Fagron NV

Reference: page 62

Fagron's Board of Directors holds ultimate responsibility for sustainability, including establishing the ESG strategy, monitoring its implementation, and overseeing the related policies. The Board consists of eight members, three female and five male (37.5% female), with representatives from five nationalities across different age groups. When appointing directors, diversity in gender, age, education, and professional background is considered alongside complementary skills, experience and knowledge. Many board members have competencies and experience in ESG, corporate governance and ethics. There was no official employee representation on the Board in 2024. Day-to-day management of sustainability is delegated by topic to specific roles, with the CFO appointed to oversee implementation on the Board's behalf and the ESG team handling implementation.

Reference: page 109

The Board of Directors is informed about and considers sustainability matters in its work. The Executive Leadership Team provides the Board with information on material impacts, including results of ESG policy and the materiality analysis, risks and opportunities, implementation of due diligence, and the results and effectiveness of policies, measures, benchmarks and targets. Progress on the sustainability strategy is discussed during almost every Board meeting as part of monitoring; the focus per meeting can be progress, sustainability metrics, or proposed changes to the strategy, policies and action plans. The CFO advises the Board on sustainability impacts, risks and opportunities. Action plans, including those based on the Global Employee Survey, are presented to the Board for feedback and approval.

Reference: page 67

The Nomination and Remuneration Committee prepares the remuneration policy and report for directors and the Executive Leadership Team, including variable remuneration and long-term incentives whether or not tied to shares. It prepares performance target recommendations for the CEO and other ELT members and recommendations on the allocation of annual bonuses and long-term incentives. During 2024 the Committee assessed and set performance criteria and targets for ELT members for short-term and long-term variable remuneration, and reviewed possible changes to the remuneration policy including the shareholding guidelines. As part of the financial materiality assessment, sustainability indicators in Fagron's credit facility focus on climate change and employee engagement, with meeting these targets allowing favorable conditions. The detailed remuneration report and policy are incorporated by reference.

Reference: page 232

Fagron addresses the due diligence statement through the ESRS Index, which maps paragraph 32 of GOV-4 to the index itself. The report covers due diligence elements across the document: the Board is informed about the implementation of due diligence by the Executive Leadership Team. Fagron carries out supply chain due diligence through its Fagron Business Partner ESG questionnaire, which at the end of 2024 included questions on working hours, climate change, human rights and labor rights, pollution control and due diligence further down the supply chain. In 2024 Fagron became a member of the Pharmaceutical Supply Chain Initiative, expected to provide information on value chain workers from 2025. Engagement with affected stakeholders and assessment of impacts feed into the due diligence approach described across the Sustainability Statement.

Reference: page 65

The Audit and Risk Committee monitors the effectiveness of the Company's internal control and risk management systems and oversees internal audits and their effectiveness. It monitors the legal audit of the financial statements, including the sustainability statement, and follows up on CSRD guidelines and ESRS compliance, including the technical requirements for sustainability reporting and digital tagging in a central EU database. In 2024 the Committee reviewed improvements in internal control and risk management, particularly regarding cyber-security and IT governance, and reviewed and approved the three-year internal audit plan. Fagron's independent internal audit function developed a risk-based audit plan, executed it, and reported results, recommendations and resolution status to the Committee, coordinating with risk management, compliance, security, ethics and external audit functions.

Reference: page 101

Fagron's business model, value chain and segments are described under About Fagron. Fagron is a pharmaceutical compounding group that supplies repackaged and compounded products and provides personalized medicine. Fagron is not active in the fossil fuel sector, chemicals production, controversial weapons, or the cultivation and production of tobacco. The company's products, services and customer groups are all relevant to its sustainability-related goals as they relate to access to medicine. Fagron's strategy and long-term value creation are closely interlinked. The sustainability strategy, updated in 2024 and approved by the Board in October 2024, addresses all material topics and includes a strategic roadmap, a good governance roadmap and a foundational roadmap. Fagron will publish ESRS sector-specific information once sector descriptions become available.

Reference: page 110

Fagron divides stakeholders into affected stakeholders and users of sustainability information. Affected stakeholders include its own people, suppliers and value chain workers, customers and end-users, and the environment. Users of sustainability information include investors, credit providers, customers, and regulators and authorities. Fagron does not consider local communities as a key stakeholder because it does not have a material impact on them, and has no plans to change this. Fagron engages with key stakeholders on a regular basis through different channels: the Global Employee Survey and Diversity and Inclusion committee for employees; the Fagron Business Partner ESG questionnaire and PSCI membership for suppliers; customer service and Fagron Academy for customers; capital market days and direct contact for investors; and direct engagement with regulators. The 2023 double materiality assessment included specific stakeholder engagements.

Reference: page 108

Fagron's material topics are the same as in its 2023 annual report. Material topics include Climate change, Chemical use and pollution, Energy use, and Waste on the environmental side, plus social and governance topics such as Health and safety, Human rights and labor rights, Diversity and inclusion, Employee engagement, Product quality and safety, Compliance, and Corruption and bribery. Topics such as Water use, Biodiversity (Resource use), and affected communities were not assessed as material. A topic is material if rated High in either financial or impact materiality, or Moderate in both. Fagron does not structurally assess the current and anticipated impact of material topics on its business model, value chain, strategy and decision-making, but regularly assesses its sustainability strategy and action plans. It does not have an integral picture of expected financial effects except for climate change.

Reference: page 101

Fagron conducted a double materiality assessment in 2023 in line with the ESRS, establishing whether a topic is material from a financial perspective, an impact perspective, or both. The process involved identifying potential topics (using the ESRS list, MSCI Industry Materiality Map, SASB, Sustainalytics and peer assessments), identifying stakeholders, assessing financial materiality, assessing impact materiality, and plotting results in a matrix. A long list was narrowed to 31 topics, with Animal welfare and Community rights excluded as not applicable. Financial materiality used the risk assessment and shareholder engagement with thresholds based on share of outstanding capital. Impact materiality used a severity framework based on whether impacts are remediable or grave and the number of people affected (1-100 or more than 100). The assessment was approved by the Board, with the next assessment scheduled for 2026.

Reference: page 233

Fagron's approach to disclosure requirement coverage is set out in the ESRS Index. The Index maps each disclosure requirement to its location in the annual report or notes where a requirement is not applicable, not mandatory, or covered by the materiality assessment. Paragraph 56 of IRO-2 is addressed by the ESRS Index itself, paragraph 57 is not applicable, and paragraph 58 is not mandatory. Detailed minimum disclosure requirements for policies, actions, metrics and targets (MDR-P, MDR-A, MDR-M, MDR-T) are disclosed per material topic. The Index reflects Fagron's material topics, including Climate change, Chemical use and pollution, Energy use and Waste, while non-material topics such as Water, Biodiversity and affected communities are noted as not material and therefore not reported in detail.

Reference: page 115

Fagron finalized its climate transition plan in 2024, called Future Forward: Science-based climate transition, focusing on energy efficiency, electrification, renewable electricity, sustainable travel and commuting, sustainable transportation and distribution, improving waste treatment, and green products and end-of-life. The plan outline was approved by the Board of Directors in December 2024 and includes financial resources for Scope 1 and 2 actions. Near-term targets were approved by the SBTi in October 2023, contributing to limiting global warming to 1.5C, with net-zero by 2050. Plans include electrifying at least five natural-gas facilities between 2026 and 2030 and investing about 750,000 euro in solar panels between 2025 and 2030. The full transition plan will be made accessible in 2025 via investors.fagron.com.

Reference: page 113

Fagron's climate change policies apply to both own operations (Scope 1 and 2) and the upstream and downstream value chain (Scope 3). The aim is to reduce greenhouse gas emissions in line with the Paris agreement goal of keeping global warming within 1.5C. Policies are anchored in the Future Forward climate transition plan and supported by science-based targets approved by the SBTi in October 2023, using 2021 as the baseline year aligned with SBTi requirements. The science-based targets are based on the cross-sector reduction pathway required to achieve net-zero in 2050 and have a higher ambition level than Fagron's greenhouse gas intensity target, which only applies to own operations and business travel. Fagron does not use carbon credits or internal carbon pricing.

Reference: page 115

The 2024 climate transition plan sets out actions across seven key areas: energy efficiency, electrification, renewable electricity, sustainable travel and commuting, sustainable transportation and distribution, improving waste treatment, and green products and end-of-life. For Scope 1 and 2, Fagron expects to cover energy efficiency costs through savings and invest about 750,000 euro in solar panels between 2025 and 2030, with renewable electricity operating costs of up to 100,000 euro in 2030. It aims to electrify at least five of about 30 natural-gas facilities between 2026 and 2030 and to have at least 85% of its car fleet fully electric by 2030 (29% of EMEA lease cars electric at end 2024). In 2024, 43.2% of electricity used was renewable. Scope 3 actions are under development.

Reference: page 113

Fagron's main target is to reduce absolute Scope 1 and 2 market-based emissions by 42% by 2030 from a 2021 base year, approved by the SBTi. For purchased goods and services, the aim is for 60% of emissions to fall under science-based targets by 2027 (15% achieved by end 2024). For selected other Scope 3 categories, the aim is a 25% reduction by 2030 from the 2021 baseline. A separate greenhouse gas intensity target, linked to a sustainability-linked loan, seeks a 30% reduction in Scope 1, Scope 2 location-based, and Scope 3 business travel intensity by 2025 versus a 2019 baseline (5% per year), aimed at net zero by 2040 in own operations. Fagron reports it met its 2024 intensity target.

Reference: page 130

Fagron's total energy consumption in 2024 was 49,183 MWh, up from 44,406 MWh in 2023, largely due to acquired companies. Total energy consumption from fossil sources was 35,065 MWh, including 16,191 MWh of fossil fuel consumption (12,488 MWh natural gas, 3,702 MWh crude oil and petroleum products) and 18,874 MWh of purchased fossil electricity, heat, steam and cooling. There was no energy from nuclear sources. Total energy consumption from renewable sources was 14,118 MWh, comprising 12,448 MWh of purchased renewable electricity and 1,670 MWh of self-generated non-fuel renewable energy. Renewable sources made up about 29% of total energy use. Energy intensity in high climate impact sectors was 56.4 MWh per million euro in 2024.

Reference: page 119

In 2024, Fagron's Scope 1 (direct) emissions were 3,871 tonnes CO2-eq. Scope 2 emissions were 9,246 tonnes CO2-eq location-based and 6,554 tonnes CO2-eq market-based. Combined Scope 1+2 emissions were 13,117 tonnes location-based (up 3% versus 2021) and 10,425 tonnes market-based (down 20% versus 2021). Scope 3 (other indirect) emissions were 282,802 tonnes CO2-eq, with the largest contributions from purchased goods and services (about 273,014 tonnes including capital goods, or 167,669 tonnes for purchased goods and services alone) and upstream transportation and distribution (about 77,266 tonnes). Total GHG emissions were 295,918 tonnes location-based and 293,227 tonnes market-based. Selected Scope 3 categories totaled 102,163 tonnes in 2024.

Reference: page 125

Fagron uses chemicals classified as chemicals of concern or of very high concern by the European Union and aims to contribute to a cleaner living environment by minimizing pollutant emissions and ensuring careful handling of these chemicals. Fagron does not have specific policies or targets on chemical use, because these chemicals are pharmaceutical raw materials or vital for quality testing. Chemical use and pollution is not part of the strategic sustainability roadmap but is included in the foundational roadmap to mitigate potential pollution impacts. Fagron is not mandated by law to report on chemical use and pollution other than under the CSRD, as the pharmaceutical industry is exempt from the REACH regulation and Fagron is not a large polluter and does not submit data for the E-PRTR/IEPR.

Reference: page 125

As part of its foundational roadmap, Fagron states that it will implement mitigation methods at all locations at risk of emitting material amounts of air pollutants and at all locations at risk of emitting material amounts of pollutants to water. Fagron assessed the actual presence of potential pollutants, Substances of Concern, and Substances of Very High Concern at each facility handling these chemicals in 2024. It identified potential pollution risks such as construction, fire, health and safety incidents, fossil fuel use, and chemical handling, and concluded that in 2024 only chemical handling posed a risk for emissions to air and water. It therefore assessed hazardous chemicals and mitigation measures at each facility, using mass-balance methods to estimate pollution and chemical use.

Reference: page 125

Fagron does not have any specific targets related to chemical use, because these chemicals are pharmaceutical raw materials or are vital in quality testing of its products. Fagron states it will develop further targets and action plans for pollution to air and water in 2025. The topic of chemical use and pollution is not part of the strategic sustainability roadmap but is included in the foundational roadmap, under which Fagron commits to implementing mitigation methods at all locations at risk of emitting material amounts of air pollutants and pollutants to water.

Reference: page 126

Fagron reports that emissions to air and water are very limited, with the exception of potential pollution to air and water in Mexico, where data is very uncertain and measurement methods will be improved in coming years. Total pollutants emitted to air or water in 2024 were 252 kg, comprising mercury and compounds (28 kg) and zinc and compounds (224 kg). Fagron does not emit pollutants to soil. Because it is not mandated by law to measure these emissions, it does not have equipment to measure total emissions and instead estimates quantities using a mass-balance approach for pollutants at facilities at risk of emitting material amounts to air or water. Comparative information will be provided starting with the 2025 annual report.

Reference: page 126

Fagron reports substances of very high concern (SVHC) and substances of concern present in products during compounding or repackaging. Total substances of very high concern in 2024 were 34 metric tons procured and 41 metric tons leaving Fagron facilities. By hazard class these include phenolphthalein (carcinogenic, 5 procured / 7 leaving), decamethylcyclopentasiloxane (persistent, bioaccumulative and toxic, 4 / 3), boric acid (reproductive toxicity, 25 / 31), and glutaral (respiratory sensitization, 0 / 0). Total substances of concern across hazard classes were 263 metric tons procured and 294 metric tons leaving facilities, including zinc oxide, paraffin oil, hydroquinone, and others. Quantities are estimated using a mass-balance approach. Comparative information will be provided starting with the 2025 annual report.

Reference: page 131

Fagron strives to minimize the impact of waste management by reducing the quantity of waste produced in its own operations and by increasing waste recycling. Waste is included in the foundational roadmap of its sustainability strategy Future Forward: Personalizing medicine, and is also addressed as part of the strategic roadmap to reduce Scope 3 emissions. The policies and targets on waste apply only to Fagron's own operations and are voluntary, because recycling and reduction of landfilling are not mandatory in all jurisdictions where Fagron operates. Fagron processes pharmaceutical raw materials and generates hazardous waste, which if not properly handled could lead to toxic pollution; the treatment of both hazardous and non-hazardous waste also leads to greenhouse gas emissions.

Reference: page 131

2024 was the first year Fagron collected waste data from all its entities, in line with ESRS requirements. As a result, no specific actions were taken in 2024 to achieve waste-related targets. Fagron states it will develop an action plan based on the 2024 waste data, with efforts to commence in 2026 after the action plan is developed in 2025. Alongside this, Fagron focuses on eco-friendly packaging to reduce greenhouse gas emissions from the end-of-life treatment of sold products category. The climate transition plan is expected to affect the waste management of customers and end-users in the downstream value chain.

Reference: page 131

Fagron has set the following waste targets. As part of its strategic roadmap, it aims to recycle 75% of non-hazardous waste by 2030. As part of its foundational roadmap, it aims for zero waste to landfill by 2030 unless no viable alternative is available, meaning waste would be diverted from landfill to another disposal operation such as incineration or, where possible, towards recycling. With these targets Fagron wants to ensure all waste is treated in the best possible way. All waste data is measured in metric tons. These policies and targets apply only to Fagron's own operations and are voluntary, because recycling and reduction of landfilling are not mandatory in all jurisdictions where Fagron operates.

Reference: page 132

Total waste generated in Fagron's own operations in 2024 was 7,222 metric tons. Of this, 1,280 metric tons were diverted from disposal (34 to preparation for reuse, 1,242 to recycling, and 5 to other recovery operations), all of which was non-hazardous waste. A total of 5,942 metric tons were directed to disposal, comprising 433 tons to incineration, 107 tons to landfill, and 5,402 tons to other disposal operations. A total of 17% of waste went to recycling, so 83% was not recycled, and 18% of non-hazardous waste went to recycling. The recycled non-hazardous waste consisted largely of paper and cardboard, mixed packaging, and plastic. The largest part of waste went to landfill, and a more in-depth analysis of how to achieve the landfill diversion target will be conducted in 2025.

Reference: page 132

Total waste generated in Fagron's own operations in 2024 was 7,222 metric tons, of which 396 metric tons were hazardous waste and 6,826 metric tons were non-hazardous waste. Waste to recycling was 1,242 metric tons and non-recycled waste was 5,980 metric tons, giving a non-recycled rate of 83% (recycling rate of 17%). Total waste diverted from disposal was 1,280 metric tons (all non-hazardous), and total waste directed to disposal was 5,942 metric tons (396 hazardous, 5,546 non-hazardous). Of the hazardous waste, 170 tons went to incineration, 13 tons to landfill, and 214 tons to other disposal operations. Fagron does not generate radioactive waste. Mass data made up 34% of total waste generated, volume data 1%, and bin-based data 65%.

Reference: page 136

Fagron's own workforce policies sit within the foundational and People roadmaps of its Future Forward: Personalizing medicine strategy. They cover employee engagement, diversity and inclusion, training and development, health and safety, compensation and benefits, working hours, and human rights and labor rights. The Code of Conduct and Ethics addresses discrimination and harassment, slavery and forced labor, child labor (minimum legal working age), and freedom of association and collective bargaining, referencing ILO conventions. A Modern Slavery Statement combats human trafficking and forced labor. Health and safety has a zero-tolerance policy for actions endangering employees. Most policies apply to Fagron employees, though human rights, labor rights, working hours, and health and safety policies extend to all Our people.

Reference: page 133

Fagron organizes its social reporting around three stakeholder groups: Our people, end-users, and value chain workers. Stakeholder engagement is disclosed elsewhere in the Sustainability Statement and incorporated into the Social information chapter by reference. For Our people, engagement is gauged through the Global Employee Survey, conducted every two years since 2016, which measures a Sustainable Engagement Score reflecting the connection between employees and Fagron. The 2024 survey reached a 93% participation rate. Insights from the 2024 survey set priorities for 2025 and 2026 focused on leadership communication, equity and balance of compensation, and creating a safe place for sharing, which will be translated into region-specific action plans. Exit interviews also gather employee views, including on compensation and benefits.

Reference: page 164

Fagron operates a comprehensive grievance mechanism for employees with three channels: raising a concern with a manager or supervisor; escalating to HR or the site manager; and submitting an official complaint via the Fagron Integrity Line. The Integrity Line is available online 24/7, managed by an external provider, fully anonymous, and falls under Fagron's whistleblower scheme. Reports reach the Compliance team, which informs the Audit and Risk Committee. An independent internal investigation team is assembled per report, with an outside party engaged where independence cannot be ensured, and the procedure sets time limits per step so reports are handled swiftly. Confidential counselors guide employees to the proper channel. A target ensures all employees have access to a confidential counselor by end 2025; 59% had access in 2024.

Reference: page 138

Actions for Our people fall under a strategic action plan to increase sustainable employee engagement (Future Forward: People) and operational action plans per topic. Diversity and inclusion actions include a Female Mentorship Program (18 mentees in 2024), five Awareness Month Campaigns, monthly inclusion initiatives, and a diversity and inclusion focus group of nine members. Health and safety actions include annual reviews, standardized incident follow-up, and annual health and safety training (86% completion in 2024). Training actions include annual performance and career development reviews and a continuous feedback culture. Engagement priorities from the 2024 survey will become region-specific plans in 2025. Adequate wage was assessed for the first time in 2024, and Global Standard Benefits are under development for finalization in 2025.

Reference: page 136

Fagron has set workforce targets across its roadmaps. Engagement: all Fagron companies reach a Sustainable Engagement Score above the country norm by 2030. Diversity: 50/50 male/female distribution at all management levels by 2030 (moved from 2025); one-third of senior management female by 2025 and 40-60% by 2040; gender pay gap between -5% and 5% for all management levels by 2030. Training: 95% of employees have an annual career development and performance review by 2030. Health and safety: zero fatalities and zero long-term or permanent work-related injuries, and 95% participation in annual health and safety training by 2030. Compensation: adequate wage for all employees latest in 2026, and market-competitive median pay and benefits by 2030. Working hours and confidential counselor access targets also apply.

Reference: page 133

At December 31, 2024, Fagron's workforce consisted of 3,935 employees and 104 other people (18 self-employed managers and 86 temporary workers), totaling 4,039 people referred to as Our people. By gender, employees comprised 2,223 female, 1,703 male, and 9 other gender. By contract, 3,787 were permanent, 107 temporary, and 41 non-guaranteed hours. By region, North America had 1,441 employees (USA 1,441), Latin America 941 (Brazil 793, Colombia 80, Mexico 68), and EMEA and China 1,553 (Netherlands 321, Poland 234, Czech Republic 209, Germany 131, Belgium 101, Israel 88, Spain 84, Hungary 81, UK 73, South Africa 94, other 137). Total employee turnover rate was 0.21, with 783 employees leaving in 2024.

Reference: page 133

In addition to its 3,935 employees, Fagron reported 104 other people in its own workforce at December 31, 2024. These comprised 18 self-employed managers and 86 temporary workers. Temporary workers are workers employed via an employment agency or other companies active under NACE code N78, included if they work at Fagron for more than 0.3 FTE for at least three months. Together with employees, self-employed managers and temporary workers make up Our people, totaling 4,039 people. Disclosures generally concern Fagron employees, but where deemed applicable Fagron also reports on self-employed managers and temporary workers. For health and safety, training reached 86% of Our people. Fagron did not yet monitor work-related injuries among non-employees in its own workforce in 2024 but will start in 2025.

Reference: page 151

By end 2024, 1,297 Fagron employees were covered by a collective bargaining agreement, equaling 33% of all employees. Across the European Economic Area countries where Fagron is active, multiple collective bargaining agreements apply to portions of its workforce, notably in the Netherlands and the Czech Republic. At end 2024, workers' representatives were present in some facilities in Brazil, Colombia, Czech Republic, Germany, Hungary, Israel, and the Netherlands. Coverage by region ranged from 0-19% (Germany, Hungary, Poland, North America) to 80-100% (Belgium, Spain). Fagron has not entered into any agreement with employees on representation by an EWC, SE Works Council, or SCE Works Council. The coverage underscores Fagron's commitment to respecting the right to collective bargaining and social dialogue.

Reference: page 140

Fagron reports gender diversity for top management, all management, and employees. In top management (96 people in 2024) the split was 68.8% male (66) and 31.3% female (30), close to the one-third senior management target. In management (273 people) the split was 56.0% male (153) and 44.0% female (120), up from 40.4% female in 2023. Among all 3,935 employees, the split was 43.3% male (1,703), 56.5% female (2,223), and 0.2% other gender (9). By age, 25% of employees were under 30, 56% aged 30-50, and 18% over 50 in 2024. The target is 50% female representation in management by end 2030 (44.0% in 2024).

Reference: page 147

Fagron assessed adequate wages for the first time in 2024, using region-specific benchmarks: applicable minimum or collective bargaining wages in EEA countries, Brazil, Israel, the UK, and the USA, and Global Living Wage initiative benchmarks for China, Colombia, Mexico, and South Africa where minimum wages do not provide a decent standard of living. Wage components included basic wage and guaranteed fixed additional payments. Based on the selected benchmarks, 99.3% of all employees were paid an adequate wage. The exceptions were Colombia, where 32% of employees (26 employees) earned below the benchmark, and Mexico, where 3% (2 employees) earned below it. Fagron will assess the wages and benchmarks for Colombia and Mexico in more detail in 2025 and aims for an adequate wage for all employees by 2026.

Reference: page 143

In 2024, 98.2% of employees engaged in an annual performance and career development review, up from 97.3% in 2023, surpassing the target. The female rate was 98.4% and the male rate 97.9%. On average, each employee took part in 1.7 reviews in 2024 (1.8 in 2023). Percentages exclude employees with an on-call contract and those without a user account in the first quarter of 2024. Fagron does not currently measure training hours and has no policy or target on training hours per employee. In 2024 it began setting up a monitoring system for training hours, with monitoring starting in 2025 and results to be published in the 2025 annual report in accordance with the CSRD.

Reference: page 145

In 2024, there were zero work-related fatalities among employees, zero among non-employees in the own workforce, and zero among value chain workers on Fagron sites. There were zero work-related long-term or permanent injuries among employees. Other recordable work-related injuries totaled 22 employees, for total recordable work-related injuries of 22, a significant reduction from 35 in 2023. Total hours worked by employees were estimated at 6,488,300, giving a rate of work-related injuries of 3.4 per million hours worked, down from 6.1 in 2023. Annual health and safety training was completed by 3,489 of 4,049 Our people, an 86% completion rate. Fagron did not measure indicators for work-related ill health or days lost; monitoring will start in 2025.

Reference: page 141

Fagron reported its unadjusted gender pay gap for the first time in 2024. The average pay level for female employees was 21.8 euro per hour and for male employees 25.5 euro per hour, giving a gender pay gap of 15%. The calculation uses gross hourly pay including fixed and variable remuneration and benefits. Two factors skew average pay toward men: more men in management in higher-wage regions, and more men in higher positions while more women hold lower-paid production roles. On page 148, Fagron reported its annual total remuneration ratio for the first time: the highest-paid individual received 1,954 thousand euro and median employee remuneration was 25 thousand euro, giving a pay ratio of 77.3 in 2024.

Reference: page 150

In 2024, 8 reports of possible discrimination and harassment incidents were filed through the Fagron Integrity Line (1 discrimination, 3 harassment). Investigation of 6 reports was completed in 2024, concluding that 2 incidents qualified as discrimination or harassment, and appropriate measures were taken. No fines, penalties, or compensation for damages were paid for discrimination and harassment. There were no severe human rights incidents related to Fagron's workforce, meaning no reports of forced labor, human trafficking, or child labor, and no related fines or compensation paid. There were no employees under age 18 in 2024 (2023: 1). Integrity Line reports totaled: discrimination 1, harassment 3, intimidation 4, and other complaints 13 in 2024.

Reference: page 152

Human rights and labor rights for value chain workers are part of Fagron's Future Forward foundational roadmap and apply to all value chain workers in the upstream value chain and to business partners in the downstream value chain. Fagron is committed to the Universal Declaration of Human Rights and works to combat any violation of human and labor rights. The central policy instrument is the Business Partner Code of Conduct, which sets requirements on human and labor rights (freely chosen employment, avoiding trafficking, forced and compulsory labor, child labor and young workers, non-discrimination, fair treatment, compensation and benefits including working hours, and freedom of association), health and safety, environment, ethics, and management systems. In 2024 the Code was updated to align with PSCI industry standards and is publicly available via investors.fagron.com.

Reference: page 152

Fagron's disclosures on value chain workers concern its direct suppliers, covering both the upstream value chain and business partners in the downstream value chain. Fagron does not currently differentiate between types of value chain workers. The company states that it does not have any direct engagement with value chain workers and may consider changing this in the future. Engagement on labor practices is pursued indirectly through the Business Partner Code of Conduct and the Fagron Business Partner ESG questionnaire, which suppliers are asked to complete and sign as part of the qualification process.

Reference: page 152

Under channels to raise concerns, Fagron states that at present it does not have a dedicated channel for value chain workers to raise concerns relating to human and labor rights, working conditions (including health and safety) or other topics. Fagron also does not have any direct engagement with value chain workers and may consider changing this in the future. A structured approach to remedy is not yet in place; a correction plan is under development as part of the Future Forward: Responsible Supply Chain Plan, which would allow business partners to remedy situations or, failing that, Fagron to cease the business relationship.

Reference: page 153

Fagron actively asks business partners to complete the Fagron Business Partner ESG questionnaire and sign the Business Partner Code of Conduct, which is part of the supplier qualification process. In 2024 the questionnaire was expanded with more detailed environmental and social questions, and Fagron began actively reaching out to partners with annual spend above 100,000 euro. In 2024 Fagron was admitted as an associate member of the Pharmaceutical Supply Chain Initiative (PSCI) for three years. With PSCI knowledge, Fagron started developing a Future Forward: Responsible Supply Chain Plan including a standardized risk assessment framework, an audit and monitoring plan for at-risk suppliers, and a correction plan. All suppliers of pharmaceutical raw materials comply with GMP or ISO 19001 certification, verified through regular quality audits, which have never revealed an indication of human rights violations.

Reference: page 153

As part of its strategic sustainability roadmap, Fagron targets that by 2030, 75% of its Tier 1 suppliers adhere to the Fagron ESG standards, one condition of which is that suppliers sign the Fagron Business Partner Code of Conduct. The percentage is calculated by dividing spend on trade goods of suppliers who have signed the Code by total spend on trade goods. In 2024 the Business Partner Code of Conduct was signed by 27% of Tier 1 suppliers, up from 12% in 2023 and 11% in 2022. There is no baseline reduction value because the targets do not include a reduction compared to a base year. Fagron does not engage directly with value chain workers to track performance against targets.

Reference: page 157

Fagron's policies for end-users cover three material topics: access to healthcare, privacy of end-users, and product quality and safety. Access to healthcare is anchored in the Future Forward: Compounding strategic pillar. Privacy of end-users is included in the foundational roadmap, with the commitment to keep patients' medical information private, adhering to local privacy regulations including the EU GDPR. Product quality and safety is part of the foundational roadmap, with the objective to deliver products that meet all product quality and safety requirements; quality is a core value and Fagron's facilities are GMP/GDP compliant. Fagron believes its end-user policies align with relevant internationally recognized instruments, including the UN Guiding Principles on Business and Human Rights.

Reference: page 155

Fagron's disclosures on end-users concern Fagron and its downstream value chain and apply to all end-users. Fagron primarily supplies pharmacies, hospitals, and clinics that use its products and services for medication compounding, and typically does not supply directly to or have access to patients. Stakeholder engagement informing the policies on end-users is conducted through Fagron's stakeholder engagement process and the materiality assessment. Per the ESRS Index (S4-2), engagement with end-users is covered under Stakeholder engagement. In 2024, no severe human rights incidents related to consumers and end-users were reported through Fagron's channels.

Reference: page 155

Fagron currently provides two channels for addressing concerns of customers and end-users: the Privacy Office, as outlined in the EU Privacy Statement, which handles complaints and inquiries regarding data privacy; and dedicated channels for reporting product quality and safety issues, detailed in the quality complaints and recall procedures. At present, Fagron does not have dedicated channels for consumers or end-users to raise concerns related to human and labor rights in general, and there are currently no plans to establish such a channel. Fagron does not support or require such channels through its business relationships; for medical products it relies on strict side-effect reporting guidelines and trusts clients to inform end-users of available channels.

Reference: page 157

For privacy of end-users, no specific actions were taken in 2024 because there were no data breaches leading to loss of patient data, and no questions or complaints were submitted via the Privacy Office mailbox relating to privacy of end-users. For product quality and safety, Fagron applies an extensive supplier qualification process ensuring 100% traceability of over 2,500 pharmaceutical raw materials, multi-phase quality testing (incoming, during production, and upon release), with about two-thirds of products tested in-house and one-third by third parties. Annual GMP/GDP training is required for all personnel in contact with pharmaceutical products. Every group company has at least one channel for customers to file complaints, which trigger logged investigations and, where necessary, recalls, customer summaries, reimbursement, and remedy.

Reference: page 156

Under the Future Forward: Compounding roadmap, Fagron set targets related to access to healthcare: generate 30% of revenue from Fagron Brands by 2030, and double the number of scientific publications about compounding and Fagron Brands by 2040 compared with 2030. Progress is tracked via sales of Fagron Brands. In 2024, 15.1% of revenue came from the Brands segment (16% in 2023). Fagron delivered approximately 57.7 million units of compounded medicine in 2024 (2023: 18.8 million), of which 57.3 million are certain. There is no baseline reduction value as targets do not include a reduction versus a base year. Fagron does not engage directly with end-users or proxies to track performance against targets.

Reference: page 161

Fagron's Code of Conduct and Ethics is the guiding document on expected behavior, covering Fagron Values, Family Rules, the grievance mechanism, corruption and bribery, human and labor rights, health and safety, and patient privacy. It applies to all employees across group companies, is publicly available, approved by the Board before publication, and reviewed every few years. An education and onboarding program ensures employees are aware of the corporate culture; all sign for receipt and commit to comply. All employees and management follow an annual Code of Conduct and Ethics training (introduced 2020); in 2024 it focused on unconscious bias, available in all relevant languages except Mandarin. In 2024, 99% of Our people and 100% of top management who received an invitation completed the training. Whistleblowers are protected under Fagron's whistleblower scheme via the confidential, anonymous Fagron Integrity Line; by end 2024, 14 of 19 countries with a Fagron presence had legal whistleblower protection.

Reference: page 152

Fagron manages supplier relationships through its Business Partner Code of Conduct (updated in 2024 to align with PSCI standards) and the Fagron Business Partner ESG questionnaire, both embedded in the supplier qualification process. Suppliers are asked to sign the Code and complete the questionnaire when their qualification is renewed; Fagron targets 75% Tier 1 supplier adherence to ESG standards by 2030 (27% signed in 2024). An extensive supplier selection procedure ensures 100% traceability of over 2,500 pharmaceutical raw materials, with on-site audits for higher-risk suppliers focused on product quality and safety. Fagron flags that parts of G1-2 (such as payment practices) are limited or not material to its business model.

Reference: page 162

The topic of corruption and bribery is in the good governance roadmap; the roadmap sets no specific corruption targets beyond those related to compliance with rules and regulations. To prevent and detect incidents, Fagron relies on the Code of Conduct and Ethics, an internal audit procedure, and the grievance mechanism. The internal audit department provides independent assurance, with all companies covered approximately every three years, and audits always examine financial control processes; findings, including potential corruption incidents, are reported to the Audit and Risk Committee. The Code sets anti-corruption and anti-bribery expectations on record keeping, conflicts of interest, donations, government officials, facilitation payments, gifts and hospitality, and side deals. All employees follow the annual Code of Conduct and Ethics training covering anti-corruption. In 2024 Fagron defined functions at risk (top management and sourcing or sales staff, plus KornFerry grade 16 or higher) and selected a targeted external anti-corruption training to be rolled out in 2025.

Reference: page 163

In 2024, none of the entities in the Fagron Group were convicted for violation of anti-corruption and anti-bribery laws, and therefore no fines were paid for such violations. The number of convictions for violations of anti-corruption and anti-bribery laws in 2024 was 0, and the total value of fines (including all fines above 3,000 euro per fine) was 0. It was not necessary to take actions to address breaches in anti-corruption and anti-bribery procedures and standards. In 2024, no cases of corruption and bribery were reported through the Fagron Integrity Line (2023: 0 reports related to corruption and bribery as well).