LTP Annual Sustainability Performance Report 2023

Read about LTP's commitment to Sustainability and see our data and results from 2023

2022

Sustainability Performance Report 2023

1

Content

LTP AT A GLANCE - UNLOCK TRANSPARENCY

SOCIAL – CARE FOR PEOPLE Our approach..................................................................................................................................... 35 Towards diversity, inclusion & equity..................................................................................... 36 Diversity........................................................................................................................................... 37 Gender Pay Ratio........................................................................................................................ 38 Employees...................................................................................................................................... 39 Living Wages................................................................................................................................. 40 Health & safety.................................................................................................................................. 42 Lost Time Injury Frequency.................................................................................................... 43 GOVERNANCE - RESPONSIBLE BUSINESS CONDUCT Governance - Responsible Business Conduct..................................................................... 44 Compliance Program.................................................................................................................. 45 Whistle blower hotline............................................................................................................... 46 Governance & Reports............................................................................................................... 47 Code of Conduct........................................................................................................................... 48 Protection of human and labor rights................................................................................ 50 Responsible business partner management................................................................... 51 Responsible supplier management...................................................................................... 52

Letter from Executive Management.............................................................................. 4 Sustainability at a glance - Global overview............................................................... 5 Our strategy................................................................................................................................6 Stakeholder engagement.................................................................................................... 9 Governance................................................................................................................................. 10 We are LTP ................................................................................................................................. 11 Business model.................................................................................................................... 11 We are LTP - Furniture.........................................................................................................13 Business & Product segments.................................................................................... 13 Production facilities & Performance Highlights 2023.................................... 14 Certifications....................................................................................................................... 15 We are LTP - Garment Business & Product segments................................................................................... 16 Production facilities & Performance Highlights 2023................................... 17 Certifications...................................................................................................................... 18

ENVIRONMENT – FIGHT FOR CLIMATE

Environment - Fight for Climate....................................................................................... 20 Energy use & mix...................................................................................................................... 21 GHG Emissions........................................................................................................................... 23 Carbon Calculator..................................................................................................................... 25 Water management................................................................................................................ 26 Waste management................................................................................................................ 27 Materials, Durability & Circularity..................................................................................... 28 3D samples vs. physical samples................................................................................. 29 Furniture - FSC certified wood & cardboard......................................................... 30 Garment - Plastic bags with 50 % recycled content......................................... 31 Chemical Management..................................................................................................... 32 Design for disassembly & surplus stock................................................................... 33

SUSTAINABILITY DATA COLLECTION

Sustainability data collection....................................................................................................... 53 Accounting practices.................................................................................................................. 54 Management & board statement.............................................................................................. 58 Appendix 1 - Fact box regarding FSLM (Garment).......................................................... 59 Appendix 2 - Fact box regarding Amfori BSCI (Garment)............................................. 60 Appendix 3 - Characteristics own employees by country............................................. 61

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Unlock Transparency

3

Letter from Executive Management

Successfully navigating the complexities of 2023 among geopolitical and economic turbulence indeed requires resilience and adaptability. Despite these challenges, the enduring importance of sustainable business practices remains a priority for LTP Group. We continuously enhance our sustainability approach to effectively manage the environmental and social impacts throughout our value chain, while also addressing the needs of our stakeholders. LTP Group will continue to drive positive social and environmental change in the areas where we operate. This commitment aligns with our acknowledgment of the textile industry's significant environmental impact. Our sustainability report for 2023 remains consistent with the materiality assessment we conducted in 2021. The format of our ESG reporting will evolve as we adapt to the EU Corporate Sustainability Reporting Directive (CSRD) coming into effect. We strive to provide our stakeholders with comprehensive financial and non-financial information that adds value and nurtures trust.

Jeannett Hvidkjær

Henrik Holmgaard Olsson

Rasmus Helt Poulsen

However, we recognize that achieving our sustainability goals requires collaboration. Engagement from employees, customers, suppliers, and business partners is essential. Central to our strategy is our unwavering dedication to sound governance and integrity. We recognize that trust forms the cornerstone of our connections with stakeholders, employees, customers, and communities. We persist in strengthening and maintaining stringent ethical standards, transparent business practices, and anti-corruption approaches across every facet of our activities. Materials are the largest contributor to environmental impact in our value chain, and while material sourcing is largely influenced by customer preferences, we take responsibility by ensuring transparency in data for customers to make informed decisions towards more sustainable solutions. Together, through partnership, we aim to address sustainability challenges and drive positive change in the textile industry and beyond.

This year we progressed on our sustainability journey and are pleased to be able to present improvements in most of our ESG areas within our 4 commitments: Unlock transparency, Fight for Climate, Care for People and Governance Responsible Business Conduct.

We want to thank all our colleagues, customers and partners for their efforts. There is still a lot to do, but with the progress so far, we are confident that together we will play a key role in advancing the sustainability goals.

We invite you to explore our report and learn more about our achievements across ESG in 2023.

4

Sustainability at a glance - Global overview

2022 data

2023 data

MATERIALS LS -Durability & Circularity ALS

SOCIAL

GOVERNANCE

ENVIRONMENT

-Fight for Climate

-Care for People

-Responsible Business Conduct

Gender diversity management 78.3 % 78.0 %

Whistle blower hotline Training material in development

Total renewable energy share 5.1 % 11.3 % Target 2030: To be defined in 2024

FSC wood (Furniture, LT) 19 % 41 % Target 2025: 50 %

to be rolled out in 2024 100 % employees trained

Scope 1 621 tCO2e

Reports 5 5 Target 2025: 3-5 reports

FSC cardboard (Furniture, LT) 60 % 85 % Target 2025: 90 %

Turnover white collar 5.5 % 10.4 % Target 2025: less than 10 %

521 tCO2e Target 2030: To be defined in 2024 Scope 2 market based 2,115 tCO2e 1,488 tCO2e Target 2030: 0 CO2e Waste recycling 25 % 21 % Target 2025: 30 %

Supplier management Revised and ready for global implementation 2024 Target 2025: 90 % direct suppliers have signed CoC and compliance declaration Business partner management Revised and ready for global implementation 2024 Target 2025: 100 % business partners have signed revised CoC

Turnover blue collar 29.7 % 28.3 % Target 2025: less than 20 %

Design for disassembly (Furniture, LT) 5 5 Target 2025: 10 Plastic bags with recycled content (Garment, global) 52 % 44 % Target 2025: 70 %

Lost Time Injury Frequency 1.9 1.1 Target 2025: less than 1

Water management 17,840 m3 Target 2030: 12,000 m3

19,007 m3

5

Our Strategy

Our Four Commitments

UNLOCK TRANSPARENCY We commit to open communication and demonstrate results to all stakeholders.

Our 2025 strategy is built upon the materiality assessment conducted in 2021. Since then, both the regulatory environment and our customers' sustainability expectations have evolved significantly. In 2024, we eagerly anticipate collaborating with our stakeholders to conduct a fresh, comprehensive double materiality assessment and formulate our updated sustainability strategy. As a step towards aligning with forthcoming reporting requirements, this report has already interpreted our four sustainability commitments -"Fight for climate," "Embrace durability & circularity," "Care for people," and "Unlock Transparency" - in terms of Environmental (E), Social (S), and Governance (G) considerations.

CARE FOR PEOPLE It is essential for LTP Group to provide opportunities for our employees to develop their skills and continuously contribute to improve working, social and living conditions. We are committed to a healthy and safe work environment in all factories. We also commit to involve business partners to meet high environmental and social industry standards. FIGHT FOR CLIMATE Given the urgency of the climate crisis we will invest in renewable energy. We are committed to disclose our scope 1 and 2 emissions, and are working to disclose our scope 3 emissions. As a manufacturer LTP takes the responsibility to collaborate with brands and suppliers on materials substitution, product development and innovation for design for durability and design for disassembly. We also commit to minimize production waste and optimize recycling of waste. GOVERNANCE - RESPONSIBLE BUSINESS CONDUCT LTP Group, operating in multiple high-risk countries, mitigates human rights and corruption risks by training employees, having business partners & suppliers sign a Code of Conduct, and conducting due diligence. Our ethical standards encompass respect for human rights, labor rights, and a commitment to a safe working environment, opposing all forms of violence, forced labor, child labor, and discrimination.

Open communication and demonstration of results

Unlock Transparency

Fight for Climate

Disclosure of our emissions, focus to energy, materials, durability & circularity

Governance - Responsible Business Conduct Includes human & labor rights, code of conduct and whistleblower hotline

Care for People

Focus to our valued employees, including working, social and living conditions

6

Our Strategy

Sustainability ladder

Continuously improving

We still work towards continuous improvement as depicted in our sustainability ladder.

Key performance indicators and measurable targets to track progress on strategic priorities

Performance based metrics

Step 1 “Compliance and corporate values” is the base of the ladder since it is a foundation which is essential to successfully build sustainability initiatives and monitor risk – read more in the section “Governance – Unlock transparency”. Step 2 “Certifications” verify our sustainability progress. Upholding certifications provides us with continuous expertise from third party organizations specialized in best practices within different areas of Environment, Social and Governance. Step 3 “Strategic priorities” and Step 4 “Performance based metrics” defined by end 2025 were the result of the 2021 materiality assessment and included topics as “Green House Gas emissions”, “Materials, durability and circularity”, “Living wages”, ”Health & safety at work”, and “Protection of human & labor rights” – topics you can read more about throughout this report.

4

Focus areas where LTP Group has a high ambition level and an ability to drive change

Strategic priorities

3

Certifications

Third party certificates at product and factory level, which attest of the sustainability level and efforts

2

Compliance & Corporate Values

Code of Conduct, core values, internal compliance policies and processes

1

7

Our Strategy

Sustainability Outlook In March 2022, the EU strategy for sustainable and circular textiles was adopted, which implements the commitments of the European Green Deal, the Circular Economy Action Plan and the European industrial strategy. For LTP Group, this signifies a progression towards upcoming legislation. First upcoming is Corporate Sustainability Reporting Directive (CSRD) followed by Corporate Sustainability Due Diligence Directive (CSDDD) and Eco-design for Sustainable Products Regulation (ESPR). Accordingly, we are proactively preparing for the future, ensuring timely compliance. CSRD was adopted in July 2023, and we have already initiated planning for its implementation, anticipating stakeholder engagement in a double materiality assessment.

While CSDDD awaits formal adoption, ESPR for textiles remains to be defined, a process in which we participate in though our engagement with Danish Fashion and Textile (DM&T).

As we prepare, we remain actively involved with our customers to ensure that we meet and exceed their expectations and needs. In 2024, within the Garment Division, we will focus on obtaining the Global Recycling Standard certification – GRS certification – starting in Ho Chi Minh, Vietnam, and expanding throughout Europe. This initiative will enable our customers to have their products GRS certified, providing them with more sustainable options. Maintaining our certifications and commitments is a significant achievement, especially as the requirements continue to evolve. In 2023, we achieved our first FSLM Higg Index (Higg Facility Social & Labor Module) verification through an assessment in Ho Chi Minh, Vietnam. Furthermore, our production facility in Saltillo, Mexico, obtained the FSC certification and initiated preparations for ISO 9001 certification in 2024.

8

Stakeholder Engagement

LTP Group stakeholders are, among others, employees, management, Board of Directors, suppliers, customers, industry associations, certification bodies, industry experts and authorities. We include stakeholder feedback in our work on materiality, strategy, target setting and reporting. Engagement with our key stakeholders takes place in our daily operations and in formalized settings. The outcome of the stakeholder engagement has given us nine priorities which is coupled into our 4 commitments.

LTP Group 9 material topics

Relevant UN SDGs*

Sustainability commitments​

Injuries & accidents

14

Occupational health

15

Fair working conditions

16

CARE FOR PEOPLE

Fair wages & benefits

17

Recycled, recyclable & durable material sourcing​

In 2023 we engaged stakeholders across the following key areas:

1

Sustainable product development & innovation for Design for Circularity*​ Production waste management & disposal​

2

EMBRACE DURABILITY & CIRCULARITY

Addressing climate change is a key priority for LTP, and we are taking proactive steps to mitigate our environmental impact. One significant aspect of our approach involves entering into Power Purchase Agreements (PPAs) to transition towards renewable energy sources. By partnering with renewable energy providers, we aim to reduce our carbon footprint and contribute to a more sustainable future. To further our commitment to carbon reduction, we have implemented a carbon calculator tool within our Furniture Division. This tool allows us to measure and monitor carbon emissions from manufactured products. By understanding the carbon footprint of products , we can identify areas for improvement and implement targeted strategies to minimize carbon emissions. Transparency is integral to our sustainability efforts, and we are committed to fostering open communication with our customers and stakeholders. Our sustainability reporting processes enable us to share information on our sustainability initiatives, performance, and goals with customers and stakeholders. Through collaborative efforts, we aim to drive positive change throughout our supply chain and uphold the highest standards of ethical and sustainable practices.

3

Renewable energy sourcing (electricity & heating)​ Energy efficiency (electricity & heating)​

4

5

FIGHT FOR CLIMATE

*) Identified by looking at overlaps at the target level based on the GRI UN SDGs linkage resource

Policies Our Global Code of Conduct is the foundation of our commitment to ethical excellence and provides the guidelines defining how we do business the right and responsible way. Our Sustainability Engagement Policy describes our commitments and continuous improvement focus within climate & environment, human & labor rights and anti-corruption.

9

Governance

The oversight of sustainability within LTP Group is firmly rooted in our Board of Directors. With the introduction of new EU legislation on sustainability reporting, the mandate of boards and audit committees is expanding to include Environmental, Social, and Governance (ESG) matters. The Board of Directors play a pivotal role in fostering robust corporate governance and policies, by actively engaging in oversight of risks, internal controls, corporate reporting, and audit functions. Empowered by the Board of Directors, the sustainability Steering Committee, comprising executive management and the Director of Sustainability & Compliance, establishes strategic direction and priorities, overseeing the integration and execution of the Sustainability strategy. The sustainability Steering Committee is responsible for approving policies and action plans. The Sustainability Management Committee represented by key-stakeholders, is tasked with developing, anchoring, and executing policies, targets and action plans. They closely monitor progress and address potential challenges, ensuring that each member comprehends and contribute to sustainability impacts. By providing insight into local conditions and posing pertinent questions, they ensure organizational preparedness.

LTP Furniture Production

Board of Directors

Steering Committee

Management Committee

Audit & Certifications Committee

Members of the Sustainability Audit & Certifications Committee support customer audits and maintain sustainability certifications in close collaboration with stakeholders at certified and/or audited sites.

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We are LTP

Business Model

LTP Group is composed of a Garment division and a Furniture division. The strategic and shared functions are located in Denmark.

In a field so rapidly changing as the apparel and furniture industry, the only way to get by, is by always being one step ahead. And so, we have made challenges our specialty. Founded in the 1980s, today LTP has grown into a global production partner for forward-thinking garment and furniture brands. We have made it our mission to care – for our customers, business partners, employees, and the environment. We challenge the standards of yesterday and keep raising the bar for responsible and transparent production by actively developing reporting on our work within the four areas of Unlock Transparency , Environment - Fight for climate, Social - Care for people, Governance - Responsible business conduct. We take pride in our skilled and reliable employees who are committed to helping our customers’ brands fl ourish in an ever-changing market. From our base in Copenhagen, LTP is a leading manufacturer, employing more than 2,200 people in 12 fully-owned factories across six countries. Powered by passion, we partner up with ambitious brands that are also eager to innovate and lead the way forward. LTP Group manufacture high quality iconic furniture and high-performance garments. Our pledge is to enhance positive impact and minimize any negative social and environmental impact throughout our value chain. The commitment spans from raw material production, processing and sourcing to our own production and distribution and includes the usage- phase and waste management of our sold products.

Our business model / value chain from raw material production to end of life:

Waste Management

Raw Materials

Processing of raw materials

Manufacturer of Furniture & Garments

Brand / Design Company

Distribution

Shops / Customers

"Being a link in the supply chain, between brands and suppliers, LTP works closely with customers, suppliers and business partners to create more sustainable solutions"

LTP - Consciously crafted.

11

EUR +114 M. In revenue

12 Fully-owned factories across 6 countries

HQ, Copenhagen

50/50 Diversity in executive management split.

2,200 Employees worldwide

>3,400,000 Items in output

12

We are LTP - Furniture

Business & product segments

LTP Furniture provides a comprehensive supply chain solution including full assembly, packaging, and logistics of upholstery chairs and sofas tailored to high-end design driven retail or contract brands with a global distribution setup.

ACCESSORIES & ALTERNATIVE COVERS

UPHOLSTERY CHAIRS

ACOUSTIC PANELS & DIVIDERS

SOFA & SOFT SEATING

BED & SOFA COVERS

PUBLIC SEATING & TEXTILE SOLUTIONS

In 2022, preparations were made for near shoring to North America culminating in the establishment of a fully operational local facility in Mexico. This includes setting up a local supply chain sourcing components, resulting in reduced carbon footprint for delivered products compared to shipping containers from Europe.

In the European market we operate from our four factories in Lithuania. As part of our vertical integration strategy, we expanded with the addition of new facilities. Firstly, we established an in-house wood frame facility in 2022, enabling the production of FSC certified products. Subsequently, we incorporated a foam facility into our operations in 2023. The vertical integration strategy will ensure competitiveness and a continued focus on an even stronger sustainable production platform.

13

We are LTP - Furniture

Production sites 2023

Performance highlights 2023

2022 data

2023 data

SOCIAL

MATERI -Durability & Circularity ALS

ENVIRONMENT

LTP Sofa & Chair Kedainiai, LT

LTP Wood Factory Kedainiai, LT

LTP Foam Factory Kedainiai, LT

-Fight for Climate

-Care for People

12,177

600

1,480

Gender diversity management 67.6 % 60.7 % Gender diversity employees 79.0 % 76.4 %

Total renewable energy share 2.2 % 15.9 %

FSC wood (Furniture, LT) 19 % 41 %

2023 Warehouse: 5,000

1998

2022

Scope 1 450 tCO2e

FSC cardboard (Furniture, LT) 60 % 85 %

323 tCO2e

Turnover white collar 4.8 % 10.6 %

Scope 2 market based 719 tCO2e

502 tCO2e

Design for disassembly (Furniture, LT) 5 5

Turnover blue collar 20.3 % 28.2 %

Waste recycling 35 % 33 %

LTP Mexico Saltillo, MX

LTP Bed & Cover Silale, LT

Water management 3,648 m3 5,157 m3

LTIF 9.7

3,500

4,858

3.3

2021

2021

14

Certifications - Furniture

Fact box regarding Certifications & Commitments - FURNITURE

LTP Group has diligently worked with different certifications and commitments to create value for our customers, while caring for people and planet.

Certificate

Focus Area

Environment Social

Environment Material

Environment, OHS, Social, Quality

Environment

Quality

Environment management system at production facility

Quality management system at production facility​

Scope

Material Production Facility

Production Facility

Material Product safety

Foam Factory

X

X

Wood Factory

X

X

X

Sofa & Chair Kedainiai

X

X

X

X

X

Bed & Cover Silale

X

X

X

X

X

Mexico

15

We are LTP - Garment

Business & product segments

LTP Garment operates in 6 product categories: Active Sport, Cycling, Outdoor, Athleisure, Urban Performance and Sustainable Fashion & Lifestyle.

URBAN PERFORMANCE

OUTDOOR

CYCLING

ACTIVE SPORT

ATHLEISURE

ORGANIC & LIFESTYLE APPAREL

LTP Garment serves customers from two Innovation Centers, one in Europe and one in Asia. The European Innovation and cutting Center is situated in Kaunas, Lithuania with a local management team overseeing 3 manufacturing service sites in Ukraine and Romania.

As a comprehensive service provider, LTP facilitates customers from initial concept to bulk production. Our proficient product development team based in Lithuania incorporates state-of- the-art technologies, such as 3D prototyping. Supported by an extensive network of fabric and trim suppliers, along with an in-house fabric library, we ensure access to premium-quality and sustainable materials for each client. With a wide range of options available, we possess the capability to realize your vision with precision and ingenuity.

In total the European manufacturing set up counts +800 employees and 54 3rd party business partners.

The Innovation Center in Asia is situated in Ho Chi Minh, Vietnam and count +800 employees and 17 3rd party business partners.

16

We are LTP - Garment

Performance highlights 2023

Production sites 2023

Garment

2022 data

2023 data

MATERI -Durability & Circularity ALS

SOCIAL

ENVIRONMENT

LTP Vietnam ​ Company Ltd, HCMC

LTP UAB Kaunas, LT

LTP Ukraine LLC​ Lviv, Ukraine

LTP Balkan Botosani, Romania

-Fight for Climate

-Care for People

14,000

9,429

3,585

2,247

Gender diversity management 86.8 % 87.9 % Gender diversity employees 85.2 % 87.1 %

Total renewable energy share 7.9 % 7.3 %

Plastic bags with recycled content (Garment, global) 52 % 44 %

2008

1995

2017

2022

Scope 1 171 tCO2e

198 tCO2e

Turnover white collar 5.6 % 10.0 %

Scope 2 market based 1,392 tCO2e

982 tCO2e

Turnover blue collar 32.7 % 28.5 %

Waste recycling 33 % 35 %

LTP Balkan Harlau, Romania

Orlit, Belarus

Belvit, Belarus

(Phase-out)

Water management 14,166 m3

(Phase-out)

LTIF 0.0

13,823 m3

300

2,834

2,087

0.5

2022

2020

2008

17

Certifications - Garment

Fact box regarding Certifications & Commitments - GARMENT

LTP Group has diligently worked with different certifications and commitments to create value for our customers, while caring for people and planet.

Certificate

Focus Area

Chemicals, OHS

Organic materials

Social

Social (FSLM) Environment (FEM)

BSCI: Business Social Compliance Initiative

Scope

Production Facility

Materials

Production Facility

Production Facility

Production Facility

Kaunas, Lithuania

X

X

X

Lviv, Ukraine

X

X

X

X

Botosani, Romania Harlau, Romania Belvit, Belarus Orlit, Belarus

X

X

X

X

X

X

X

X

X *

Ho Chi Minh, VN

X

X

X

* FSLM verified 2023

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Environment - Fight for Climate

19

Environment - Fight for Climate

The Furniture and Garment Divisions produce durable, long-lasting products in the form of iconic furniture and high-performance garments.

Our goal is to source renewable electricity at all production sites. We have therefore been exploring our options in the countries where we operate and have faced challenges. For instance, in Vietnam, legislation permit solar panels on the roof of the building where the electricity is consumed, but prohibits connection to the grid to supply excess electricity. Power Purchase Agreements (PPAs) typically entail a 10-year commitment to use a specified amount of electricity. Given the fluctuating market demand for both our Furniture and Garment Divisions, it is crucial to consider both market conditions and energy efficiency opportunities when strategizing for a fossil- free future.

Main components in the production of furniture are wood, metal, plastic, foam and fabric, whereas for garments it is fabric and trims. Resent years, huge attention has been paid to the environmental impact of use of fabrics, with reasoning. The growing or extraction of raw materials and processing for fabrics require large amounts of water and chemicals. The majority of the environmental impact from fabrics and other components are concentrated within our value chain (see our Business model on page 11). We see it as our obligation to do as much as possible to reduce the environmental impact. Both we and our customers possess the power to demand wood, fabrics, trims and other components with lower environmental impact. Consequently, we are collaborating with our customers to address the complexities of sourcing more inherently sustainable materials, improving our waste sorting processes, exploring recycling opportunities, and, endeavoring to raise consumer awareness to the greatest extent possible as brand manufacturer.

LTP Group has a four-step strategy to reduce our energy use and CO2 emissions:

Reduce use of non-renewable fuels

Minimize carbon emissions from production sites through energy efficiency

Acquire Guarantees of Origin (GO‘s) or Renewable Energy Certificates (REC’s)

Enter into Power Purchase Agreements (PPA’s) in countries where we have production facilities in order to ensure additionality and the expansion of renewable energy production

20

Energy use & mix

Our energy use is distributed as electricity use, heating and fuels for company cars:

Unit

2022

2023

Non-renewable energy

Fuel consumption from coal and coal products

MWh

0

0

Fuel consumption from crude oil and petroleum products

MWh

791

751

Fuel consumption from natural gas

MWh

2,255

2,062

Fuel consumption from other non-renewable sources

MWh

Consumption from nuclear products

MWh

0

0

Consumption of purchased or acquired electricity, heat, steam, and cooling from non-renewable sources

MWh

5,238

4,033

Total non-renewable energy consumption

MWh

8,283

6,846

Renewable energy

Fuel consumption from renewable sources (including biomass, biogas, non-fossil fuel waste, renewable hydrogen, etc.)

MWh

352

296

Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources

MWh

0

485

The consumption of self-generated non-fuel renewable energy

MWh

93

88

Total renewable energy consumption

MWh

445

869

Distribution of energy consumption

Total energy consumption

MWh

8,729

7,715

Share of renewable sources in total energy consumption

%

5.1

11.3

Share of non-renewable sources in total energy consumption

%

94.9

88.7

Share of renewable electricity

Renewable electricity

MWh

93

573

Non renewable electricity

MWh

5,201

3,996

Total

MWh

5,294

4,569

Share of renewable electricity

%

1.8

12.5

21

Energy use & mix

Most of our heating requirements are currently met by non-renewable sources. Across our production sites in Lithuania, Ukraine, Romania, and Belarus, natural gas and LPG are used for heating purposes. However, in Belvit, Belarus biomass is used, in Silale, Lithuania, electrical heating pumps have been installed for production heating, while in Kedainiai, Lithuania, an electrical heating pump serves as an alternative to gas. No heating is utilized at our production sites in Ho Chi Minh, Vietnam and Saltillo, Mexico. Company vehicles, which facilitate employee commuting and inter-site transportation, primarily uses fuels from non-renewable sources. Adhering to our car policy, one hybrid car was included in the fleet in 2023. Electricity comes both from non-renewable sources and renewable sources. We have solar panels on the roof, covering approximately 10 % of the total electricity usage of our main production site in Kedainiai, Lithuania. Additionally, we acquire renewable electricity covered by guarantees of origin for approximately 55 % of the total electricity usage of our main production site in Kedainiai. Totalling 65 % renewable energy at our Furniture main production site in Kedainiai in 2023. Overall, we see a 13 % reduction in energy use, which is expected due to the reduced production compared to 2022. The use of non-renewable energy is reduced with 21 %, while the use of renewable energy has increased with 49 % resulting in improvement of the share of renewable sources from 5 % in 2022 to 11 % in 2023. LTP Group has entered into a Power Purchase Agreement with Green Genius supplying renewable electricity for our main production site in Kedainiai, Lithuania. The solar park became operational in February 2024.

5.1 % Share of renewable sources in total energy consumption

Energy consumption & mix 2022

5.1 %

Total energy consumption 8,729 MWh

94.9 %

94.9 % Share of non-renewable sources in total energy consumption

11.3 % Share of renewable sources in total energy consumption

Energy consumption & mix 2023

11.3 %

Total energy consumption 7,715 MWh

LTP Furniture commissioning part of a new 20,000 m2 solar park near Radviliškis, Lithuania

88.7 %

88.7 % Share of non-renewable sources in total energy consumption

22

GHG Emissions

Fact box regarding GHG emissions

The Intergovernmental Panel on Climate Change (IPCC) leaves no doubt about the link between the emission of greenhouse gasses and climate change, and it underlines the urgency of immediate action to keep temperature rises below 1.5 degrees Celsius to avoid serious negative repercussions for life on Earth.

So where does LTP Group’s greenhouse gas emissions come from?

Scope 1 are direct GHG emissions occurring from fuels used for company cars or at production sites owned or controlled by LTP Group.

Scope 2 are indirect GHG emissions caused by the energy purchased, such as electricity and district heating.

Scope 3 are indirect GHG emissions – not included in Scope 2 – that occur in our value chain, including both upstream and downstream emissions.

Manufacturer of Furniture & Garments

Brand / Design Company

Processing of raw materials

Raw Materials

Shops / Customers

Waste Management

Distribution

Scope 3

Scope 1 + 2

Scope 3

23

GHG Emissions

Regarding the reduction in our scope 2 emissions, this can be attributed to two distinct factors. Firstly, in 2023, we acquired GO’s to cover some of our electricity used at our main Furniture production site. This led to a significant improvement in the proportion of renewable electricity used, increasing from 1.8 % to 12.5 %. Secondly, from 2022 to 2023, there was a decrease in the CO2 emissions factors in the countries where our production sites are located, resulting in a natural reduction in our CO2 emissions from electricity usage. During 2024 we will establish a scope 3 inventory enabling us to reduce our CO2 emissions up- and downstream in our value chain. We expect our Scope 3 emissions to cover more than 95 % of our total CO2 emissions.

Green House Gas Emissions

Unit

2022

2023

%

Scope 1 GHG emissions

Gross Scope 1 GHG emissions

tCO2e

621

521

-16

Scope 2 GHG emissions

Gross location-based Scope 2 GHG emissions

tCO2e

1,654

1,203

-27

Gross market-based Scope 2 GHG emissions

tCO2e

2,115

1,488

-30

Share of renewable electricity

Total GHG emissions

2030 Target: 100 %

1.8 %

Total GHG emissions (location-based)

renewable electricity

12.5 %

tCO2e

2,275

1,723

-24

Total GHG emissions (market-based)

tCO2e

2,736

2,009

-27

5,294 MWh

4,569 MWh

81,6

Most of our production sites rely on heating powered by either natural gas or LPG gas. The decrease in scope 1 emissions observed from 2022 to 2023 can be attributed to the transition from natural gas to electricity for heating purposes.

2022

2023

Renewable electricity

Non-renewable electricity

24

Carbon Calculator

Fact box regarding Carbon Calculator

Our carbon calculator delivers GHG Protocol aligned CO2 emissions for our customers’ scope 3 inventory for purchased goods manufactured by our Furniture Division in LTP Group.

LTP’s Carbon Calculator

Customer’s Carbon Footprint

Waste related to product during LTP production

Energy LTP usage

Sales / retailing

Customer’s / consumers usage

Waste / recycling

Materials

Transportation Upstream to LTP

Transportation to customer / consumer

Cradle to.....

LTP Gate

End of life

25

Water Management

Water is a scarce resource and known to be used in high quantities in the textile industry. However, LTP Group's production processes are not water-intensive. Across all LTP Group production sites, water is solely utilized for sanitary purposes, with the exception of Ho Chi Minh, Vietnam and Saltillo, Mexico, where water is additionally used for cooling. The increase in water consumption can be linked to the scaling up of production activities, accompanied by an increase in the number of employees at our facilities in Botosani and Harlau, Romania, as well as Saltillo, Mexico.

2030 Target

Water consumption, m

3

12,000

17,840

19,007

81,6

2022

2023

26

Waste Management

We are dedicated to reducing production waste wherever possible. One illustration of this commitment is evident in our Garment Division, where we create our own cutting files for fabrics. This practice enables us to maximize fabric utilization, thereby conserving resources and minimizing waste. Similarly, in our Furniture Division's foam factory, we optimize cutting profiles to reduce waste. Additionally, any cut-offs generated in the process can be recycled as pillow filling, further contributing to our waste reduction efforts. At all our production sites, we prioritize to move waste up the waste hierarchy where possible. However, it is important to acknowledge that recycling opportunities for fabrics are currently limited globally, and therefore in the countries where we operate.

In 2024, we plan to launch waste campaigns at all sites. Internally, our focus will be on implementing onsite sorting measures to facilitate the recycling of pure waste fractions. Externally, we aim to engage with customers and waste collectors to enhance the upcycling of more of waste materials. Only limited amounts of hazardous waste are generated. Most of it is related to gluing processes in the Furniture Division, as glue contaminated material is characterized as hazardous waste. While use of glue processes can enhance the visual appearance of products, they pose challenges from a recyclability standpoint. Gluing makes disassembly and refurbishment during the product’s lifecycle difficult, particularly impacting end-of-life disassembly efforts. To address this issue, LTP Group frequently collaborates with customers on development projects aimed at designing products for disassembly.

2030 Target

2030 Target

0 % hazardous waste

Waste generation 2022

Waste generation 2023

45 %

Waste generation 2023

Waste generation 2022

53 % Incineration

53 %

1.7 %

2 %

98 %

55 %

98 %

55 % Incineration

20 % Landfill

20 %

26 %

LTP Furniture commissioning part of a new 20,000 m2 solar park near Radviliškis, Lithuania

LTP Furniture commissioning part of a new 20,000 m2 solar park near Radviliškis, Lithuania

98.3 %

98.3 %

21 %

25 %

25 % Recovery / Recycling

21 % Recovery / Recycling

26 % Landfill

1117 metric tonnes

Non-hazardous waste

Hazardous waste

2030 Target

1164 metric tonnes

2030 Target

50 %

5 %

27

Materials, Durability & Circularity

In our 2025 strategy “Embrace durability and circularity” is our aspiration to increase use of more sustainable materials, increase use of 3D samples, prepare design for disassembly and recycle leftover and surplus fabric. In contrast to fast fashion, the Garment Division embraces the principles of slow fashion. The philosophy of slow fashion includes reliance on trusted supply chains, smaller-scale production, traditional crafting techniques, and using local materials where possible. Slow fashion attempts to convince consumers to buy fewer clothes of better quality and to keep them for longer. “In resent years, significant attention has been directed towards the environmental impact of the textile and clothing industry with valid reasoning as “Clothing accounts for between 2 % and 10 % of the environmental impact of EU consumption. This impact is often felt in third countries, as most production takes place abroad. The production of raw materials, spinning them into fibers, weaving fabrics and dyeing require enormous amounts of water and chemicals, including pesticides for growing raw materials such as cotton. Consumer use also has a large environmental footprint due to the water, energy and chemicals used in washing, tumble drying and ironing, as well as to microplastics shed into the environment. Less than half of used clothes are collected for reuse or recycling when they are no longer needed, and only 1 % are recycled into new clothes, since technologies that would enable recycling clothes into virgin fibres are only starting to emerge”. 1)

LTP Garment manufacturing in Lithuania

1) European parliament "Environmental impact of the textile and clothing industry", 2019

28

Materials, Durability & Circularity

3D samples versus physical samples Developing both furniture and garments requires physical samples of the product for customers to accept the appearance of the product. To be faster and more efficient in our developing process we have invested in 3D technology within both our Furniture and Garment Divisions. A desired and sustainable benefit is that we reduce resource use and thereby enhance resource efficiency. Developing a new product within Furniture optimized with 3D can reduce the number of physical samples from 5 to 2 in average. Appearance of the final product is everything when it comes to the iconic products that LTP Group manufacture, therefor the physical sample is inevitable, as how the materials work together and how the product feels in practice is possible to know only on a real product sample. The same applies within Garment, where it is normal to make several physical samples for the customer. Using 3D has reduced the number of samples as the look of the product can be finalized within 3D before making the first prototype. As the first prototype is already closer to the desired product it is the finalization of the appearance and feel of the product that determines the number of samples used. Savings with 3D samples is found in different stages of product development for example a 3D is made instead of the first prototype, a size set, a photo sample, or a preproduction sample. Making 3D samples before the first prototype saves about 30 % of all samples quantity. In 2023 we saved 7 % of all physical samples by using 3D.

3D can reduce the number of physical samples from 5 to 2 in average.

Making 3D samples before the first prototype saves about 30 % of all 3D samples quantity. In 2023 we saved 7 % of all physical samples by using 3D.

29

Materials, Durability & Circularity

Furniture - FSC certified cardboard & wood In the manufacturing of furniture wood is a key material used, and cardboard is a material employed for packaging purposes. Recognizing the environmental impact of conventional materials, the Furniture Division of LTP Group has undertaken efforts to replace traditional wood and cardboard with FSC certified alternatives. In our own wood factory we use 100 % FSC certified wood.

FSC Certified Wood

2025 Target

50 %

81

59

81,6

We are pleased to note positive progress in sourcing FSC wood and cardboard. There has been a doubling in the FSC certified wood from 19 % to 41 %, and a substantial increase from 60 % to 85 % in FSC certified cardboard. In 2024, our aim is to sustain or further enhance the proportions of FSC certified wood and cardboard in our operations.

19

41

2022

2023

FSC certified wood

Wood

LTP Wood Factory in Lithuania

FSC Certified Cardboard

2025 Target

40

15

90 %

19007

81,6

60

85

2022

2023

FSC certified Cardboard

Cardboard

30

Materials, Durability & Circularity

Garment - Plastic bags with 50 % recycled content Regarding packaging, all garments are individually packed in plastic bags. Recognizing the importance of sustainability, the Garment Division at LTP Group has prioritized sourcing plastic bags with a minimum of 50 % recycled material content.

We see a reduction in the distribution of plastic bags with minimum 50 % recycled content. In 2024, our aim is to get back on track and enhance the proportion of plastic bags with recycled content.

Plastic bags with min. 50 % recycled content

2025 Target

56

48

70 %

81,6

52

44

2022 2023 Plastic bags with min. 50 % recycled content

Plastic bag with recycled content from Garment customer

Plastic bags

* Above relates to Garment globally.

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