hydrogen production, as well as their safety<br>upgrades, using best available technologies. | NO |\n| 3   | The undertaking carries out, funds or has exposures to safe operation of existing nuclear<br>installations that produce electricity or process heat, including for the purposes of district<br>heating or industrial processes such as hydrogen production from nuclear energy, as well as<br>their safety upgrades.                          | NO |\n|     | Fossil gas related activities                                                                                                                                                                                                                                                                                                                 |    |\n| 4   | The undertaking carries out, funds or has exposures to construction or operation of<br>electricity generation facilities that produce electricity using fossil gaseous fuels.                                                                                                                                                                 | NO |\n| 5   | The undertaking carries out, funds or has exposures to construction, refurbishment, and<br>operation of combined heat/cool and power generation facilities using fossil gaseous fuels.                                                                                                                                                        | NO |\n| 6   | The undertaking carries out, funds or has exposures to construction, refurbishment and<br>operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.                                                                                                                                                          | NO |\n\n{277}------------------------------------------------\n\n## **6.4 GRI table of contents**\n\nImage /page/277/Picture/2 description: The image features the logo of Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open on the left side, creating a crescent shape that curves around the text. The text is in a dark color, contrasting with the white background, while the circle is in a vibrant blue.\n\n| Statement of use                   |                                                                                     | Acerinox has reported in accordance<br>with the GRI Standards for the period<br>from January 1 to December 31, 2023.                                                                                                                   |\n|------------------------------------|-------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| GRI 1 used                         |                                                                                     | GRI 1: Foundation 2021                                                                                                                                                                                                                 |\n| Applicable GRI sector standards    |                                                                                     | n/a                                                                                                                                                                                                                                    |\n| GRI standard                       | Content                                                                             | Page / Reference                                                                                                                                                                                                                       |\n| General disclosures                |                                                                                     |                                                                                                                                                                                                                                        |\n|                                    | 2-1 Organizational details                                                          | Name of the organization: Acerinox<br>S.A. Registered office: Calle Santiago<br>de Compostela 100, 28035 Madrid,<br>Spain 10-16                                                                                                        |\n|                                    | 2-2 Entities included in the organization's<br>sustainability reporting             | 10-16                                                                                                                                                                                                                                  |\n|                                    | 2-3 Reporting period, frequency and contact<br>point                                | 2023 calendar year (January 1 to<br>December 31, 2023) The reporting<br>cycle is annual.<br>sustainability@acerinox.com                                                                                                                |\n|                                    | 2-4 Restatements of information                                                     | Data modified from previous years<br>includes an explanatory note.                                                                                                                                                                     |\n|                                    | 2-5 External assurance                                                              | The Acerinox Group engages an<br>independent third party to undertake<br>the external assurance of the report,<br>pursuant to International Standard on<br>Assurance Engagements (ISAE) 3000:<br>PricewaterhouseCoopers Auditores,S.L. |\n|                                    | 2-6 Activities, value chain and other<br>business relationships                     | 9-10; 14-16; 116-120                                                                                                                                                                                                                   |\n|                                    | 2-7 Employees                                                                       | 106-111, Appendix 6.2                                                                                                                                                                                                                  |\n| GRI 2: General Disclosures<br>2021 | 2-9 Governance structure and composition                                            | 5; 32-37                                                                                                                                                                                                                               |\n|                                    | 2-10 Nomination and selection of the<br>highest governance body                     | 32-37; 70                                                                                                                                                                                                                              |\n|                                    | 2-11 Chair of the highest governance body                                           | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-12 Role of the highest governance body in<br>overseeing the management of impacts | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-13 Delegation of responsibility for<br>managing impacts                           | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-14 Role of the highest governance body in<br>sustainability reporting             | 32-37; 63; 70                                                                                                                                                                                                                          |\n|                                    | 2-15 Conflicts of interest                                                          | 72-75                                                                                                                                                                                                                                  |\n|                                    | 2-16 Communication of critical concerns                                             | 72-75                                                                                                                                                                                                                                  |\n|                                    | 2-17 Collective knowledge of the highest<br>governance body                         | 32-37                                                                                                                                                                                                                                  |\n|                                    | 2-18 Evaluation of the performance of the<br>highest governance body                | 32; 70; Appendix 6.2                                                                                                                                                                                                                   |\n\n{278}------------------------------------------------\n\nImage /page/278/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, surrounded by a blue circle that is open on the right side.\n\n|                                            | 2-20 Process to determine remuneration                                                  | 32-37                   |\n|--------------------------------------------|-----------------------------------------------------------------------------------------|-------------------------|\n|                                            | 2-22 Statement on sustainable development<br>strategy                                   | 7-8; 63                 |\n|                                            | 2-23 Policy commitments                                                                 | Report-various sections |\n|                                            | 2-24 Embedding policy commitments                                                       | Report-various sections |\n| GRI 2: General Disclosures<br>2021         | 2-25 Processes to remediate negative<br>impacts                                         | 71-75                   |\n|                                            | 2-26 Mechanisms for seeking advice and<br>raising concerns                              | 71-75                   |\n|                                            | 2-27 Compliance with laws and regulations                                               | 71-75                   |\n|                                            | 2-28 Membership associations                                                            | 120-122                 |\n|                                            | 2-29 Approach to stakeholder engagement                                                 | 63-66                   |\n|                                            | 2-30 Collective bargaining agreements                                                   | 106-109; Appendix 6.2   |\n| Material topics                            |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-1 Process to determine material topics                                                | 63-65                   |\n|                                            | 3-2 List of material topics                                                             | 63                      |\n| Economic performance                       |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n|                                            | 201-1 Direct economic value generated and<br>distributed                                | 76-80                   |\n| GRI 201: Economic<br>performance 2016      | 201-2 Financial implications and other risks<br>and opportunities due to climate change | 82                      |\n|                                            | 201-4 Financial assistance received from<br>government                                  | 76-80                   |\n| Indirect economic impacts                  |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n| GRI 203: Indirect economic<br>impacts 2016 | 203-1 Infrastructure investments and<br>services supported                              | 103-104                 |\n|                                            | 203-2 Significant indirect economic impacts                                             | 103-104                 |\n| Procurement practices                      |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n| GRI 204: Procurement<br>Practices 2016     | 204-1 Proportion of spending on local<br>suppliers                                      | 118-120                 |\n| Anti-corruption                            |                                                                                         |                         |\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                       | 63-65                   |\n\n{279}------------------------------------------------\n\nImage /page/279/Picture/1 description: The image contains the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is positioned inside a white circle, which is partially surrounded by a thick, dark blue crescent shape. The crescent shape starts at the top right of the circle and extends around the bottom, ending at the top left of the circle.\n\n| GRI 205: Anti-corruption<br>2016 | 205-1 Operations assessed for risks related<br>to corruption                      | 100% of the Group is obliged to comply<br>with the anti-corruption guidelines.<br>Moreover, Acerinox is an adherent to<br>the principles of the United Nations<br>Global Compact. |\n|----------------------------------|-----------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n|                                  | 205-2 Communication and training about<br>anti-corruption policies and procedures | 71-75                                                                                                                                                                             |\n|                                  | 205-3 Confirmed incidents of corruption and<br>actions taken                      | No incidences of corruption were<br>registered in 2023.                                                                                                                           |\n\n#### **Anti-competitive behavior**\n\n| GRI 3: Material topics 2021                | 3-3 Management of material topics                                                        | 63-65                                                                                                                           |\n|--------------------------------------------|------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|\n| GRI 206: Anti-competitive<br>behavior 2016 | 206-1 Legal actions for anti-competitive<br>behavior, anti-trust, and monopoly practices | No significant legal actions for anti-<br>competitive behavior, anti-trust or<br>monopoly practices were registered in<br>2023. |\n\n#### **Taxation**\n\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n|                                                                         | 207-1 Approach to tax                                                                                                                                                                                   | 76-80                                                                                                                                                                                                                                                                                                          |\n| GRI 207: Tax 2019                                                       | 207-2 Tax governance, control, and risk<br>management                                                                                                                                                   | 76-80                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 207-3 Stakeholder engagement and<br>management of concerns related to tax                                                                                                                               | 76-80                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 207-4 Country-by-country reporting                                                                                                                                                                      | 76-80                                                                                                                                                                                                                                                                                                          |\n| Materials                                                               |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 301: Materials<br>2016                                              | 301-1 Materials used by weight or volume                                                                                                                                                                | 97-102, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n|                                                                         | 301-2 Recycled input materials used                                                                                                                                                                     | 97-102, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n| Energy                                                                  |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 302-1 Energy consumption within the<br>organization                                                                                                                                                     | 89-90, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 302: Energy 2016                                                    | 302-3 Energy intensity                                                                                                                                                                                  | 89-90, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 302-4 Reduction of energy consumption                                                                                                                                                                   | 89-90, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| Water and effluents                                                     |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 303: Water and<br>effluents 2018                                    | 303-1 Interactions with water as a shared<br>resource                                                                                                                                                   | 91-95                                                                                                                                                                                                                                                                                                          |\n| GRI 303: Water and<br>effluents 2018                                    | 303-2 Management of water discharge-related<br>impacts                                                                                                                                                  | 91-95                                                                                                                                                                                                                                                                                                          |\n| GRI 303: Water and<br>effluents 2018                                    | 303-3 Water withdrawal                                                                                                                                                                                  | 91-95, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 303: Water and<br>effluents 2018                                    | 303-4 Water discharge                                                                                                                                                                                   | 91-95, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 303: Water and<br>effluents 2018                                    | 303-5 Water consumption                                                                                                                                                                                 | 91-95, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| Biodiversity                                                            |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65, 96                                                                                                                                                                                                                                                                                                      |\n| Emissions                                                               |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 305-1 Direct (Scope 1) GHG emissions                                                                                                                                                                    | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 305-2 Energy indirect (Scope 2) GHG emissions                                                                                                                                                           | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 305-3 Other indirect (Scope 3) GHG emissions                                                                                                                                                            | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n| GRI 305: Emissions<br>2016                                              | 305-4 GHG emissions intensity                                                                                                                                                                           | 81-88, Appendix 6.2                                                                                                                                                                                                                                                                                            |\n|                                                                         | 305-5 Reduction of GHG emissions                                                                                                                                                                        | 81-88                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 305-7 Nitrogen oxides (NOx), sulfur oxides (SOx),<br>and other significant air emissions                                                                                                                | 81-88, 95, Appendix 6.2                                                                                                                                                                                                                                                                                        |\n| Waste                                                                   |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 306-1 Waste generation and significant waste-<br>related impacts                                                                                                                                        | 97-100                                                                                                                                                                                                                                                                                                         |\n|                                                                         | 306-2 Management of significant waste-related<br>impacts                                                                                                                                                | 97-100                                                                                                                                                                                                                                                                                                         |\n| GRI 306: Waste 2020                                                     | 306-3 Waste generated                                                                                                                                                                                   | 97-100, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n|                                                                         | 306-4 Waste diverted from disposal                                                                                                                                                                      | 97-100, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n|                                                                         | 306-5 Waste directed to disposal                                                                                                                                                                        | 97-100, Appendix 6.2                                                                                                                                                                                                                                                                                           |\n| Supplier environmental assessment                                       |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 308: Supplier<br>environmental<br>assessment 2016                   | 308-1 New suppliers that were screened using<br>environmental criteria                                                                                                                                  | 116-120                                                                                                                                                                                                                                                                                                        |\n| GRI 308: Supplier<br>environmental<br>assessment 2016                   | 308-2 Negative environmental impacts in the<br>supply chain and actions taken                                                                                                                           | No suppliers with significant negative<br>environmental impacts were identified in<br>the assessments carried out.                                                                                                                                                                                             |\n| Employment                                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 401: Employment<br>2016                                             | 401-1 New employee hires and employee<br>turnover                                                                                                                                                       | Appendix 6.2                                                                                                                                                                                                                                                                                                   |\n|                                                                         | 401-2 Benefits provided to full-time employees<br>that are not provided to temporary or part-time<br>employees                                                                                          | 106-109                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 401-3 Parental leave                                                                                                                                                                                    | 106-109, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Labor/management relations                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 402:<br>Labor/management<br>relations 2016                          | 402-1 Minimum notice periods regarding<br>operational changes                                                                                                                                           | The minimum notice periods are in line<br>with prevailing legislation and the<br>collective agreement for the steel<br>industry.                                                                                                                                                                               |\n| Occupational health and safety                                          |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         | 403-1 Occupational health and safety<br>management system                                                                                                                                               | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-2 Hazard identification, risk assessment, and<br>incident investigation                                                                                                                             | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-3 Occupational health services                                                                                                                                                                      | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-4 Worker participation, consultation, and<br>communication on occupational health and safety                                                                                                        | 112-115                                                                                                                                                                                                                                                                                                        |\n| GRI 403: Occupational<br>health and safety 2018                         | 403-5 Worker training on occupational health<br>and safety                                                                                                                                              | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-6 Promotion of worker health                                                                                                                                                                        | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-7 Prevention and mitigation of occupational<br>health and safety impacts directly linked by<br>business relationships                                                                               | 112-115                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 403-8 Workers covered by an occupational health<br>and safety management system                                                                                                                         | 112-115, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n|                                                                         | 403-9 Work-related injuries                                                                                                                                                                             | 112-115, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n|                                                                         | 403-10 Work-related ill health                                                                                                                                                                          | 112-115, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Training and education                                                  |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n|                                                                         |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 404: Training and<br>education 2016                                 | 404-1 Average hours of training per year per<br>employee                                                                                                                                                | 106-109, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n|                                                                         | 404-2 Programs for upgrading employee skills<br>and transition assistance programs                                                                                                                      | 106-109                                                                                                                                                                                                                                                                                                        |\n|                                                                         | 404-3 Percentage of employees receiving regular<br>performance and career development reviews                                                                                                           | 106-109, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Diversity and equal opportunity                                         |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 405: Diversity and<br>equal opportunity<br>2016                     | 405-1 Diversity of governance bodies and<br>employees                                                                                                                                                   | 5.110-111, Appendix 6.2                                                                                                                                                                                                                                                                                        |\n|                                                                         | 405-2 Ratio of basic salary and remuneration of<br>women to men                                                                                                                                         | 110-111, Appendix 6.2                                                                                                                                                                                                                                                                                          |\n| Non-discrimination                                                      |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 406: Non-<br>discrimination 2016                                    | 406-1 Incidents of discrimination and corrective<br>actions taken                                                                                                                                       | No incidents of discrimination were<br>registered in 2023.                                                                                                                                                                                                                                                     |\n| Freedom of association and collective bargaining                        |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 407: Freedom of<br>association and<br>collective bargaining<br>2016 | 407-1 Operations and suppliers in which the right<br>to freedom of association and collective<br>bargaining may be at risk                                                                              | No operations or suppliers in which the<br>right to freedom of association and<br>collective bargaining may be at risk have<br>been registered.                                                                                                                                                                |\n| Child labor                                                             |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 408: Child labor<br>2016                                            | 408-1 Operations and suppliers at significant risk<br>for incidents of child labor                                                                                                                      | The Group has not registered any<br>operations or suppliers at risk for<br>incidents of child labor. All Acerinox<br>Group companies support the effective<br>abolition of child labor. Acerinox is a<br>signatory of the United Nations Global<br>Compact.                                                    |\n| Forced or compulsory labor                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 409: Forced or<br>compulsory labor 2016                             | 409-1 Operations and suppliers at significant risk<br>for incidents of forced or compulsory labor                                                                                                       | The Group has not recognized any<br>operations or suppliers at significant risk<br>for incidents of forced or compulsory<br>labor. All Acerinox Group companies<br>support the elimination of all forms of<br>forced and compulsory labor. Acerinox is<br>a signatory of the United Nations Global<br>Compact. |\n| Local communities                                                       |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| Supplier social assessment                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 414: Supplier<br>social assessment<br>2016                          | 414-1 New suppliers that were screened using<br>social criteria<br><br>414-2 Negative social impacts in the supply chain<br>and actions taken                                                           | 116-120<br><br>No suppliers with significant negative<br>social impacts were identified in the<br>assessments carried out.                                                                                                                                                                                     |\n| Customer health and safety                                              |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 416: Customer<br>health and safety 2016                             | 416-1 Assessment of the health and safety<br>impacts of product and service categories<br><br>416-2 Incidents of non-compliance concerning<br>the health and safety impacts of products and<br>services | All factories face quality and<br>environmental controls, assessing all<br>possible health and safety impacts of the<br>products.<br><br>No significant incidents of non-<br>compliance concerning the health and<br>safety impacts of product and service<br>categories have been registered.                 |\n| Customer privacy                                                        |                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                |\n| GRI 3: Material topics<br>2021                                          | 3-3 Management of material topics                                                                                                                                                                       | 63-65                                                                                                                                                                                                                                                                                                          |\n| GRI 418: Customer<br>privacy 2016                                       | 418-1 Substantiated complaints concerning<br>breaches of customer privacy and losses of<br>customer data                                                                                                | No significant grievances related to<br>respect for customer privacy and losses<br>of customer personal data have been<br>recorded in the mechanisms in place.                                                                                                                                                 |\n\n{280}------------------------------------------------\n\nImage /page/280/Picture/1 description: The image contains the word \"ACERINOX\" in bold, white letters inside a blue circle. The circle is slightly offset to the right of the word.\n\n{281}------------------------------------------------\n\nImage /page/281/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right, giving it a crescent shape.\n\n{282}------------------------------------------------\n\nImage /page/282/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, with a blue circle partially surrounding the text. The text is positioned to the left of the circle, with the circle open on the left side.\n\n{283}------------------------------------------------\n\nImage /page/283/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, with the letters in a dark blue color. The word is enclosed within a partial circle, also in dark blue, that curves around the top and right side of the word. The background is white.\n\n{284}------------------------------------------------\n\nImage /page/284/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters slightly spaced apart. The word is enclosed within a circular shape, which appears to be a stylized representation of a globe or a ring. The color of the logo is a deep blue.\n\n## **6.5 SASB table of contents**\n\n#### **Contents and key metrics**\n\n| Topic                            | Contents and key metrics                                                                                                                                                                                                                                            | Category                   | Unit of<br>measurement                        | Code             | Page / Reference                                                                                                                                                                                                            |\n|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|-----------------------------------------------|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Greenhouse<br>gas<br>emissions   | Gross global Scope 1 emissions,<br>methane percentage, percentage<br>covered under emissions-limiting<br>regulations                                                                                                                                                | Quantitative               | Metric tons<br>(t) CO2e,<br>percentage<br>(%) | EM-IS-110a.1     | (1) 86-88, Appendix<br>6.2<br>(2) 0.006%<br>(3) 24.66% of Scope 1<br>emissions are<br>covered under<br>emissions-limiting<br>regulations                                                                                    |\n|                                  | Discussion of long-term and short-<br>term strategy or plan to manage<br>Scope 1 emissions, emissions<br>reduction targets, and an analysis<br>of performance against those<br>targets                                                                              | Discussion<br>and analysis | n/a                                           | EM-IS-110a.2     | 81-88                                                                                                                                                                                                                       |\n| Atmospheric<br>emissions         | Air emissions of the following<br>pollutants: (1) CO, (2) NOx<br>(excluding N2O), (3) SOx, (4)<br>particulate matter (PM10), (5)<br>manganese (MnO), (6) lead (Pb),<br>(7) volatile organic compounds<br>(VOCs), and (8) polycyclic aromatic<br>hydrocarbons (PAHs) | Quantitative               | Metric tons<br>(t)                            | EM-IS-120a.1     | 95                                                                                                                                                                                                                          |\n| Energy<br>management             | (1) Total energy consumed<br>(2) Percentage grid electricity<br>(3) Percentage renewable                                                                                                                                                                            | Quantitative               | Gigajoules<br>(GJ),<br>percentage<br>(%)      | EM-IS-130a.1     | (1 and 3) 89-90,<br>Appendix 6.2 (2)<br>100% grid electricity                                                                                                                                                               |\n|                                  | (1) Total fuel consumed<br>(2) Percentage coal<br>(3) Percentage natural gas<br>(4) Percentage renewable                                                                                                                                                            | Quantitative               | Gigajoules<br>(GJ),<br>percentage<br>(%)      | EM-IS-<br>130a.2 | (1.3 and 4) 89-90,<br>Appendix 6.2<br>The Group does not<br>consume coal                                                                                                                                                    |\n| Water<br>management              | (1) Total fresh water withdrawn<br>(2) Percentage recycled<br>(3) Percentage in regions with high<br>or extremely high baseline water<br>stress                                                                                                                     | Quantitative               | Percentage<br>(%)                             | EM-IS-140a.1     | (1) The entire water<br>withdrawal is fresh<br>water (total dissolved<br>solids ≤ 1,000 mg/l)<br>(2) The group is<br>working to report the<br>percentage of water<br>that is recycled.<br>(3) 39.08% 91-95,<br>Appendix 6.2 |\n| Waste<br>management              | Amount of waste generated, percentage hazardous, percentage recycled                                                                                                                                                                                                | Quantitative               | Metric tons (t), percentage (%)               | EM-IS-150a.1     | 98-100, Appendix 6.2                                                                                                                                                                                                        |\n| Employee<br>health and<br>safety | (1) Total recordable incident rate (TRIR)<br>(2) Fatality rate<br>(3) Near miss frequency rate (NMFR) for (a) full-time employees and (b) contract employees                                                                                                        | Quantitative Ratio         |                                               | EM-IS-320a.1     | 112-116, Appendix 6.2                                                                                                                                                                                                       |\n| Supply chain<br>management       | Discussion of the process for managing iron ore and/or coking coal sourcing risks arising from environmental and social issues                                                                                                                                      | Discussion and analysis    | n/a                                           | EM-IS-430a.1     | Not applicable                                                                                                                                                                                                              |\n\n{285}------------------------------------------------\n\nImage /page/285/Picture/1 description: The image features the logo of Acerinox, a stainless steel manufacturing company. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a partial blue circle. The circle is open at the top, creating a crescent shape that frames the company name. The blue color of the circle is a deep, saturated hue, providing a strong contrast against the white background. The overall design is clean and corporate, conveying a sense of professionalism and reliability.\n\n#### **Activity metrics**\n\n| Activity metrics                                                                                                    | Category     | Unit of<br>measurement                   | Code        | Page / Reference                                                                                                                                                                            |\n|---------------------------------------------------------------------------------------------------------------------|--------------|------------------------------------------|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Raw steel production, percentage from: (1) basic<br>oxygen furnace processes, (2) electric arc furnace<br>processes | Quantitative | Metric tons<br>(t),<br>percentage<br>(%) | EM-IS-000.A | (1) Not applicable<br>(2) 39<br>1,869,417 t. The<br>facilities with electric<br>arc are Acerinox<br>Europa, NAS and<br>Columbus,<br>accounting for<br>96.08% of melting<br>shop production. |\n| Total iron ore production                                                                                           | Quantitative | Metric tons<br>(t)                       | EM-IS-000.B | 0                                                                                                                                                                                           |\n| Total coking coal production                                                                                        | Quantitative | Metric tons<br>(t)                       | EM-IS-000.C | 0                                                                                                                                                                                           |\n\n{286}------------------------------------------------\n\nImage /page/286/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned inside a blue circle. The circle is not fully closed, with a gap at the bottom right, giving it a crescent shape.\n\n## **6.6 TCFD table of contents**\n\n| Area                | Recommended TCFD disclosures                                                                                                                                      | Page / Reference |\n|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|\n| Governance          | a) Describe the board's oversight of climate-related<br>risks and opportunities                                                                                   | 81-85            |\n|                     | b) Describe management's role in assessing and<br>managing climate-related risks and opportunities                                                                | 81-85            |\n| Strategy            | a) Describe the climate-related risks and opportunities<br>the organization has identified over the short,<br>medium, and long term                               | 82-84            |\n|                     | b) Describe the impact of climate-related risks and<br>opportunities on the organization's businesses,<br>strategy, and financial planning                        | 82-84            |\n|                     | c) Describe the resilience of the organization's<br>strategy, taking into consideration different climate<br>related scenarios, including a 2°C or lower scenario | 81-86            |\n| Risk management     | a) Describe the organization's processes for identifying<br>and assessing climate-related risks                                                                   | 81-86            |\n|                     | b) Describe the organization's processes for managing<br>climate-related risks                                                                                    | 81-86            |\n|                     | c) Describe how processes for identifying, assessing,<br>and managing climate-related risks are integrated into<br>the organization's overall risk management     | 81-86            |\n| Metrics and targets | a) Disclose the metrics used by the organization to<br>assess climate-related risks and opportunities in line<br>with its strategy and risk management process    | 81-86            |\n|                     | b) Disclose Scope 1, Scope 2, and, if appropriate,<br>Scope 3 greenhouse gas (GHG) emissions, and the<br>related risks                                            | 86-88, 95        |\n|                     | c) Describe the targets used by the organization to<br>manage climate-related risks and opportunities and<br>performance against targets                          | 66, 81-95        |\n\n{287}------------------------------------------------\n\nImage /page/287/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word \"ACERINOX\" is in a lighter color, possibly white or light gray, which contrasts with the darker blue of the circle.\n\n## **6.7 NFIS table of contents**\n\n| Information required by the Non-financial<br>Information Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Associated reporting criteria<br>(GRI Standard)                                               | Page / Reference     |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|----------------------|\n| Finance model                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                               |                      |\n| Taxonomy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Regulation (EU) 2020/852                                                                      | 56-62, Appendix 6.3  |\n| Business model                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                               |                      |\n| Brief description of the Group's business model<br>(business environment and organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2-1 Organizational details                                                                    | 13-18                |\n| Geographical presence                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 2-2 Entities included in the<br>organization's sustainability<br>reporting                    | 10-16                |\n| Organization's objectives and strategies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics                                                          | 5-16, 24-27          |\n| Key factors and trends that could affect future<br>performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3-3 Management of material<br>topics                                                          | 19-23                |\n| Environmental topics                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                               |                      |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                               |                      |\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics                                                          | 63-65, 81-82, 85, 97 |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated and allowing<br>for comparisons to be drawn between companies<br>and industries, in line with the benchmark national,<br>European or international frameworks used for each<br>topic.                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics                                                          | 66-67                |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 201-2 Financial implications<br>and other risks and<br>opportunities due to climate<br>change | 85-87                |\n| Actual and foreseeable effects of the Company's<br>activities on the environment and, as the case may<br>be, health and safety                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 201-2 Financial implications<br>and other risks and<br>opportunities due to climate<br>change | 85-87                |\n| Environmental assessment or certification<br>procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 3-3 Management of material<br>topics                                                          | 81-95                |\n| Resources allocated to preventing environmental<br>risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics                                                          | 81-95                |\n| Application of the precautionary principle                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 3-3 Management of material<br>topics                                                          | 82                   |\n| Amount of provisions and guarantees for<br>environmental risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3-3 Management of material<br>topics                                                          | 82                   |\n| Pollution                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                               |                      |\n\n{288}------------------------------------------------\n\nImage /page/288/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a sans-serif font, enclosed within a blue circle. The word \"ACERINOX\" is also in blue.\n\nMeasures to prevent, reduce or remedy emissions seriously affecting the environment, factoring in any specific form of atmospheric pollution of an activity, GHG emissions including noise and light pollution\n\n3-3 Management of material topics. 305-5 Reduction of 86-88\n\n**Circular economy and waste prevention and management**\n\n| Measures for the prevention, recycling, reuse and<br>other recovery and disposal of waste. Actions to<br>combat food waste                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>306-2 Management of<br>significant waste-related<br>impacts<br>306-3 Waste generated<br>306-4 Waste diverted from<br>disposal<br>306-5 Waste directed to<br>disposal | 97-100, Appendix 6.2<br>Given the nature of the<br>Group's business, food waste<br>is not a material issue. |\n|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|\n| Water consumption and supply in accordance with<br>local limitations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 303-1 Interactions with water<br>as a shared resource<br>303-2 Management of water<br>discharge-related impacts<br>303-3 Water withdrawal<br>303-4 Water discharge<br>303-5 Water consumption                | 91-95, Appendix 6.2                                                                                         |\n| Consumption of raw materials and measures<br>implemented to improve the efficiency of their use                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 301-1 Materials used by<br>weight or volume                                                                                                                                                                  | 97-102, Appendix 6.2                                                                                        |\n| Direct and indirect energy consumption                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 3-3 Management of material<br>topics<br>302-1 Energy consumption<br>within the organization                                                                                                                  | 89-90, Appendix 6.2                                                                                         |\n| Measures taken to improve energy efficiency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 3-3 Management of material<br>topics<br>302-4 Reduction of energy<br>consumption                                                                                                                             | 89-90                                                                                                       |\n| Use of renewable energies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 302-1 Energy consumption<br>within the organization                                                                                                                                                          | 89-90                                                                                                       |\n| Climate change                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                              |                                                                                                             |\n| The key elements of the greenhouse gas emissions<br>generated as a result of the Company's activities,<br>including the use of the goods and services it<br>produces.                                                                                                                                                                                                                                                                                                                                                                                                           | 305-1 Direct (Scope 1) GHG<br>emissions<br>305-2 Energy indirect (Scope<br>2) GHG emissions<br>305-3 Other indirect (Scope<br>3) GHG emissions                                                               | 81, 86-88, 95                                                                                               |\n| Measures taken to adapt to the consequences of<br>climate change.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 3-3 Management of material<br>topics                                                                                                                                                                         | 81-96                                                                                                       |\n| Voluntary medium- and long-term greenhouse gas<br>reduction targets and the measures in place to<br>achieve them.                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 305-5 Reduction of GHG<br>emissions                                                                                                                                                                          | 86-88                                                                                                       |\n| Biodiversity protection                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                              |                                                                                                             |\n| Measures taken to preserve or restore biodiversity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 3-3 Management of material<br>topics                                                                                                                                                                         | 96                                                                                                          |\n| Impacts caused by activities or operations in<br>protected areas.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 3-3 Management of material<br>topics                                                                                                                                                                         | 96                                                                                                          |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                              |                                                                                                             |\n| A description of the policies applied by the Group with regard to these topics, which shall include the due diligence procedures implemented to identify, assess, prevent and mitigate significant risks and impacts, and assurance and control procedures, including the measures taken.                                                                                                                                                                                                                                                                                       | 3-3 Management of material topics                                                                                                                                                                            | 106-115                                                                                                     |\n| The results of such policies, including the pertinent non-financial key performance indicators, enabling progress to be monitored and evaluated and allowing for comparisons to be drawn between companies and industries, in line with the benchmark national, European or international frameworks used for each topic.                                                                                                                                                                                                                                                       | 3-3 Management of material topics                                                                                                                                                                            | 106-115                                                                                                     |\n| The main risks in relation to such topics as regards the Group's activities, including, where pertinent and appropriate, its commercial relations, products or services that may have an adverse impact on such areas, and how the Group manages such risks, explaining the procedures used to detect and assess them in line with the benchmark national, European or international frameworks used for each topic. Information on any impacts detected must be included, providing a breakdown thereof, particularly as regards the main short-, medium- and long-term risks. | 3-3 Management of material topics                                                                                                                                                                            | 106-115                                                                                                     |\n| Employment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                              |                                                                                                             |\n| Total number and distribution of employees based on diversity criteria (gender, age, country, etc.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2-7 Employees<br>405-1 Diversity of governance bodies and employees                                                                                                                                          | 106-111, Appendix 6.2                                                                                       |\n| Total number and distribution of types of employment contract, average annual number of permanent, temporary and part-time contracts by gender, age and professional category                                                                                                                                                                                                                                                                                                                                                                                                   | 2-7 Employees                                                                                                                                                                                                | 106-111, Appendix 6.2                                                                                       |\n| Number of layoffs by gender, age and professional category                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 3-3 Management of material topics                                                                                                                                                                            | 106-111, Appendix 6.2                                                                                       |\n| Average remuneration and trends therein, broken down by gender, age and professional category or similar                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 405-2 Ratio of basic salary and remuneration of women to men<br>3-3 Management of material topics                                                                                                            | 106-111, Appendix 6.2                                                                                       |\n| Wage gap, remuneration of like positions or average<br>remuneration in the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 405-2 Ratio of basic salary<br>and remuneration of women<br>to men                                                                                                                                           | Appendix 6.2                                                                                                |\n| Average remuneration of board members and<br>management, including variable remuneration,<br>allowances, indemnities, payments into long-term<br>savings schemes and any other amounts received,<br>disaggregated by gender                                                                                                                                                                                                                                                                                                                                                     | 2-19 Remuneration policies                                                                                                                                                                                   | 32-37                                                                                                       |\n| Implementation of policies on disconnecting from<br>work                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 3-3 Management of material<br>topics                                                                                                                                                                         | 106-111                                                                                                     |\n| Employees with disabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 405-1 Diversity of governance<br>bodies and employees                                                                                                                                                        | 106-111                                                                                                     |\n| Organization of work                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                              |                                                                                                             |\n| Organization of working time                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 3-3 Management of material<br>topics                                                                                                                                                                         | 112-115, Appendix 6.2                                                                                       |\n| Absenteeism hours                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 403-9 Work-related injuries                                                                                                                                                                                  | 112-115, Appendix 6.2                                                                                       |\n| Measures aimed at facilitating a work-life balance<br>and encouraging the sharing of responsibilities<br>between both parents                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 401-3 Parental leave                                                                                                                                                                                         | 106-111                                                                                                     |\n| Health and safety                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                              |                                                                                                             |\n\n{289}------------------------------------------------\n\n#### **Sustainable use of resources**\n\nImage /page/289/Picture/2 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in bold, sans-serif font, positioned inside a blue circle that is open on the left side. The text is slightly offset to the left within the circle.\n\n{290}------------------------------------------------\n\nImage /page/290/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned within a blue circle. The circle is not fully closed, with a gap at the bottom right. The word \"ACERINOX\" is also in blue, matching the color of the circle.\n\n#### **Social and employee-related topics**\n\n{291}------------------------------------------------\n\nImage /page/291/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, positioned to the left of a blue, crescent-shaped graphic. The crescent appears to encircle the text, adding a sense of enclosure and emphasis to the brand name.\n\n| Occupational health and safety conditions | 403-1 Occupational health<br>and safety management<br>system<br>403-2 Hazard identification,<br>risk assessment, and incident<br>investigation<br>403-3 Occupational health<br>services<br>403-4 Worker participation,<br>consultation, and<br>communication on<br>occupational health and<br>safety<br>403-5 Worker training on<br>occupational health and<br>safety<br>403-6 Promotion of worker<br>health<br>403-7 Prevention and<br>mitigation of occupational<br>health and safety impacts<br>directly linked<br>by business relationships<br>403-8 Workers covered by an<br>occupational health and<br>safety management system | 112-115 |\n|-------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|\n|-------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|\n\n{292}------------------------------------------------\n\nImage /page/292/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in blue, sans-serif font, enclosed within a blue circle. The word is centered within the circle.\n\n| Occupational accidents, in particular with regard to<br>their frequency and severity, and occupational<br>illnesses, disaggregated by gender.                                                                      | 403-9 Work-related injuries<br>403-10 Work-related ill health                                                                  | 112-115, Appendix 6.2 |\n|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|-----------------------|\n| Organization of social dialogue, including procedures<br>for notifying, consulting and negotiating with staff                                                                                                      | 3-3 Management of material<br>topics                                                                                           | 110-116               |\n| Percentage of employees covered by collective<br>bargaining agreements, by country                                                                                                                                 | 2-30 Collective bargaining<br>agreements                                                                                       | Appendix 6.2          |\n| Balance of collective bargaining agreements,<br>particularly in the field of occupational health and<br>safety                                                                                                     | 2-30 Collective bargaining<br>agreements                                                                                       | Appendix 6.2          |\n| Mechanisms and procedures that the company has in<br>place to promote the involvement of workers in its<br>management, in terms of information, consultation<br>and participation                                  | 3-3 Management of material<br>topics                                                                                           | 106-109, 112-115      |\n| Training policies in place                                                                                                                                                                                         | 3-3 Management of material<br>topics. 404-2 Programs for<br>upgrading employee skills and<br>transition assistance<br>programs | 106-111               |\n| Total hours of training by employee category                                                                                                                                                                       | 404-1 Average hours of<br>training per year per<br>employee                                                                    | 106-111, Appendix 6.2 |\n| Universal accessibility for people with disabilities                                                                                                                                                               | 3-3 Management of material<br>topics                                                                                           | 106-111               |\n| Measures taken to promote equal treatment and<br>opportunities for men and women                                                                                                                                   | 3-3 Management of material<br>topics                                                                                           | 110-111               |\n| Equality plans (Chapter III of Organic Law 3/2007 of<br>March 22 for effective gender equality), measuressexual and gender-based harassment, inclusion and<br>universal accessibility for people with disabilities | 3-3 Management of material<br>topics                                                                                           | 110-111               |\n| Policy on non-discrimination and, as the case may<br>be, diversity management                                                                                                                                      | 3-3 Management of material<br>topics                                                                                           | 110-111               |\n\n{293}------------------------------------------------\n\n#### **Respect for human rights**\n\nImage /page/293/Picture/2 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is partially encircled by a thick, dark blue ring that starts from the top right of the \"A\" and curves around the word, ending near the bottom right of the \"X\". The background is white.\n\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                          |           |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics<br>408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor<br>409-1 Operations and<br>suppliers at significant risk for<br>incidents of forced or<br>compulsory labor | 72-73, 75 |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated, and<br>allowing for comparisons to be drawn between<br>companies and industries, in line with the benchmark<br>national, European or international frameworks used<br>for each topic                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor<br>409-1 Operations and<br>suppliers at significant risk for<br>incidents of forced or<br>compulsory labor | 72-73, 75 |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 3-3 Management of material<br>topics<br>408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor<br>409-1 Operations and<br>suppliers at significant risk for<br>incidents of forced or<br>compulsory labor | 72-73, 75 |\n| Detailed information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                          |           |\n| Implementation of due diligence procedures in<br>relation to human rights, prevention of risks of abuse<br>of human rights and, as the case may be, measures<br>to mitigate, manage and redress any potential<br>abuses committed                                                                                                                                                                                                                                                                                                                                                                                | 2-26 Mechanisms for seeking<br>advice and raising concerns                                                                                                                                                                               | 72-73, 75 |\n| Reported human rights violations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 3-3 Management of material<br>topics                                                                                                                                                                                                     | 72-73, 75 |\n\n{294}------------------------------------------------\n\nImage /page/294/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word is in a darker shade of blue than the circle.\n\n| Promotion of and compliance with the provisions of<br>the fundamental conventions of the International<br>Labor Organization as regards respect for freedom of<br>association and the right to collective bargaining; the<br>elimination of discrimination in employment and<br>occupation; the elimination of forced or compulsory<br>labor; and the effective abolition of child labor                                                                                                                                                                                                                         | 3-3 Management of material<br>topics. 408-1 Operations and<br>suppliers at significant risk for<br>incidents of child labor. 409-1<br>Operations and suppliers at<br>significant risk for incidents of<br>forced or compulsory labor | 72-73, 75, 117                                                                                                                                                                                                                                                                                                                                                                            |\n|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|\n| Action to combat corruption and bribery                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics<br>205-2 Communication and<br>training about anti-corruption<br>policies and procedures                                                                                                         | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated and allowing<br>for comparisons to be drawn between companies<br>and industries, in line with the benchmark national,<br>European or international frameworks used for each<br>topic.                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>205-2 Communication and<br>training about anti-corruption<br>policies and procedures                                                                                                         | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 3-3 Management of material<br>topics                                                                                                                                                                                                 | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| Detailed information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Measures taken to prevent corruption and bribery                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 3-3 Management of material<br>topics. 205-1 Operations<br>assessed for risks related to<br>corruption 205-2<br>Communication and training<br>about anti-corruption policies<br>and procedures                                        | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Anti-money laundering measures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3-3 Management of material<br>topics                                                                                                                                                                                                 | 71-75                                                                                                                                                                                                                                                                                                                                                                                     |\n| Contributions to foundations and not-for-profit<br>organizations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 201-1 Direct economic value<br>generated and distributed                                                                                                                                                                             | 76–, 120-123                                                                                                                                                                                                                                                                                                                                                                              |\n| Information about the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| General disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| A description of the policies applied by the Group<br>with regard to these topics, which shall include the<br>due diligence procedures implemented to identify,<br>assess, prevent and mitigate significant risks and<br>impacts, and assurance and control procedures,<br>including the measures taken.                                                                                                                                                                                                                                                                                                         | 3-3 Management of material<br>topics<br>2-23 Policy commitments                                                                                                                                                                      | Several chapters                                                                                                                                                                                                                                                                                                                                                                          |\n| The results of such policies, including the pertinent<br>non-financial key performance indicators, enabling<br>progress to be monitored and evaluated and allowing<br>for comparisons to be drawn between companies<br>and industries, in line with the benchmark national,<br>European or international frameworks used for each<br>topic.                                                                                                                                                                                                                                                                      | 3-3 Management of material<br>topics<br>2-23 Policy commitments                                                                                                                                                                      | Several chapters                                                                                                                                                                                                                                                                                                                                                                          |\n| The main risks in relation to such topics as regards<br>the Group's activities, including, where pertinent and<br>appropriate, its commercial relations, products or<br>services that may have an adverse impact on such<br>areas, and how the Group manages such risks,<br>explaining the procedures used to detect and assess<br>them in line with the benchmark national, European<br>or international frameworks used for each topic.<br>Information on any impacts detected must be<br>included, providing a breakdown thereof, particularly<br>as regards the main short-, medium- and long-term<br>risks. | 2-3 Risk management<br>3-3 Management of material<br>topics                                                                                                                                                                          | 28-31<br>71-75                                                                                                                                                                                                                                                                                                                                                                            |\n| Company commitments to sustainable development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Impact of the Company's activity on local<br>employment and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 3-3 Management of material<br>topics. 204-1 Proportion of<br>spending on local suppliers                                                                                                                                             | 116-122                                                                                                                                                                                                                                                                                                                                                                                   |\n| Impact of the Company's activity on the local<br>populations and area                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 204-1 Proportion of spending<br>on local suppliers<br>413-1 Operations with local<br>community engagement,<br>impact assessments, and<br>development programs                                                                        | 116-122                                                                                                                                                                                                                                                                                                                                                                                   |\n| Relations with local community stakeholders and the<br>nature of engagement therewith.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 2-29 Approach to stakeholder<br>engagement 413-1 Operations<br>with local community<br>engagement, impact<br>assessments, and<br>development programs                                                                                | 65, 116-122                                                                                                                                                                                                                                                                                                                                                                               |\n| Association and sponsorship actions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2-28 Membership<br>associations 3-3 Management<br>of material topics                                                                                                                                                                 | 116-122                                                                                                                                                                                                                                                                                                                                                                                   |\n| Subcontractors and suppliers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Inclusion in the procurement policy of social, gender-<br>equality and environmental issues                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 414-1 New suppliers that<br>were screened using social<br>criteria. 3-3 Management of<br>material topics                                                                                                                             | 116-120                                                                                                                                                                                                                                                                                                                                                                                   |\n| Attention given to social and environmental<br>responsibility in relations with suppliers and<br>subcontractors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2-6 Activities, value chain<br>and other business<br>relationships<br>308-1 New suppliers that<br>were screened using<br>environmental criteria<br>414-1 New suppliers that<br>were screened using social<br>criteria                | 116-120                                                                                                                                                                                                                                                                                                                                                                                   |\n| Oversight and audit systems and results thereof                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2-6 Activities, value chain<br>and other business<br>relationships. 308-2 Negative<br>environmental impacts in the<br>supply chain and actions<br>taken 414-2 Negative social<br>impacts in the supply chain<br>and actions taken    | 116-120                                                                                                                                                                                                                                                                                                                                                                                   |\n| Consumer health and safety measures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 3-3 Management of material<br>topics. 416-1 Assessment of<br>the health and safety impacts<br>of product and service<br>categories                                                                                                   | 102, 112-115                                                                                                                                                                                                                                                                                                                                                                              |\n| Grievance mechanisms, complaints received and<br>resolution thereof                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 3-3 Management of material<br>topics<br>418-1 Substantiated<br>complaints concerning<br>breaches of customer privacy<br>and losses of customer data                                                                                  | Throughout 2023, 4,850<br>claims were received, of<br>which 3,967 were resolved<br>and 883 were still in the<br>process of being finalized at<br>year-end. No claims have<br>been received regarding<br>breaches of customer privacy<br>or loss of data. Additionally,<br>this is the first year in which<br>this indicator is reported, so<br>no comparative information is<br>provided. |\n| Tax-related information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                           |\n| Profits obtained by country                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 207-4 Country-by-country<br>reporting                                                                                                                                                                                                | 76-80                                                                                                                                                                                                                                                                                                                                                                                     |\n| Corporate income tax paid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 207-4 Country-by-country<br>reporting                                                                                                                                                                                                | 76-80                                                                                                                                                                                                                                                                                                                                                                                     |\n| Government subsidies received                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 201-4 Financial assistance<br>received from government                                                                                                                                                                               | 76-80                                                                                                                                                                                                                                                                                                                                                                                     |\n\n{295}------------------------------------------------\n\nImage /page/295/Picture/1 description: The image shows the Acerinox logo. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters arranged in a slightly curved manner. The text is positioned inside a blue circle.\n\n{296}------------------------------------------------\n\nImage /page/296/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, with the letters in a dark blue color. The word is positioned to the left of a circular shape, also in dark blue, that partially encloses the word. The circular shape appears to be a stylized representation of a ring or a globe.\n\n{297}------------------------------------------------\n\n**Consumers**\n\nImage /page/297/Picture/1 description: The image shows the logo for Acerinox. The logo consists of the word \"ACERINOX\" in a bold, sans-serif font, enclosed within a blue circle. The word is in a lighter shade of blue than the circle.\n\n{298}------------------------------------------------\n\nImage /page/298/Picture/1 description: The image shows the Acerinox logo. The logo is a blue circle with the word \"ACERINOX\" in bold, black letters inside the circle.\n\n## **6.8 External assurance report**\n\n{299}------------------------------------------------\n\nImage /page/299/Picture/0 description: The image features the word \"ACERINOX\" in bold, white letters against a purple background. A white, crescent-shaped graphic partially encircles the word, adding a design element to the composition. Below the word and crescent, there is a short, horizontal orange line.\n\n**[www.acerinox.com](https://www.acerinox.com/es/index.html)**\n\n**175**\n\n{300}------------------------------------------------\n\nImage /page/300/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several squares and rectangles in shades of red, orange, and yellow, arranged in a stacked, slightly offset manner, creating a sense of depth and layering.\n\nIndependent verification report Consolidated Non-Financial Information Statement 31 December 2023\n\n{301}------------------------------------------------\n\nImage /page/301/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font, positioned to the left of a graphic element. The graphic element is composed of several overlapping squares and rectangles in shades of orange and yellow, creating a layered, abstract design.\n\n*This version of our report is a free translation of the original, which was prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.*\n\n## Independent verification report\n\nTo the shareholders of Acerinox, S.A.:\n\nPursuant to article 49 of the Code of Commerce, we have verified, with the scope of a limited assurance engagement, the Consolidated Non-Financial Information Statement ('NFIS') for the year ended 31 December 2023 of Acerinox, S.A. (Parent company) and subsidiaries (hereinafter Acerinox Group or the Group) which forms part of the accompanying Integrated Annual Report (hereinafter Annual Report), included in the Acerinox Group's consolidated management report.\n\nThe content of the Annual Report includes information additional to that required by current mercantile legislation in relation to non-financial information, which has not been covered by our verification work. In this respect, our work was limited solely to verifying the information identified in 'GRI Table of Contents', 'SASB Table of contents' and the 'NFIS Table of contents' included in the accompanying Annual Report.\n\n#### Responsibility of the administrators and directors of the Parent company\n\nThe preparation of the NFIS included in Acerinox Group's consolidated management report and the content thereof, are the responsibility of the administrators and directors of Acerinox, S.A. The NFIS has been drawn up in accordance with the provisions of current mercantile legislation and in accordance with the criteria of the Sustainability Reporting Standards of the Global Reporting Initiative ('GRI Standards') as well as the Sustainability and Accounting Standards Board (SASB) 'Iron & Steel Producers' industry Standard version 2018-10 selected, described as per the details provided for each matter in the tables 'GRI table of Contents', 'SASB table of contents' and the 'NFIS table of contents' of the Annual Report.\n\nThis responsibility also includes the design, implementation and maintenance of the internal control considered necessary to allow the NFIS to be free of material misstatement due to fraud or error.\n\nThe administrators and directors of Acerinox, S.A. is also responsible for defining, implementing, adapting and maintaining the management systems from which the information required to prepare the NFIS is obtained.\n\n#### Our independence and quality management\n\nWe have complied with the independence requirements and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code of Ethics) which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.\n\n*PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400,* www.pwc.es 1\n\n{302}------------------------------------------------\n\nImage /page/302/Picture/0 description: The image shows the logo for PwC. The logo consists of the letters \"pwc\" in black, sans-serif font. Above and to the right of the letters is a graphic element composed of overlapping squares in shades of red, orange, and yellow.\n\nOur firm applies International Standard on Quality Management (ISQM) 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.\n\nThe engagement team consisted of professionals specialising in Non-financial Information reviews, specifically in information on economic, social and environmental performance.\n\n#### Our responsibility\n\nOur responsibility is to express our conclusions in a limited assurance independent report based on the work we have performed. We carried out our work in accordance with the requirements laid down in the current International Standard on Assurance Engagements (ISAE) 3000 Revised, Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000 Revised) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) and in the Guidelines for verification engagements of the Statement of Non-Financial Information issued by the Spanish Institute of Auditors ('Instituto de Censores Jurados de Cuentas de España').\n\nIn a limited assurance engagement, the procedures performed vary in nature and timing of execution, and are less extensive, than those carried out in a reasonable assurance engagement and accordingly, the assurance provided is also lower.\n\nOur work consisted of posing questions to management as well as to the various units of Acerinox Group that were involved in the preparation of the NFIS, of the review of the processes for compiling and validating the information presented in the NFIS, and in the application of certain analytical procedures and review procedures on a sample basis, as described below:\n\n- Meetings with the Acerinox, S.A. personnel to understand the business model, policies and management approaches applied, principal risks relating to these matters and to obtain the information required for the external review.\n- Analysis of the scope, relevance and integrity of the content of the NFIS for the year 2023, based on the materiality analysis carried out by Acerinox Group and described in section 'Materiality Analysis', taking into account the content required by current mercantile legislation.\n- Analysis of the procedures used to compile and validate the information presented in the NFIS for the year 2023.\n- Review of information relating to risks, policies and management approaches applied in relation to material matters presented in the NFIS for the year 2023.\n- Verification, by means of sample testing, of the information relating to the content of the NFIS for the year 2023 and that it was adequately compiled using data provided by the sources of the information.\n- Obtaining a management representation letter from the and management of the Parent company.\n\n{303}------------------------------------------------\n\nImage /page/303/Picture/0 description: The image shows the logo for PwC, a multinational professional services network. The logo consists of the lowercase letters \"pwc\" in a bold, sans-serif font. Above and to the right of the letters is a graphic element composed of several overlapping squares and rectangles in shades of red, orange, and yellow. The squares and rectangles are arranged in a way that creates a sense of depth and dimension.\n\n#### Conclusion\n\nBased on the procedures performed in our verification and the evidence we have obtained, nothing has come to our attention that causes us to believe that the NFIS of Acerinox, S.A. and its subsidiaries, for the year ended 31 December 2023 has not been prepared, in all material respects, in accordance with the provisions of current mercantile legislation and in accordance with the criteria of GRI as well as the Sustainability and Accounting Standards Board (SASB) 'Iron & Steel Producers' industry Standard version 2018-10 selected, described as per the details provided for each matter in the 'GRI Table of Contents', 'SASB Table of contents' and the 'NFIS Table of contents' of the aforementioned Annual Report.\n\n#### Emphasis of matter\n\nRegulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 relating to the establishment of a framework to facilitate sustainable investments, as well as the Delegated Acts promulgated in accordance with the provisions of the aforementioned Regulation, establish the obligation to disclose information on the manner and extent to which the company's activities are associated with eligible economic activities in relation to the environmental objectives of sustainable use and protection of water and marine resources, transition to a circular economy, prevention and control of pollution and protection and restoration of biodiversity and ecosystems (the rest of the environmental objectives), and with respect to certain new activities included in the objectives of mitigation and adaptation to climate change, for the first time for the 2023 financial year, in addition to the information referring to eligible and aligned activities already required in the 2022 financial year in relation to the objectives of climate change mitigation and climate change adaptation. Consequently, comparative information on eligibility in relation to the rest of the environmental objectives indicated above or on new activities included in the objectives of climate change mitigation and climate change adaptation, has not been included in the accompanying NFIS. Furthermore, to the extent that the information relating to the 2022 financial year was not required with the same level of detail as in the 2023 financial year, the information disclosed in the accompanying NFIS is not strictly comparable either. In addition, it should be noted that Acerinox, S.A.'s administrators and directors have incorporated information on the criteria that, in their opinion, allow for improved compliance with the aforementioned obligations and which have been defined in the sections '4.6 European taxonomy on sustainable finance' and '6.3 Information regarding the European taxonomy' of the accompanying NFIS. Our conclusion has not been modified in relation to this matter.\n\n#### Use and distribution\n\nThis report has been drawn up in response to the requirement established in current Spanish mercantile legislation and therefore may not be suitable for other purposes and jurisdictions.\n\nPricewaterhouseCoopers Auditores, S.L.\n\nOriginal in Spanish signed by Margarita de Rosselló Carril\n\n29 February 2024",
    "taxonomy_data": {
        "activities": [
            "Manufacture of iron and steel",
            "Flood risk prevention and protection infrastructure",
            "Collection and transport of non-hazardous and hazardous waste",
            "Preparation for re-use of end-of-life products and product components"
        ]
    }
}