Leroy Merlin España

The company's administrative, management, and supervisory bodies are the Board of Directors, the Audit Committee, and the Executive Leader Team. The Compliance Department and the Iberian Audit Department (both part of ADEO Holding Iberia, SA, the parent company of LEROY MERLIN Spain), as well as the Internal Control and Human Resources Departments, the Ethics Committee, and the Internal Control Body, are responsible for monitoring impacts on their areas of responsibility and for detecting and assessing the company's risks.

The Audit Committee is composed, as of December 31, 2024, of Pablo Óscar Adán Castro, Olivier Debeunne and Yann Jöel Christian Dubourthoumieu, the latter acting as its Chairman, for the statutory term of four years ending on December 31, 2027. Juan Maggio and Paula Ordoñez act as Secretary and Deputy Secretary, respectively, of this body.

There is no direct employee representation within the Board of Directors or the Audit Committee. The Executive Leader Team is made up of the leaders of each area (executive directors), who thus represent the employees in their respective areas.

The Ethics Committee, managed by the Compliance Department, oversees business conduct. The Director of Ethics and Compliance chairs the Committee. A compliance function report, issued by the Ethics Committee, is shared annually with the Board of Directors, summarizing all actions related to the company's compliance programs.

Composition and Diversity

Diversity

Diversity

In line with their track records, the members of the Board of Directors and Executive Leader Team have experience in business conduct issues, as well as extensive experience in the retail sector. The assessment of the knowledge or suitability of the Commission members' profiles is carried out within the Board. Their professional positions imply that they have knowledge of auditing and sustainability.

Throughout 2024, two specific sustainability training sessions were held for the Executive Leader Team: a specific in-person module on sustainability in the Power Leader Lap program and Climate Mural, in-person training focused on climate change and its effects.

The results of the materiality assessment and risk analysis are communicated and validated annually with the Positive Impact Executive Leader. The Positive Impact Executive Leader then communicates the publication of the sustainability information to the Executive Leader Team. Finally, the Board of Directors also approves the information included in the report annually.

In 2024, while topics related to impacts, risks, and opportunities have been addressed in the oversight of the company's strategy and decision-making, they have not been explicitly addressed as part of the dual materiality process. This is because this is the first time this methodology has been applied.

Material impacts, risks and opportunities addressed by governing bodies:

Board of Directors and/or Audit Committee:

• Impacts: Contribution to the protection of working conditions and human rights in the value chain through audits and internal control; Protection of sustainability and ethical principles in the value chain through audits and internal control
• Risks: Inadequate management of ethical alerts or complaints
• Opportunities: A culture of ethical and responsible conduct in the company that strengthens its reputation among stakeholders

Steering Committee:

• Addressed extensive list of material impacts, risks and opportunities across ESG topics including working conditions, customer experience, climate change, cybersecurity, and business conduct

At LEROY MERLIN Spain, the position of director is unpaid, so the members of the governing body (Board of Directors) do not have an incentive system.

The members of the executive leadership team do have an incentive system consisting of:

Progress bonuses (quarterly variable)

Applies to all LEROY MERLIN Spain employees. Rewards progress in Gross Merchandise Value and results of each store, region, and headquarters. Includes achievement of two qualitative objectives related to sustainability:

• Customer satisfaction (NPS objective)
• Employee safety (frequency rate objective)

Awarded four times a year with maximum quarterly and annual limit of 25%.

Profit-sharing rate (annual variable)

Applies to all employees, rewarded for company performance. Rate percentage applied to gross annual salary, capped at 15%.

Share Revaluation (VALADEO)

All employees become shareholders in ADEO Group. Share price appreciation influenced by results achieved in the ADEO Positive Index, which measures company performance through ten key indicators including:

• Occupational accident frequency rate
• Workplace accident severity index
• Percentage of employees trained in Code of Ethics
• Percentage of female directors and managers
• Training hours per employee
• Employee satisfaction index (eNPS)
• Percentage of suppliers signing Code of Conduct
• Sales share of products with Home Index rating A, B or C
• Direct carbon emissions (scopes 1 and 2)
• Product lifecycle carbon emissions (Scope 3)
• Sale of products that allow customers to avoid emissions
• Percentage of renewable energy consumption
• Percentage of waste recovered

Long-term incentive for management team

Senior management has long-term incentives with environmental or social indicators depending on their mission, primarily related to health and safety, carbon footprint, and customer satisfaction.

It is not possible to provide a consolidated percentage of executive compensation that depends on sustainability-related goals, since each profile may have different indicators.

Below are the main stages of due diligence and their coverage in LEROY MERLIN Spain's sustainability statement:

Essential Elements of Due Diligence:

Integrating due diligence into governance, strategy, and business model:

• ESRS 2 GOV-2: Information provided to administrative, management and supervisory bodies
• ESRS 2 GOV-3: Integrating Sustainability-Related Performance into Incentive Systems
• ESRS 2 SBM-3: Material impacts, risks and opportunities and their interaction with strategy and business model
• ESRS S1-1: Policies related to own personnel
• ESRS S2-1: Policies related to workers in the value chain
• ESRS G1-1: Corporate Culture and Business Conduct Policies

Collaboration with affected stakeholders at all key stages:

• ESRS 2 GOV-2, SBM-2: Stakeholder Interests and Opinions
• ESRS 2 IRO-1: Description of processes for determining and assessing material impacts, risks and opportunities

Identification and assessment of adverse impacts:

• ESRS 2 IRO-1 and SBM-3

Adoption of measures to address adverse impacts:

• ESRS E1-1: Climate Change Mitigation Transition Plan
• ESRS E5-2: Actions and resources related to use of resources and circular economy
• ESRS S1-4, S2-4, S3-4: Actions taken regarding material impacts on respective stakeholders

Monitoring effectiveness and communication:

• Reported specifically in different thematic ESRS across all material topics

The sustainability reporting information request process consists of six stages:

1. Materiality analysis (every two years): third quarter of current year
2. Launch of process and collection of qualitative information: third quarter of current year
3. Collection of quantitative information: fourth quarter of current year and first quarter of following year
4. Drafting of Sustainability Report document: first and second quarter of following year
5. Validation of information by areas and Executive Committee: first and second quarter of following year
6. Publication of Sustainability Report: second quarter of following year

The ESG Reporting team, within the Positive Impact area, coordinates and monitors the entire sustainability reporting process, applying various forms of validation and control:

• During information collection phase, data reporters must validate information with their direct supervisor
• ESG Reporting team thoroughly reviews all data and requests clarification when necessary
• Document is periodically reviewed by the team with several final rereads
• Final document is shared with Executive Leader Team for knowledge, review, and validation

Main risks identified:

• Points of error or failure in data processes, from origin to consolidation and reporting
• Failure to comply with established deadlines for collecting information and evidence
• Lack of understanding by those responsible for reporting about required data or evidence
• Inconsistencies in information traceability due to use of different digital platforms or formats

To mitigate these risks, validation and control processes include review and approval processes, verifications, and controls carried out by both the organization and an independent third party.

In 2024, no periodic notifications have been made to the administrative, management and supervisory bodies related to risk management and internal controls for sustainability information disclosure.

We are a company dedicated to home improvement and renovation, part of ADEO, a group focused on home improvement, DIY, construction, and renovation projects. LEROY MERLIN aims to be a relevant company in Spain, contributing positively to employees, customers, suppliers, and society. Our business model is based on values, placing people at the center of our decisions.

Value Chain

Previous stages: Activities related to manufacturing, extraction, storage, and transportation of products. Main agents are strategic suppliers responsible for extracting raw materials and finished products.

Company position: Key position focused on selling products and providing services to consumers through:

• Products: Wide range segmented into Project, Rehabilitation, Garden, Technical and Decorative categories
• Services: Installation services, tool rental, B2B solutions, Hogami Platform
• Sales channels: 130 stores, e-commerce website, mobile app, marketplace, telephone sales
• After-sales service: Customer service, complaint management, Club Leroy Merlin loyalty program

Later stage: Responsible end-of-life management promoting circular economy practices through repair, rental and sale of products with minor cosmetic damage.

Products and Services

Products: Furniture, bathrooms, garden, lighting, decoration, wood, kitchens, doors/windows/stairs, flooring, heating/air conditioning, tools, paint, construction materials, electricity/home automation, ceramics, hardware/security, plumbing, renewable energies

Services: Hogami installation service, project service, telephone sales, tool rental

Markets and Customer Groups

• Final consumer/resident: entire Spanish market
• Corporate clients: managed by Major Accounts Department
• PRO Clients: professional clients in renovation and construction sector

Financial Results

Strategy Objectives 2024

Battle 1: Platform business model - 5-star omnichannel experience, improving customer experience, reducing friction

Battle 2: Improving value proposition - Competitive portfolio coverage, strengthening omnichannel brand proposition

Battle 3: Sustainability of business model - Improving net margins, supply chain efficiency, quality stock management

Battle 4: Leaders of positive future - Diverse and inclusive workforce, employee safety, sustainable living through Home Index, circular consumption, social action commitment

LEROY MERLIN Spain is integrating sustainability into its business model through the Home Index project (measuring environmental and social impact of products), energy efficiency market focus, and circular economy services (rentals, repairs). The Circlewood project promotes wood recycling and transformation into new products.

The purpose of stakeholder engagement is to foster communication and dialogue with key groups affected by our decisions and actions. Stakeholder engagement allows us to align interests, identify and manage potential impacts, and ensure decisions reflect the needs and expectations of those involved.

Stakeholder Engagement Process

During 2023, to determine material issues impact on stakeholders:

• Surveys and direct interviews with suppliers, customers, and unions
• In-depth interview with CEO of LEROY MERLIN Spain
• Session with internal working group of key company areas

Key Stakeholders and Communication Channels

In 2024, the administrative, management, and oversight bodies were not informed about stakeholder opinions regarding sustainability-related impacts, as this was the first dual materiality study using this methodology. The company's strategy considers ongoing stakeholder interests and opinions, particularly customer and employee satisfaction results.

Material impacts, risks and opportunities have been identified through the dual materiality assessment across the value chain and their interaction with strategy and business model:

Environmental (E1 - Climate Change)

Opportunities:

• New business opportunities associated with just transition
• New business opportunities associated with eco-design and product innovation
• New business opportunities associated with lifestyle changes and responsible consumption trends
• Recognition as company committed to responsible consumption and sustainable living habits

Impacts:

• Contribution to energy renovation and sustainability in homes through products and services (Positive, Current)
• Contribution to responsible consumption and sustainable living habits through Home Index and communication initiatives (Positive, Potential)
• Multiple negative potential impacts from failure to reduce carbon footprint across logistics, product manufacturing, transport, use and end-of-life

Risks:

• Company exposure to physical and transition risks from climate change
• Increased financial resource allocation for carbon footprint costs
• Failure to meet sustainability goals due to inability to reduce carbon footprint

Social - Own Workforce (S1)

Opportunities:

• Positive and collaborative work environment improving satisfaction and performance
• Increased ability to attract and retain talent through good employer perception
• Increased productivity through employee engagement policies

Impacts:

• Improving job satisfaction through positive collaborative environment (Positive, Current)
• Improved working conditions through professional growth opportunities (Positive, Potential)
• Improved working conditions contributing to financial security (Positive, Current)
• Various negative impacts related to work-life balance, workload, discrimination

Risks:

• Difficulty attracting and retaining necessary talent
• Loss of employee satisfaction due to various factors (workload, work-life balance, discrimination, harassment)
• Legal proceedings from accidents/occupational diseases

Social - Value Chain Workers (S2)

Impacts:

• Contribution to protection of working conditions and human rights through audits (Positive, Current)
• Accidents/illnesses in suppliers from work for company (Negative, Current)

Risks:

• Legal proceedings from harassment cases by subcontractors/suppliers

Social - Communities (S3)

Not extensively detailed in the provided section, but referenced in stakeholder engagement.

Social - Customers (S4)

Impacts:

• Improved customer experience through clear environmental/social product information via Home Index (Positive, Potential)
• Improved satisfaction through product affordability commitment (Positive, Potential)
• Improved satisfaction through authentic experience and excellent service (Positive, Potential)
• Improved experience through digital innovation and new business solutions (Positive, Potential)

Risks:

• Legal proceedings from product quality/safety issues
• Legal proceedings from store accidents affecting customers
• Loss of customer satisfaction from inability to offer products improving housing conditions

Governance (G1)

Opportunities:

• Culture of ethical and responsible conduct strengthening reputation
• Positioning in sustainability increasing reputation and recognition
• Participation in sustainability alliances fostering collaboration

Impacts:

• Protection of sustainability and ethical principles in value chain through audits (Positive, Current)
• Loss of information/personal data due to cybersecurity breaches (Negative, Potential)

Risks:

• Inadequate management of ethical alerts or complaints
• Exposure to security breaches or information leaks
• Loss of customer confidence due to phishing attacks

These impacts, risks and opportunities are integrated into the company's four strategic 'battles' and inform the development of policies, actions, and targets across all ESG areas.

The company's risk management process and various existing risk matrices have been a fundamental basis for identifying impacts, risks, and opportunities in the dual materiality process.

The process has changed compared to last year because, this time, the assessment was conducted in accordance with the new requirements of the Corporate Sustainability Reporting Directive. The latest modification was to align with these requirements, allowing better reflection of both current risks and opportunities. A further review will be conducted in 2025 to adapt to potential regulatory changes and continue improving impact management throughout the entire value chain.

Dual Materiality Assessment Process

The dual materiality study was conducted in 2024 using the new ESRS methodology. During 2023, to determine the impact of material issues on stakeholders:

• Surveys and direct interviews with broad range of groups including suppliers, customers, and unions for the first time
• In-depth interview with CEO to incorporate management's vision on key sustainability issues
• Internal working group session with key company areas to review and validate material topics

In 2024, the dual materiality study was updated through identification and assessment of impacts, risks, and opportunities across the entire value chain.

Time Horizons

• Short-term: one fiscal year
• Medium-term: from end of short-term reference period to five years later
• Long-term: more than five years

Stakeholder Engagement in Assessment

Stakeholders consulted included customers and consumers, collaborators, suppliers, institutions and business community, with identification of key sustainability topics as priorities for each group.

The results of the materiality assessment and risk analysis are communicated and validated annually with the Positive Impact Executive Leader, then communicated to the Executive Leader Team, and finally approved by the Board of Directors.

This is the first year implementing this dual materiality methodology, representing a significant enhancement to the company's approach to sustainability impact, risk and opportunity identification and management.

See Annex 3 for the complete disclosure requirements covered by the Sustainability Statement of LEROY MERLIN Spain. The company has determined its material topics through the dual materiality assessment and is reporting on the following ESRS:

• ESRS 2 - General Disclosures (all companies must report)
• E1 - Climate Change (material)
• E5 - Resource Use and Circular Economy (material)
• S1 - Own Workforce (material)
• S2 - Workers in the Value Chain (material)
• S3 - Affected Communities (material)
• S4 - Consumers and End-Users (material)
• G1 - Business Conduct (material)

Other ESRS topics (E2 Pollution, E3 Water and Marine Resources, E4 Biodiversity and Ecosystems) were assessed but determined to be not material for the company based on the dual materiality assessment.

This is the first year of ESRS reporting for LEROY MERLIN Spain, representing alignment with the Corporate Sustainability Reporting Directive requirements.

Transition plan for climate change mitigation

Plan status and scope

At LEROY MERLIN Spain, we are demonstrating our commitment to climate change mitigation through various decarbonization initiatives. At the end of 2024, and although various initiatives and measures are in place to promote decarbonization, the company is still working on a transition plan that brings together all these actions and promotes the goal of reducing greenhouse gas (GHG) emissions.

The decarbonization measures consider direct emissions from LEROY MERLIN Spain's operations (scope 1), indirect emissions associated with electricity consumption (scope 2) and indirect emissions throughout the value chain (scope 3).

Net zero / carbon neutrality targets

ADEO has committed to reducing GHG emissions by 50% by 2035 and achieving climate neutrality by 2050. These targets, as of the end of 2024, have not been independently verified. ADEO is expected to submit the methodology and targets to the Science Based Targets Initiative (SBTi) throughout 2025, and therefore, they are expected to be aligned throughout the next fiscal year.

Emissions reduction targets and baselines

For 2024, LEROY MERLIN Spain has set a target focused on reducing Scope 1 and 2 emissions by at least 5% compared to 2023.

The Scope 1 and 2 emissions reduction target has been calculated based on LEROY MERLIN Spain's total annual emissions for its operations, according to the Greenhouse Gas Protocol (GHG Protocol), with 2023 as the baseline year of comparison. The target applies to all of the company's operations in Spain. At the end of the reporting period, this or any other targets had not been submitted to the Science Based Targets Initiative (SBTi) for validation. ADEO is expected to submit these targets in 2025, which will allow us to establish new Scope 1, 2, and 3 emissions reduction targets for future fiscal years.

The details of the goals disaggregated by scope and from the year defined as the base year (2021) are not reported because, at the end of this fiscal year, they are undergoing internal validation by ADEO and LEROY MERLIN Spain.

Alignment with 1.5°C / SBTi validation status

As of the end of 2024, targets have not been independently verified or submitted to SBTi. ADEO is expected to submit the methodology and targets to the Science Based Targets Initiative (SBTi) throughout 2025.

Decarbonization levers and pillars

We put special focus on the following reduction lines:

• Emissions associated with the operations of our stores and headquarters, which are addressed based on their scope: Scope 1 (energy and refrigerants), Scope 2 (electricity), and Scope 3 (waste and logistics).
• Our products' emissions (Scope 3), so we are working to improve our offering by promoting alternatives that contribute to reducing GHG emissions at all stages of their life cycle.

Scope 1 and 2 initiatives

Regarding scopes 1 and 2, at LEROY MERLÍN Spain, we are committed to installing photovoltaic panels at our locations to reduce emissions and increase our energy independence. We also opt for the use of energy with a guarantee of origin to cover our remaining electrical needs and promote energy efficiency in our stores.

To reduce Scope 2 emissions, we have 100% renewable photovoltaic panels and certificates of origin, and we are making progress in ensuring that future energy purchase agreements help us minimize related emissions.

Scope 3 initiatives

Regarding Scope 3 emissions from our operations, we work with logistics flows within the Lean & Green initiative promoted by AECOC, the Association of Manufacturers and Distributors, to reduce pollution associated with the transportation of our products.

Our carbon footprint analysis determined that the greatest impact of our emissions is associated with our products. The use phase accounts for more than 90% of emissions, so most mitigation efforts are focused on this phase. Therefore, we work on decarbonization pathways with our sales team and suppliers, grouping products by type to propose the most relevant emission reduction actions based on the product type.

Scope 3 continues to have the greatest impact, in terms of other non-product-related emissions. This includes waste management, logistics movements, and internal travel, processes we are currently working on.

Product decarbonization strategy

Our product decarbonization strategy consists of classifying products into categories ("10 necessity units") based on their end use. For each use, we identify decarbonization levers that contribute to reducing the carbon footprint for the most impactful lifecycle phase.

Of note is the launch of the Home Index in 2024, a key strategic project for the company in this area. This indicator measures the environmental and social impact of a product throughout its life cycle, from production to final disposal. Products are given a letter grade, from "A" (products with the lowest environmental impact) to "E" (those requiring significant improvements). This tool helps customers make informed decisions and serves as an internal guide for us and our suppliers on the path to decarbonizing our product offering.

CapEx / investment commitments

The details of significant operating expenses (OpEx) and capital expenditures (CapEx) are available in the section 'Current and future financial and other resources'.

At the end of 2024, the company did not have a CapEx plan to align its economic activities with the taxonomy. However, due to the company's development, taxonomic CapEx has been increasing since 2022, reaching 12.83% in the 2024 report, and the company monitors investments classified as having a "positive impact."

Locked-in emissions and stranded assets

On our path toward decarbonization, we recognize that there are locked-in GHG emissions that are part of the routine operations of our assets, primarily associated with recharging refrigerant gases in air conditioning equipment. Although we are working to opt for the least polluting options, equipment optimization is still necessary to operate with refrigerant gases with a lower GWP (global warming potential) impact, i.e., those that contribute less to climate change.

On the other hand, reducing emissions from the use phase of the products we sell is a challenge. Many of the items in our offering, such as household appliances and power tools, require energy consumption, so their impact will vary depending on the average electricity mix of the country in which they are used. We are also limited by current technological advances in the industry, which, while evolving toward the production of increasingly efficient products, remains highly dependent on high energy consumption.

Carbon credits / removals

By the end of 2024, the company was a member of Lean&Green, the largest European collaboration platform specifically focused on reducing supply chain emissions. This international initiative aims to help companies across all sectors reduce their greenhouse gas emissions from logistics activities in order to achieve the carbon-neutral emissions targets set at the Paris Climate Summit (COP21) by 2050.

Integration with strategy and business model

These measures are integrated and aligned with the company's overall strategy and planning. One of LEROY MERLIN Spain's main strategic lines, "We are leaders of a positive future," included in the company's Strategic Plan for 2024, focuses on sustainability, innovation, and social commitment. Its objective, "We promote a sustainable habitat," is realized through several initiatives related to improving the social and environmental impact of products, reducing the carbon footprint, and promoting new forms of the circular economy.

Progress in 2024

Significant progress has been made in implementation in 2024:

• We're reducing the impact of our electricity needs by achieving nearly 100% of our purchased electricity in 2024 with a renewable energy certification. We've also slightly reduced our energy consumption in 2024 compared to 2023.
• We continue to advance toward energy self-consumption by expanding our photovoltaic installations in 10 additional stores. With this progress, 36 of our establishments now have photovoltaic installations, reaching a total installed capacity of nearly 6,000 kWp.
• We've strengthened our commitment to decarbonizing our logistics processes, having reduced the carbon footprint associated with these activities year after year. This has allowed us to maintain the star rating we earned last year under the Lean & Green initiative.
• We significantly increased the sale of products with a lower associated carbon footprint, such as more efficient air conditioning equipment or thinner ceramic tiles, and promoted the sale of lower-flow faucets, helping to reduce water and energy consumption.
• We've increased our offering of products with a Home Index rating of A, B, or C since launch, which currently accounts for more than half of the total, promoting more conscious and responsible purchasing among our consumers.

Remote work model

Our remote work model, which promotes carbon footprint reduction by reducing employee travel, is linked to the material impact on our own staff: "Improved work-life balance through flexible working hours and remote work for office employees." While the measures included in the remote work model are not part of a formal corporate transition plan, it is linked to actions aimed at reducing negative impacts on the environment and achieving more climate-sustainable operations.

Policies related to climate change mitigation and adaptation

Environmental Policy

LEROY MERLIN Spain has an Environmental Policy whose general objective is to establish the principles of action to promote environmental protection and respect, as well as actions aimed at minimizing environmental risks and negative impacts on the environment.

Key principles related to climate change:

• Fight against climate change
• Promoting sustainable logistics
• Responsible and committed supply chain

Material topics addressed: The policy addresses material impacts, risks, and opportunities related to climate change, including:

• Contribution to energy renovation and sustainability in homes through products and services
• Contribution to responsible consumption and sustainable living habits
• Contribution to climate change due to carbon footprint in logistics, product manufacturing, and transport/distribution
• Issues related to climate change mitigation, energy efficiency, and deployment of renewable energy
• Commitment to renewable energy consumption and energy efficiency in facilities
• Commitment to improving the quality of homes through marketing of sustainable solutions with the lowest possible environmental impact
• Promoting responsible consumption

Stakeholder involvement: Stakeholders were not directly involved in the design of this policy, but it takes into account and includes explicit references to the commitment to customers (offering products with minimal environmental impact), employee involvement, and conveying these principles in the relationship with suppliers.

Public availability: The policy is made publicly available to any stakeholder on the company's corporate website.

Monitoring and future development: LEROY MERLIN Spain plans to implement a specific climate change policy, thus updating its environmental policy, starting in 2025.

Note: The Environmental Policy includes a general reference to the fight against climate change but does not appear to include specific references to international frameworks (UNGPs, OECD MNE Guidelines, ILO Conventions, UNGC, etc.) based on the excerpts provided.

Actions and resources in relation to climate change policies

Leroy Merlin España reports four main decarbonization and adaptation actions aligned with its climate commitments. The company is working toward ADEO's targets of 50% GHG reduction by 2035 and climate neutrality by 2050 (pending SBTi validation in 2025).

ACTION 1: Promoting energy efficiency and green energy in our facilities

Lever: Reduction of emissions associated with our activity

Scope: Own operations (stores, headquarters, logistics warehouses in Spain)

Key actions:

• Investment in photovoltaic panels installed on assets
• Definition of sustainable construction standard for stores (insulation, efficient air conditioning, indoor air quality sensors, fans, non-polluting gases, LED lighting)
• Plans to improve energy efficiency of existing stores (e.g., replacing air conditioning equipment)
• Monitoring and sustainable management of consumption

Time horizon: Reference period 2024. Measures implemented since previous periods and will continue in subsequent periods.

Progress achieved in 2024:

• Installation of 10 new photovoltaic installations, reaching total installed capacity of nearly 6,000 kWp
• 33 stores now have photovoltaic technology, with further installations planned for 2025
• Transition to LED lighting in four new stores
• RoofTop equipment replacement
• Construction of 12 new charging stations for electric and hybrid vehicles
• BREEAM Certification obtained for new stores in Llica and Finestrat, with six more in progress
• Energy audits conducted for 23 facilities, headquarters, and logistics warehouses in Torija and Meco (per Royal Decree 56/2016)

Policy/target linkage: Aligned with commitment to protecting the environment and combating climate change by minimizing environmental risks and negative impacts associated with facilities.

Resources allocated (2024):

• OpEx: €88,560
• CapEx: €3.8 million
• Total: €4 million
• OpEx allocated to 'Other operating expenses – External services'
• CapEx allocated to 'Tangible fixed assets' (Land and buildings, Fixed assets in progress and advances)

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ACTION 2: Promoting the marketing of products with a lower environmental and social impact and investing in the energy renewal market

Lever: Innovation in own catalogue with improved energy efficiency

Scope: Value chain - customers, consumers, suppliers, employees, and planet

Key actions:

• Boosting sale of products with Home Index rating A, B, or C (target: 65% of sales volume by 2025)
• Definition of decarbonization trajectories and action plans for 2035 for product families with greatest environmental impact
• Marketing of energy renewal products as company objective
• Training for internal teams at all levels in sustainability, energy efficiency, and climate change
• Implementation of training and support plan for key suppliers to improve sustainable product offering
• Developing strategy with sales teams and suppliers to reduce footprint of highest-impact products

Time horizon:

• Short-term: 65% of sales volume from products rated A, B, or C by 2025
• Medium-term: 50% emissions reduction by 2035 (ADEO Group level target) for product families with greatest environmental impact

Policy/target linkage: Aligned with commitment to transitioning toward business model that promotes manufacturing and consumption of products with lower environmental and social impact; contributes to promoting responsible consumption among customers.

Mitigation actions: Carbon footprint analysis determined greatest impact (>90%) is in product use phase, so mitigation efforts focused on this phase.

Progress achieved in 2024:

• Creation and implementation of Home Index in 2024, with continued development planned for 2025

Resources allocated (2024):

• OpEx: €30.1 million (personnel expenses)
• CapEx: N/A
• Total: €30.1 million

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ACTION 3: Promoting the reduction of the carbon footprint associated with logistics processes

Lever: Reduction of emissions associated with our activity

Scope: Upstream value chain - suppliers and planet

Key actions:

• Work with suppliers to analyze product impact and achieve GHG emissions reduction
• Designing sustainability plans promoting logistics projects such as Lean & Green (largest European collaboration platform for supply chain emissions reduction)
• Maintaining first star and continuing emissions reductions

Time horizon: Commitment to reduce greenhouse gas emissions by 20% over next 5 years

Policy/target linkage: Aligned with commitment to protecting environment and combating climate change by minimizing environmental risks and negative impacts associated with supply chain.

Mitigation actions: Working toward logistics that combine efficiency and reducing environmental impact.

Progress achieved:

• Earned star in Lean & Green program, having achieved goal of reducing CO2 emissions from logistics and transportation activities by at least 20%

Resources allocated: Not quantified in excerpts.

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ACTION 4: Empowering customers to make decisions to make their homes more sustainable

Lever: Innovation in own catalogue with improved energy efficiency

Scope: Value chain - employees, suppliers, customers and consumers, parent company, institutions, and planet

Key actions:

• Launch of Home Index rating in 2024: indicator measuring product's environmental and social impact throughout life cycle, with letter grades from "A" (lowest environmental impact) to "E" (requiring significant improvements)
• Offering products and services to facilitate energy renovation in homes:
  • Products using renewable energy: solar panels, aerothermal energy, controlled mechanical ventilation
  • Technical services related to air conditioning, heating, and temperature control
  • Rehabilitation services related to insulation, windows and doors, and awnings

Partnerships and engagement:

• Internal and external communications plan linked to Positive Ambassadors program engaging 18,000 employees
• Collaboration with suppliers to promote eco-design and identify high-impact phases
• Collaboration with Commissioner for Circular Economy of Ministry for Ecological Transition and Demographic Challenge
• Coordination with Ministry of Consumer Affairs and Industry senior representatives
• Coordination with DIY and Hardware Manufacturers Association management to define ecodesign and Home Index training for manufacturer teams

Policy/target linkage: Aligned with commitment to transitioning toward business model promoting manufacturing and consumption of products with lower environmental and social impact; contributes to promoting responsible consumption among customers.

Purpose: Drive paradigm shift across entire value chain, from product design and manufacturing to purchase and use by end consumer. Helps customers make informed decisions and serves as internal guide for companies and suppliers in decarbonization efforts.

Resources allocated: Not separately quantified (included in Action 2).

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Achieved GHG emissions reductions (2024)

Further Scope 2 reductions expected throughout 2025, associated with responsible energy use promotion and possible implementation of PPAs (Power Purchase Agreements).

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Energy Saving Certificates (ESCs)

In 2024, the company obtained income of €883,436.60 from issuance of Energy Saving Certificates (ESCs), representing monetization of energy savings from efficiency measures (lighting changes, improved thermal insulation, renovation of industrial equipment, etc.). This represents a qualitatively significant positive financial impact associated with just transition business opportunities.

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Total quantified resources allocated to climate actions (2024)

Note: Resources for Action 3 (logistics) and Action 4 (customer empowerment) not separately quantified. Allocation for 2025 not yet planned. Company notes that ability to execute actions depends largely on availability and allocation of financial, human, and material resources.

Targets related to climate change mitigation and adaptation

Target 1: ADEO Group GHG Emissions Reduction

Target metric: GHG emissions reduction

Target value: 50% reduction

Target year: 2035

Baseline year: Not disclosed

Baseline value: Not disclosed

Scope: ADEO Group level (parent company of Leroy Merlin España)

Type: Not specified (absolute or intensity)

Validation status: Not independently verified as of end of 2024. ADEO expected to submit methodology and targets to Science Based Targets Initiative (SBTi) throughout 2025.

Progress to date: Not disclosed

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Target 2: ADEO Group Climate Neutrality

Target metric: Climate neutrality

Target value: Net zero/climate neutrality

Target year: 2050

Baseline year: Not disclosed

Baseline value: Not disclosed

Scope: ADEO Group level

Type: Absolute

Validation status: Not independently verified as of end of 2024. Expected SBTi submission in 2025.

Progress to date: Not disclosed

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Target 3: Leroy Merlin Spain Scope 1 and 2 Emissions Reduction (2024 reporting period)

Target metric: Scope 1 and 2 GHG emissions reduction

Target value: At least 5% reduction

Target year: 2024 (compared to 2023)

Baseline year: 2023

Baseline value: Not disclosed

Scope: All of the company's operations in Spain (Scope 1: energy and refrigerants; Scope 2: electricity)

Type: Not specified (absolute or intensity)

Validation status: Not submitted to SBTi. Internal target. Details disaggregated by scope from base year (2021) not reported as undergoing internal validation by ADEO and Leroy Merlin Spain.

Progress to date: Not disclosed

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Target 4: Home Index Product Sales

Target metric: Sales volume of products with Home Index rating of A, B, or C

Target value: 65% of sales volume

Target year: 2025

Baseline year: Not disclosed (Home Index launched in 2024)

Baseline value: Not disclosed

Scope: Products in Home Index categories

Type: Intensity-based (percentage of sales volume)

Validation status: Internal target

Progress to date: Home Index created and implemented in 2024, to continue development in 2025

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Target 5: Product Family Decarbonization

Target metric: Emissions reduction for product families with greatest environmental impact

Target value: 50% reduction (aligned with ADEO Group target)

Target year: 2035

Baseline year: Not disclosed

Baseline value: Not disclosed

Scope: Product families with greatest environmental impact (Scope 3)

Type: Not specified

Validation status: ADEO Group level target, not independently verified. Expected SBTi submission in 2025.

Progress to date: Definition of decarbonization trajectories and action plans ongoing

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Target 6: Logistics GHG Emissions Reduction

Target metric: Greenhouse gas emissions from logistics

Target value: 20% reduction

Target year: 5 years from baseline (specific year not stated)

Baseline year: Not disclosed

Baseline value: Not disclosed

Scope: Logistics and supply chain (Scope 3)

Type: Not specified

Validation status: Internal target, part of Lean & Green initiative. Leroy Merlin Spain has earned one star in the program.

Progress to date: Achieved goal of reducing CO2 emissions and earned first star in Lean & Green program; working to maintain star and continue reducing emissions

Energy consumption and mix

Energy consumption by source (MWh)

Notes on fossil electricity consumption: The consumption of energy purchased or acquired from fossil sources has been significantly reduced due to the commitment to electricity with Guarantees of Origin (GDO).

Notes on self-generated renewable energy: The significant variation between 2023 and 2024 is explained by the company's commitment to this type of energy, originating from solar panels installed on the roofs of facilities, which experienced a considerable increase in 2024.

Notes on total energy consumption: The total energy consumption data for 2023 has been adjusted to include diesel consumption.

Energy production (MWh)

Energy intensity

Scope: All company operations in Spain. The company is classified as operating in a high climate impact sector. Net revenue for 2024: €3,589,618 thousand.

Methodology: Energy consumption is calculated based on the ADEO Group methodology. Scope 2 emissions from electricity with Guarantees of Origin (GDO) use an emission factor of 0.15 (International Energy Agency, 2023). Energy intensity is calculated by dividing total energy consumption by net revenue.

Gross Scopes 1, 2, 3 and Total GHG emissions

Scope 1 GHG emissions

Methodology note: Scope 1 emissions experienced a significant drop because fewer refrigerant gas refills were carried out in 2024. Emission factors used come from ADEME (Agency for the Ecological Transition of the French Republic), IEA (International Energy Agency), CEREMA (Climat & Territoires de Demain de la République Française), and IPCC AR 6.

Biogenic CO2: LEROY MERLIN Spain's activities do not generate biogenic CO2 emissions from the combustion or degradation of biomass.

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Scope 2 GHG emissions

Methodology note: Scope 2 emissions were measured following the ADEO Group methodology, which establishes that electricity with a guarantee of origin (GDO) has an emission factor of 0.15 (International Energy Agency, 2023). Emission factors used come from ADEME, IEA, CEREMA, and IPCC AR 6.

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Scope 1+2 GHG emissions (total)

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Scope 3 GHG emissions

Methodology notes:

• Category 2: The variation between 2023 and 2024 is explained by the fact that there were no emissions associated with the construction/sale of buildings in 2024.
• Category 4: Disaggregated data is not available for 2021 and 2023. Some of this information is reported in category 9.
• Category 6: Disaggregated data is not available for 2021. Some of this information is reported in category 7.
• Category 9: The variation between 2023 and 2024 is explained by the methodological improvement developed in 2024.
• Categories 1, 11, 12: A methodological update has been made to emissions related to products sold. This update has caused a significant variation in the data. The data for 2021 and 2023 has been restated to allow comparability with 2024.
• Scope 3 excluded categories: Assets leased upstream (category 8), downstream leased assets (category 13), franchises (category 14), and investments (category 15) are not applicable.
• Estimates: Scope 3 estimates are used in category 6 (taxi travel based on invoice costs), category 7 (employee survey-based commuting), category 9 (partial mileage estimates for customer flows), and categories 1, 11, and 12 (product carbon footprint estimates by ADEO Group based on supplier data).
• Emission factors for Scope 3 come from ADEME, DEFRA (Department for Environment, Food & Rural Affairs), OECD (Organization for Economic Cooperation and Development), and EWI (EcoTransIT World Initiative).

Other CO2 emissions (not included in total):

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Total GHG emissions

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GHG intensity

Net income data: Net income data can be found in the 2024 financial statements, in the profit and loss account, where it is stated under the heading "Net revenue." Net revenue for 2023 was €3,410,786 thousand; for 2024 it was €3,589,618 thousand.

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GHG removals and carbon credits

No public declarations of GHG neutrality involving the use of carbon credits have been made through 2024.

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Internal carbon pricing

By the end of 2024, there is not enough internal information to meet the requirements associated with an internal carbon pricing system.

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Targets

ADEO has committed to reducing GHG emissions by 50% by 2035 and achieving climate neutrality by 2050. These targets, as of the end of 2024, have not been independently verified. ADEO is expected to submit the methodology and targets to the Science Based Targets Initiative (SBTi) throughout 2025.

LEROY MERLIN Spain set a target to reduce Scope 1 and 2 emissions by 5% in 2024 compared to 2023. The company achieved an 8.65% reduction (target exceeded).

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EU ETS regulated emissions

Percentage of Scope 1 GHG emissions from regulated emissions trading schemes: 0% (no regulated emissions).

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

Phase-in exemption statement

By the end of 2024, a detailed analysis of the physical and transition risks associated with climate change had not been conducted to address these requirements.

Coal, oil and gas-related revenue (RD E1-9 P. 67 e)

There is no net revenue from clients operating in coal, oil, and gas-related activities. The percentage is 0%.

Portfolio exposure to climate-related physical risks

By the end of 2024, a detailed analysis of the physical and transition risks associated with climate change had not been conducted to address these requirements.

Portfolio exposure to climate-related transition risks

By the end of 2024, a detailed analysis of the physical and transition risks associated with climate change had not been conducted to address these requirements.

Portfolio exposure to climate-related opportunities

By the end of 2024, a detailed analysis of the physical and transition risks associated with climate change had not been conducted to address these requirements.

Policies related to resource use and circular economy

Leroy Merlin Spain has disclosed one policy addressing resource use and circular economy.

Environmental Policy

General objective: To establish the company's principles of action to promote environmental protection, as well as actions aimed at minimizing environmental risks and negative impacts on the environment.

Key principle of action: The Policy includes the principle of action "promoting circular economy habits," related to the use of resources and the circular economy.

Commitments:

• Promote the concept of a circular economy in all our processes
• Participate in global and cross-sector initiatives that foster collaboration among different stakeholders to find solutions and build alliances focused on the circularization of raw materials and materials
• Minimize resource and material consumption by applying a process efficiency approach and minimizing waste generation
• Promote the acquisition of materials and goods whose components are recycled and/or reused materials and which, once their useful life has ended, can be easily recycled or reused
• Carry out proper waste management, promoting recycling and recovery
• Promote the consumption of materials that can be recovered to promote their use as raw materials at the end of their useful life in LEROY MERLIN Spain processes
• Promote, with our suppliers, the use of sustainable packaging

Coverage: The Environmental Policy includes commitments related to both:

• The transition away from the use of virgin resources, including the relative increase in the use of secondary (recycled) resources
• The sustainable sourcing and use of renewable resources

Scope: The policy applies to:

• The company's own operations
• All LEROY MERLIN Spain employees
• Includes an explicit reference to promoting the transmission and adoption of these practices with suppliers

Material impacts, risks, and opportunities addressed:

Impacts:

• Positive impacts: Promoting the circular economy through the reuse and recycling of waste generated to convert it into new resources
• Contribution to inefficient packaging due to the excessive use of paper, cardboard and plastics, among others, for product packaging

Risks:

• Failure to meet sustainability goals due to failure to reduce and manage waste generated by delivery methods
• Failure to meet sustainability goals due to the inability to implement solutions that reduce and manage the volume of waste generated by product packaging
• Legal proceedings (fines, litigation) for improper waste management practices by subcontractors

Opportunities:

• New business opportunities associated with the circular economy
• New business opportunities associated with the reuse and recycling of waste to convert it into new resources
• Contribution to environmental pollution and negative effects on human health associated with waste generation

Actions and resources related to circular economy

ACTION 7: Circular economy projects in which LEROY MERLIN Spain waste is recycled as raw material (for plastic and wood)

Key actions:

• Collaboration with suppliers to reuse certain waste, enabling it to be transformed into new products that return to our shelves
• Examples include collaborations with FINSA (Circlewood) and KETER

Policy alignment: Aligned with LEROY MERLIN Spain's commitment to promoting environmental protection and implementing actions aimed at minimizing environmental risks and negative impacts. The policy includes the guiding principle of "promoting circular economy habits."

Scope: Stakeholders involved are suppliers and the planet.

Time horizon:

• Circlewood Project: started more than three years ago, will continue into 2025
• KETER Project: started in 2024, progress will be assessed in 2025

Actions to mitigate negative impacts: Mitigation actions to minimize negative impacts are based on the implementation of projects to reduce waste generation.

Progress:

• The "Circlewood" project, in collaboration with the timber company FINSA, transforms wood waste from centers in Galicia into new products made from recycled wood, such as chipboard or decorative panels, kitchen furniture, and shoe racks, continued its course in 2024
• In 2024, a pilot project launched with the supplier KETER, specializing in garden furniture, whereby part of the plastic waste generated in two LEROY MERLIN stores in Zaragoza has been converted into the floor of a dog kennel, made from plastic waste

Impacts addressed:

• Positive: Promoting the circular economy through the reuse and recycling of waste generated to convert it into new resources
• Negative: Contribution to environmental pollution and negative effects on human health associated with waste generation

Risks addressed:

• Failure to meet sustainability goals due to failure to reduce and manage waste generated by delivery methods
• Failure to meet sustainability goals due to the inability to implement solutions that reduce and manage the volume of waste generated by product packaging
• Legal proceedings (fines, litigation) for improper waste management practices by subcontractors

Opportunities: New business opportunities associated with the reuse and recycling of waste to convert it into new resources

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ACTION 8: Incorporation of secondary raw materials into products through packaging

Key actions:

• ADEO has a Packaging Policy that promotes the incorporation of secondary raw materials into products through packaging
• This policy prohibits the use of materials that are more difficult to recycle (PVC, EPS, etc.)

Impacts addressed:

• Positive: Promoting the circular economy through the reuse and recycling of waste generated to convert it into new resources
• Negative: Contribution to environmental pollution and negative effects on human health associated with waste generation

Risks addressed:

• Failure to meet sustainability goals due to failure to reduce and manage waste generated by delivery methods
• Failure to meet sustainability goals due to the inability to implement solutions that reduce and manage the volume of waste generated by product packaging
• Legal proceedings (fines, litigation) for improper waste management practices by subcontractors

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ACTION 9: Adequate waste management and increased control over its information and traceability

Key actions:

• Promoting better waste segregation, achieving a recovery rate of over 80%
• Promoting circular economy projects by harnessing waste to convert it, in collaboration with suppliers, into new products

Impacts addressed:

• Positive: Promoting the circular economy through the reuse and recycling of waste generated to convert it into new resources
• Negative: Contribution to environmental pollution and negative effects on human health associated with waste generation

Risks addressed:

• Failure to meet sustainability goals due to failure to reduce and manage waste generated by delivery methods
• Failure to meet sustainability goals due to the inability to implement solutions that reduce and manage the volume of waste generated by product packaging
• Legal proceedings (fines, litigation) for improper waste management practices by subcontractors

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Other circular economy initiatives mentioned:

Tool rentals and Casi Perfectos (Almost Perfect):

• Mentioned as circular economy projects being driven
• Promotion of second-life projects, such as Almost Perfect, Refurbished, or the relaunch of rentals

Refurbished solution (Second Life project):

• Working on a refurbished solution to continue recovering electrical products and guarantee their complete safety, quality, and functionality for resale
• Working on projects to increase the brand's recovery rate toward 2025

Reverse logistics pallet return project:

• Allows pallets in good condition, with up to three breakage points, to be returned to the logistics platforms
• Pallets with more than three breakage points are placed in the wooden container to be managed as waste by an authorized waste manager

Home Index project:

• Working with suppliers to improve their products
• Priority families with the greatest impact on the carbon footprint of their products have been selected, and sales volume has been taken into account
• One of the pillars analyzed is "useful life and repairability" which includes: spare parts availability, repairability potential, failure rate or return rate, availability of documentation, and manufacturer's warranty
• The average score for this pillar, for the products to which it applies, as of the end of 2024 is 71.7 out of 100

Targets:

• Aim to carry out at least two additional circular economy projects per year based on incorporating LEROY MERLIN Spain's waste into the value chain and manufacturing products that are reintegrated into the company's ecosystem
• This allows reduction of the amount of raw materials consumed, while minimizing the pressure on natural resources
• This ambition is linked to the quality of the waste separated at source and the recovery treatments, which are validated through management contracts and traceability certificates

Targets related to circular economy

Brand Recovery via Near Perfect and Reconditioned

Target metric: Monetary value of brand recovered via Near Perfect and Refurbished products

Target value: €4 million

Target year: 2024

Baseline year: 2023

Baseline value: €2 million

Scope: Products (of all types, including electrical) with some defect that can be repaired

Type: Absolute (Monetary - Absolute)

Science-based/validation: Set based on LEROY MERLIN Spain's own criteria (internal)

Intermediate milestones: No intermediate milestones have been established

Progress to date (2024): €3.5 million of brand recovered via Almost Perfect and Reconditioned

Additional context: This commitment is linked to LEROY MERLIN Spain's environmental policy, responding to the principle of promoting circular economy habits in all processes. These objectives are directly related to resource output, as the goal is to recover products and extend their useful life, with a priority on increasing their repairability rate. In cases where a product cannot be repaired, it is recycled after recovering parts that can be used as replacements. The goal of reaching €4 million in recovered funds has not been achieved, although it was a very ambitious objective and significant progress has been made compared to the baseline.

Resource outflows

Expected durability of products

Leroy Merlin Spain uses the Home Index tool to assess the environmental and social impact of products throughout their life cycle. One of the pillars analyzed is "useful life and repairability," which includes five criteria:

• Spare parts availability
• Repairability potential
• Failure rate or return rate
• Availability of documentation
• Manufacturer's warranty (commercial)

The average score for this pillar, for applicable products, as of end-2024 is 71.7 out of 100.

Based on the "manufacturer's (commercial) warranty" criterion, the minimum expected durability for a selection of best-selling products is:

Note: The data provided comes from warranty years for each product group. Therefore, the years reported represent minimum expected durability, not actual durability. It cannot be compared with industry average, as this information is not available at the local or European level.

Repairability of products

The Home Index applies repairability criteria to potentially repairable products in accordance with French legislation. Three criteria are considered: availability of documentation, availability of spare parts, and repairability potential.

As of end-2024, among products with Home Index ratings:

Recycled and recyclable material

The "Raw Materials" pillar of the Home Index includes criteria related to the recyclability of the product's main material and packaging, as well as recycled content within the product. However, as of end-2024, it was not possible to extract reliable quantitative information from these criteria. The company works daily with suppliers to promote continuous improvement and hopes to provide this information in the next report.

Circular economy services

Second Life / Almost Perfect / Refurbished:

Note: Value of Managed Products refers to total value of products dispatched for recovery within the project. Value of recovered products refers to purchase price value of checkouts generated by sale of NEARLY PERFECT and REFURBISHED products.

Home Index performance

Target 2024: 55% of sales come from products with an A, B or C rating on the Home Index
Achievement 2024: 56.9% of sales come from products with an A, B or C rating on the Home Index

More than 140,000 products are now rated with Home Index, with over 700 trained suppliers. Fifty percent of sales come from products with A, B, or C ratings.

Anticipated financial effects from resource use and circular economy-related impacts, risks and opportunities

Financial Resources Allocated

Regarding the other actions related to the circular economy, financial resources have been allocated for all actions. However, and in accordance with the significance criteria established by regulations, they are not reported in this document because they are not considered significant quantitatively, being below 0.2% of the company's turnover; nor qualitatively, because they do not represent a widespread negative or positive impact on stakeholders or the environment.

Future Resource Allocation

The allocation of resources for 2025 has not yet been planned.

Waste

Waste management approach

LEROY MERLIN Spain follows a Zero Waste approach, recovering waste within the company's reach. The company promotes source segregation and identifies all waste streams to reduce the amount sent to landfills and ensures documentary control for traceability.

Key initiatives include:

• Recycling and waste recovery through authorized managers or collective systems of extended producer responsibility (SCRAP, such as Ecoembes)
• Application and fertilization based on ecomodulation of SCRAP
• Increased waste collection points in collaboration with SCRAP (multi-container waste in 100% of stores)
• Contract requirements for waste managers to prioritize recovery treatment over disposal
• Training in waste management for employees
• Reverse logistics pallet recovery project to increase reuse and reduce wood waste
• Increased control over information and waste traceability

Target 2024: 85% waste recovery rate in stores and warehouses
Achievement 2024: 80.7% waste recovery rate

Total waste from own operations (tonnes)

Recycling/Recovery rates

Waste composition

Among waste generated by LEROY MERLIN Spain, the most notable categories are:

• Waste from wood processing and panel and furniture production
• Paper and cardboard packaging
• Plastic packaging
• Wood and metal packaging
• Construction waste
• Composite textile waste
• Electrical and electronic equipment waste
• Batteries and accumulators
• Other waste with hazardous components

Main materials identified: wood, paper pulp, plastic, metal, glass, and construction materials such as ceramics.

The most significant waste stream is waste derived from wood processing and panel and furniture production, which, including wooden packaging such as pallets, has accounted for around half of the waste managed in the last two fiscal years. Waste wood is separated in stores and managed by authorized waste processors. Pallets are managed using the reverse logistics model.

Data methodology

Waste data is calculated through direct weight measurements during collection and waste treatment at recycling plants, using weighing tickets and treatment categories from waste manager plants. Estimates are primarily made for December 2024 for all types of waste, based on historical waste generated by stores in previous months.

Circular economy projects

The company collaborates with suppliers to reuse certain waste, transforming it into new products:

• Circlewood Project with FINSA: transforms wood waste from Galicia centers into new products like chipboard, decorative panels, kitchen furniture, and shoe racks
• KETER Project (pilot 2024): plastic waste from two Zaragoza stores converted into dog kennel floors

Policies related to own workforce

Leroy Merlin España has established several policies covering its own workforce. These policies apply to all salaried employees of the company.

Code of Ethics

Policy name: Code of Ethics (Código de Ética)

Key content and principles: The Code defines the values and principles of the company's ethical and business culture, seeking to consolidate honest, ethical, and responsible conduct. LEROY MERLIN Spain's ethical values are exemplary leadership, commitment to the company, integrity, transparency, professionalism, and social responsibility.

The Code establishes guidelines for compliance with the law, addressing conflicts of interest, and teamwork. It emphasizes the protection of human rights, respect for persons, the prevention of harassment, meritocracy, equal opportunities, and occupational health and safety. Regarding non-discrimination, the Code provides for non-discrimination based on racial and ethnic origin, color, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national origin, or social origin.

It also promotes responsible customer relations, the rejection of corruption and fraud, excellence, quality, responsible advertising, and financial and accounting transparency. Finally, it addresses environmental protection, the responsible use of resources, data protection, and the use of technological assets.

Scope: All members of the board of directors, executives, and professionals of LEROY MERLIN Spain. The company also promotes the adoption of similar principles among its business partners.

Approval and oversight: Approved by the Board of Directors. Reviews are conducted by the Ethics and Compliance Committee and submitted to the Board of Directors for approval. Any modifications related to Sapin II, revisions to the Code of Ethics, or the risk management model are discussed and approved by the Steering Committee (CODIR), composed of the Executive Leadership Team and the immediately superior line of management. The Ethics and Compliance Committee is the body responsible for interpreting and ensuring compliance with the Code of Ethics, as well as promoting its training and dissemination.

Responsible official: The financial director of LEROY MERLIN Spain is the highest-ranking official responsible for ensuring its implementation.

Link to international standards: Aligned with recognized international standards such as the Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights, the Declaration of Fundamental Principles and Rights at Work, and the conventions of the International Labour Organization (ILO). Aligned with the achievement of the Sustainable Development Goals (SDGs), specifically Goal 8 (Decent Work and Economic Growth). However, it does not include an explicit reference to human trafficking, forced labor, and child labor, although it expresses its respect for the Human Rights recognized in the Universal Declaration of Human Rights.

Public availability: Available on the company's corporate website.

Stakeholder involvement: Stakeholders were not directly involved in the design of the Code of Ethics, but their interests were taken into account to protect their essential rights.

Monitoring: The Ethics and Compliance Committee has various internal support figures, such as the Anti-Corruption Representative and the Anti-Discrimination Representative, for daily performance of its functions.

LEROY MERLIN Spain's Health, Well-being, and Prevention Policy

Policy name: LEROY MERLIN Spain's Health, Well-being, and Prevention Policy (Política de salud, bienestar y prevención de LEROY MERLIN España)

Key content and principles: Focuses on the health and well-being of the company's employees, with the primary objective of ensuring the health and safety of employees by providing safe and healthy working conditions. The policy relates to employee health and safety, occupational risk prevention, and compliance with prevention legislation.

Scope: All LEROY MERLIN Spain employees.

Approval and oversight: Approved by General Management. The monitoring and proper implementation of the occupational risk prevention management system must be guaranteed by the regional management teams and each of the company's work centers.

Responsible official: The Executive Director of People is responsible for implementing the policy. The Wellness Plan and its strategy are reported and presented as part of the overall People Strategy and, specifically, of the Employee Experience Department.

Link to international standards: Aligned with international standards and regulations on occupational health and safety.

Public availability: Not specified.

Monitoring: Since 2021, LEROY MERLIN Spain's risk prevention management system has been externally certified according to ISO 45001 and is audited annually. In 2024, ADEO also conducted an internal audit of the system, with an overall result of "Very Good."

Diversity, Equity and Inclusion Policy

Policy name: Diversity, Equity and Inclusion Policy (Política de Diversidad, Equidad e Inclusión)

Key content and principles: LEROY MERLÍN Spain is committed to diversity, equity, and inclusion in all aspects of its organization. The policy seeks to create a culture where every person is valued, respected, and afforded equal opportunities, regardless of their racial or ethnic origin, color, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national ancestry, or social origin.

The policy relates to talent management, employee attraction and retention, equality and inclusion of LGBTI and disability groups, and employee satisfaction and productivity.

Scope: Applies to all aspects of the relationship between LEROY MERLÍN Spain and its employees, as well as to relationships between employees themselves. This includes job advertisements, recruitment, selection, training, development, promotion, working conditions, compensation, benefits, workplace conduct, disciplinary procedures, dismissals, and post-dismissal situations. The policy extends to the entire value chain, including partners, agency staff, contractors, volunteers, and other employees.

Approval and oversight: The Department of People and the Office of Diversity and Inclusion oversee compliance with the policy, which is reviewed and updated regularly.

Responsible official: The Office of Diversity and Inclusion and the Diversity, Equity, and Inclusion Officer are responsible for developing, promoting, and executing the strategy and policy. The Director of People is also responsible for implementing the policy.

Link to international standards: Aligned with the LEROY MERLIN Spain Code of Conduct, the principles of the United Nations Universal Declaration of Human Rights, the Fundamental Conventions and Recommendations of the International Labour Organization (ILO), the Charter of Fundamental Rights of the European Union, and the achievement of SDGs 5 (Gender Equality) and 8 (Decent Work and Economic Growth).

Public availability: Available on the company's corporate intranet.

Stakeholder involvement: Stakeholders were not directly involved in the design of this policy. However, the policy seeks to protect the interests of LEROY MERLÍN Spain's current and future employees.

Protocol for the prevention and treatment of situations of moral and sexual harassment

Policy name: Protocol for the prevention and treatment of situations of moral and sexual harassment (Protocolo para la prevención y tratamiento de situaciones de acoso moral y sexual)

Key content and principles: Aims to comply with Article 48 of the Organic Law on Effective Equality between Women and Men (LO 3/2007), establishing a procedure for the prevention and treatment of situations of moral, sexual, and gender-based harassment in the workplace.

The protocol establishes preventive measures such as dissemination of the protocol, training for managers, counseling, and assistance in cases of harassment. It also establishes a procedure for action that includes filing a request for intervention in cases of harassment, establishing a Committee for the Handling of Harassment Situations (CITSA), investigating the incidents, adopting corrective measures, and imposing sanctions in cases of harassment.

Scope: Applies to all LEROY MERLIN Spain work centers.

Approval and oversight: For each request for intervention in harassment, a Harassment Situation Investigation Committee (CITSA) will be established as the body responsible for handling the process. The Committee is formed by an odd number of people from outside the workplace where the alleged harassed person and the harasser work, including: Regional Human Resources assigned to another region, Head of the LEROY MERLIN Spain Prevention Service, Director of HR Management, and a doctor assigned to the Health Surveillance Service with training in the subject.

Link to international standards: Aligned with the fundamental rights enshrined in the Spanish Constitution, the Workers' Statute, and the Equality Act (LO 3/2007). Linked to the achievement of Sustainable Development Goals (SDGs) 16 (Peace, Justice, and Strong Institutions) and 8 (Decent Work and Economic Growth).

Public availability: Available on the company's corporate intranet.

Stakeholder involvement: Stakeholders were not directly involved in the design of the protocol. However, it seeks to protect the interests of employees by ensuring their dignity, integrity, and equal opportunities at work.

Monitoring: The Intercenter Committee is informed semiannually about the number of open cases and their outcome, in order to assess the effectiveness of this procedure.

Corporate Policy and Procedure for Internal Information Systems

Policy name: Corporate Policy and Procedure for Internal Information Systems (Política Corporativa y Procedimiento de Gestión del Sistema de Información Interna)

Key content and principles: Covers everything related to channels for reporting concerns, scope, and requirements, and incorporates an anti-retaliation protocol.

Scope: All employees.

Link to international standards: Part of the governance structure that adheres to the United Nations Guiding Principles on Business and Human Rights.

Public availability: Information available on the intranet.

Additional policy commitments

In relation to respect for the human rights of own staff, the Code of Ethics serves as a global framework agreement aligned with recognized international standards. The Code establishes commitments including:

• Maximum respect for observance and compliance with current legislation and internal rules governing professional conduct
• The company's moral obligation to promote the well-being of its employees, third parties, and society as a whole
• Promoting respect for human rights enshrined in the United Nations Universal Declaration of Human Rights

Impact management mechanisms: To address human rights impacts, the company has:

• An ethics channel (Whispli)
• An Ethics Committee that manages any communication received through this channel
• A Harassment Handling Instruction Committee (CITSA)
• Three key representatives: a person responsible for equality, anti-discrimination, and a leader of diversity and inclusion

Taking action on material impacts on own workforce

Leroy Merlin España determines necessary actions through: biennial risk matrix updates, materiality study updates, Code of Ethics monitoring, regular employee eNPS monitoring, and Ethics Committee functioning across Anti-corruption, Anti-discrimination, Anti-fraud, Data Protection, Cybersecurity and Health, and Diversity and Inclusion.

Effectiveness is evaluated through Pulso EXI surveys measuring employee satisfaction. In 2024, no negative impacts from energy transition were detected. The "Positive Ambassadors" program was launched in stores, with training on sustainability topics including Home Index project and waste management.

Material Topic: Quality Employment

Action 10: Promoting listening to employees and monitoring their commitment and satisfaction

• Addresses: Positive impacts (job satisfaction, working conditions), risks (talent attraction/retention), opportunities (work environment, engagement)
• Linked to eNPS >60 target (achieved 68 in 2024)
• Linked to turnover <15% target (achieved 18.1% in 2024)

Action 11: Analysis of the collaborator's life cycle, updating of onboarding processes and consolidation of offboarding processes

• Addresses: Positive impacts (job satisfaction, working conditions), risks (talent attraction/retention), opportunities (work environment, talent attraction)

Action 12/13: Creation and qualification of the Talent Acquisition Specialist team

• Addresses: Positive impacts (working conditions), risks (talent attraction/retention), opportunities (talent attraction capability)

Action 13/14: Programs to promote professional growth and monitoring of employee performance

• Addresses: Positive impacts (professional growth opportunities), risks (talent retention), opportunities (productivity, engagement)

Action 14: Distribution of economic benefits among collaborators

• Addresses: Opportunities (employee engagement policies, employee shareholders)

Material Topic: Equality, Diversity and Inclusion

2nd LEROY MERLIN Spain Equal Opportunities and Treatment Plan (2022)

• 108 measures across 11 action blocks: Head of Equality, Selection and hiring, Professional classification, Promotion, Training, Awareness and communication, Conciliation and co-responsibility, Occupational health, Gender violence, Sexual and sexual harassment, Remuneration
• Monitored by Equality Plan Monitoring Committee
• Negotiated with unions (FETICO, CCOO, UGT, USO)

Diversity, Equity, and Inclusion Strategic Plan 2024-2027

• Aims to foster diverse and inclusive environment led by trained managers

Action 15: Training and awareness-raising on diversity, equity and inclusion for employees

• Scope: All employees across entire company
• Key actions:
  • Two specific training sessions for all employees
  • Cultural evolution and DEI approach to stores
  • Bias training for managers prior to performance evaluation
  • E-learning "New paradigm of disability"
• Aligned with DEI Strategic Plan 2024-2027
• Addresses: Positive impacts (LGBTI and disability inclusion), risks (discrimination, harassment)
• Linked to targets: Women Leaders >40% (by 2027, achieved 23.65% in 2024); People with disabilities >4% (achieved 3.28% in 2024)

Action 16: Promoting the labor inclusion of people with disabilities through the 'No less than 4%' project

• Addresses: Positive impacts (disability inclusion)
• Linked to >4% disability employment target

Action 17: Implementation of empowerment and development programs for women

• Addresses: Positive impacts (equality commitment), risks (discrimination in development/remuneration)

Action 18: Promoting the empowerment and development of the senior community through the 'Seniorly Responsible' project

• Addresses: Positive impacts, risks (discrimination)

Material Topic: Training and Capacity Building

Action 19: Promoting training actions aimed at ensuring technical, product, sales and trade knowledge, digital skills and cultural change

• Scope: All employees
• Key actions:
  • More than 4,000 salespeople trained in product development through hands-on workshops at Matapiñonera Campus
  • Promoting trade academies formalizing internal know-how
  • Digital skills training activities
  • Cultural change training aligned with business model
  • Launch of goFluent platform for language learning (12 languages available)
• Resources: Quantified outcome - 27.8 average training hours per employee in 2024
• Target: 30 hours average training per employee (baseline 28.9 in 2023)
• Training organized by mission paths and collections: Product, Sale, Job, Customer Experience, Skills, Occupational Risk Prevention, Health and well-being, Regulatory compliance, Corporate Culture, Digital transformation and data driven, Languages, Welcome to LEROY MERLIN
• Addresses: Positive impacts (training and vocational development opportunities)

Material Topic: Occupational Health and Safety

Action 20: Improving the system for recording accidents and near-misses

• Scope: All employees
• Key actions:
  • Internal recording system using TIK tool for accidents with/without sick leave and near misses
  • Detailed procedures for action, processing and investigation of accidents
  • Risk assessment reviews and corrective measures
• Aligned with Health, Well-being, and Prevention Policy
• Addresses: Negative impacts (accidents/occupational diseases), risks (legal proceedings, reputation loss)
• Linked to frequency rate <6 target (achieved 7.88 in 2024, down from 8.70 in 2023)

Action 21: Promoting training and awareness on occupational risk prevention

• Scope: All employees
• Addresses: Negative impacts, risks (accidents, legal proceedings)

Action 22: Review of the company's preventive organization and sizing of the department's personnel and resources

• Scope: All employees
• Resources: Non-financial - personnel and resources for prevention department
• Addresses: Negative impacts, risks (accidents, legal proceedings)

Material Topic: Comprehensive Team Well-being

Action 23: Promoting physical, financial, emotional, mental and social well-being among employees

• Scope: All employees
• Key actions:
  • Wellbeing Plan 3.0 (launched 2023, enhanced 2024 with strategic content aligned to ADEO Make it Positive strategy)
  • Physical well-being: Physiotherapist team across all stores, medical checkups, gym discounts through Wellhub app
  • Financial well-being: Flexible Compensation Plan, Compensation Portal (2024)
  • Emotional and mental well-being: Digital disconnection policy, Positive Minds pilot program (awareness, training, psychological/counseling sessions)
• Resources (quantified outcomes):
  • Knowledge of Wellness Plan >70% target (achieved 79.9% in 2024, from 64.7% in 2023)

  • 10,000 hours well-being training target (achieved 16,395 hours in 2024, from 7,119 in 2023)

• Aligned with Health Policy principles
• Addresses: Positive impacts (work-life balance, health and well-being), negative impacts (work-life balance deterioration, workload perception, well-being environment), risks (productivity loss from overload and poor work-life balance)
• Time horizon: Monitored monthly, reported in Q4 bonus (February) and share revaluation (March)

Cross-cutting

Sustainability training (2024)

• "Positive Ambassadors" program in stores
• Training on Home Index project and waste management
• Addresses energy transition impacts on workforce

Employee shareholder program

• Promotes "sharing culture" and employee engagement
• Monitored through employee climate surveys and eNPS

Targets related to own workforce

Target 1: Employee Net Promoter Score (eNPS)

• Target metric: Employee Net Promoter Score (eNPS)
• Target value: Over 60
• Target year: 2024
• Baseline year: Not disclosed
• Baseline value: Not disclosed
• Scope: LEROY MERLIN Spain national level
• Type: Absolute
• External validation: ADEO sets target at 50; LEROY MERLIN Spain target is over 60
• Progress to date: Target was achieved by the end of 2024
• Measurement frequency: Biannually (June and November) using EXI Pulses
• Monitoring: Monthly monitoring; employees participate in monitoring during Q4 Progress Bonus (paid in February of following year) and at share revaluation date (March of following year)

Target 2: Employee Turnover

• Target metric: Employee turnover
• Target value: Not quantified in excerpts
• Target year: 2024
• Baseline year: Not disclosed
• Baseline value: Not disclosed
• Scope: Not disclosed
• Type: Not disclosed
• External validation: Internal
• Progress to date: Target was not achieved, although the figure was a few percentage points away from target
• Monitoring: Monthly monitoring; employees participate in monitoring during Q4 Progress Bonus (paid in February of following year) and at share revaluation date (March of following year)

Target 3: Employees with Disabilities

• Target metric: Percentage of people with disabilities in workforce
• Target value: Exceeding 4%
• Target year: 2024 (and continuing into 2025)
• Baseline year: Not disclosed
• Baseline value: Not disclosed
• Scope: LEROY MERLIN Spain workforce
• Type: Absolute (percentage)
• External validation: Internal (exceeds 2% reserve quota established in General Disability Law)
• Progress to date: 3.28% achieved in 2024; target could not be achieved. Company will continue working in 2025 to achieve this goal
• Monitoring: Monthly monitoring; employees participate in monitoring during Q4 Progress Bonus (paid in February of following year) and at share revaluation date (March of following year)

Target 4: Workplace Accident Frequency Rate

• Target metric: Frequency rate of workplace accidents
• Target value: Not quantified in excerpts
• Target year: 2024
• Baseline year: Not disclosed
• Baseline value: Not disclosed
• Scope: Not disclosed
• Type: Not disclosed
• External validation: Internal; LEROY MERLIN Spain's frequency rate is below ADEO and industry averages
• Progress to date: Target has not been achieved. Frequency rate was reduced by approximately 1 percentage point compared to previous year
• Monitoring: Monthly monitoring; employees participate in monitoring during Q4 Progress Bonus (paid in February of following year) and at share revaluation date (March of following year)

Additional Information

Strategic Framework: Targets are established based on 3-year Strategic Plan with five pillars: Leadership, Culture, Employee Experience, Attraction and Acquisition, Training and Development, and Transformation.

Stakeholder Engagement: Employees and workforce representatives are generally not involved in goal-setting process. However, all employees are aware of strategic objectives (OKRs) and participate in quarterly meetings for progress bonus communication and annual profit-sharing meetings.

External Validation: As a general rule, metrics have not been validated by external body other than the auditor of the report, unless specified for a specific metric.

Characteristics of the undertaking's employees

Total headcount and composition

Employee figures are reported as an average over the reference period. The number of employees at the beginning and end of each month are calculated and averaged over 12 months. The 2023 figures have been restated using this same criterion to ensure comparability.

Total headcount by gender

Headcount by employment contract type and gender

Headcount by employment type (full-time / part-time)

Employee turnover

Methodology note: The turnover rate is calculated following the methodology established by Commission Delegated Regulation (EU) 2023/2772. All employees who have left the company for the following reasons are counted: voluntary departure from employment (voluntary redundancy), transfer to another BU in the Group other than LMES (equivalent to voluntary redundancy), dismissal, retirement, or death in service. There were 0 people in 2023 and 2024 who caused abandonment due to death in service.

Full-time equivalent (FTE) from financial statements

Note: This information is provided in note 18.1 Personnel structure of the 2024 financial statements of Leroy Merlin Spain.

Additional breakdown at year-end (Law 11/2018)

The following data is reported at year-end (31/12) for 2024:

Headcount by gender (at year-end)

Headcount by age (at year-end)

Headcount by professional category (at year-end)

Headcount by type of contract (at year-end)

Headcount by type of workday (at year-end)

New hires

Data on new hires is not explicitly disclosed in the S1-6 characteristics section, though hiring processes and talent acquisition are mentioned in action plans.

Headcount by country or region

The scope of the report is Leroy Merlin SLU (Spain). No breakdown by specific regions within Spain is provided in the S1-6 disclosure.

Characteristics of non-employees in the undertaking's own workforce

Non-employee workers in own workforce

Leroy Merlin España has non-salaried workers within the workforce on specific occasions:

• Personnel provided by third-party companies primarily engaged in employment-related activities (in the case of replacements for internal employees or external support related to consulting).
• Self-employed workers (in the case of installers, which LEROY MERLIN España considers service providers).

Impacts affecting non-salaried workers

The following impacts have been identified as affecting non-salaried workers in the own workforce:

Impact: Deterioration of the health and safety of employees due to the occurrence of accidents and/or occupational diseases

• Own staff affected: Salaried and Non-salaried

Methodology notes

The disclosure identifies the types of non-employee workers (agency/temporary workers and self-employed installers) but does not provide headcount figures, FTE counts, or breakdowns by type, gender, or region. The company notes these workers are present "on specific occasions" for specific purposes (replacements, consulting support, installation services).

Collective bargaining coverage and social dialogue

Organizational approach

At LEROY MERLIN Spain, labor relations are managed through the National Association of Large Distribution Companies (ANGED), which includes the Department Stores' Association and the Inter-Center Committee at the company level. Through this association, the company participates in defining the strategic lines of the agreement, in its negotiation with the workers' legal representatives, and in its signing.

Workers elect their representatives in their workplaces, who are staff representatives in smaller centers and Works Councils in larger centers. By 2024, there will be 873 union representatives representing all workers.

Meetings are held with the legal representatives of the employees. If the issue to be discussed affects only one workplace, it is discussed in meetings with staff representatives and/or the Works Council. If the issue affects more than one workplace, the forum is the Inter-Center Committee, a body regulated by Article 66 of the Department Stores Collective Agreement and made up of 13 members.

Typically, the consultation and participation process takes place during meetings between the company and employee representatives, which are held quarterly in stores and within the Inter-site Committee. Extraordinary meetings may also be held to discuss specific cases.

Coverage metrics

100% of salaried staff are covered by a collective agreement in both 2024 and 2023, and there is both a Works Council and a European Works Council.

*At LEROY MERLIN Spain, all employees are covered by legal representation, with the exception of employees whose workplace is headquarters/internal services.

Coverage by country and region

Diversity metrics

Gender distribution in senior management (CODIR)

Senior management refers to the National Steering Committee (Executive Leader Team and management profiles in regions and strategic areas).

Executive Leader Team (Board-level)

Gender distribution

Age distribution

Board of Directors

Gender distribution

Age distribution

Age distribution of total workforce

Methodology note: Employee figures are reported as an average over the reference period. The number of employees at the beginning and end of each month is calculated; an average of these two figures is taken over 12 months. The final figure is the sum of the 12 figures divided by 12. The 2023 figures have been restated using the same criteria to ensure comparability.

Women in leadership positions

Definition: The target percentage of female leaders is defined by taking into account the number of women in management positions in the company, key retail positions traditionally held by men, out of the total number of members in management positions. These positions are: Supply Manager, Global Supply Leader, Marketplace Leader, E-Commerce Director, Global and Markets Leader, and Steering Committee (CODIR).

People with disabilities

Methodology note: The percentage of people with disabilities is calculated according to the technical criteria requested by the Labor Inspectorate of the Ministry of Employment and Social Security, which requires specific rules for performing the calculations.

Adequate wages

Disclosure statement

All employees receive an adequate salary, in accordance with applicable benchmarks.

Compensation and benefits strategy

LEROY MERLIN Spain's compensation and benefits strategy seeks to develop a differentiating and competitive value proposition to attract and retain talent. The main measures and initiatives launched in 2024 in relation to this strategy are as follows:

• Flexible compensation plan for all employees and new XserLeroy compensation portal.
• Tools to contribute to financial well-being: advance management, health insurance, training, etc.
• Variable compensation policies for new groups.
• Plan to adapt fixed salaries to the new reality of rising consumer goods prices.
• Evolution of the merit-based salary increase system.
• Creation of a remuneration structure for key groups.

Benchmark used

No specific living wage benchmark is disclosed. The company states employees receive "an adequate salary, in accordance with applicable benchmarks" but does not specify which benchmarks are used (e.g., living wage methodology, Fair Wage Network, minimum wage, or collective bargaining agreements).

Coverage

The statement indicates "all employees" receive adequate wages, but no percentage coverage against a specific living wage benchmark is provided.

Methodology

No methodology for determining adequate wages is disclosed. The company does not specify how adequacy is assessed, what calculation methods are used, or frequency of reassessment.

Geographic scope

Spain (implied by company name Leroy Merlin España, but not explicitly stated in the adequate wages disclosure).

Targets and commitments

No forward-looking targets or commitments related to adequate wages or living wages are disclosed.

Social protection

All LEROY MERLIN Spain employees are covered by social security, in accordance with current Spanish legislation, against loss of income due to the following events: illness, unemployment, work-related accidents and acquired disability, paternity/maternity leave (parental leave), and retirement.

Coverage

• Coverage rate: 100% of employees
• Geographic scope: Spain
• Type of scheme: Public social security (Spanish legislation)
• Events covered:
  • Illness
  • Unemployment
  • Work-related accidents
  • Acquired disability
  • Paternity/maternity leave (parental leave)
  • Retirement

Exclusions

Under no circumstances is an employee without social security coverage for these life events.

Persons with disabilities

Overall percentage

Leroy Merlin España reports 3.28% of employees with disabilities in the workforce (2024).

Multi-year comparison

Breakdown by gender

Methodology and scope

The percentage of people with disabilities is calculated according to the technical criteria requested by the Labor Inspectorate of the Ministry of Employment and Social Security, which requires specific rules for performing the calculations:

• The reference period for the calculation is the immediately preceding 12 months, during which the average number of employees, including those hired part-time, is obtained across all the company's work centers
• All employees who have been employed by the company with a permanent contract are counted. Each permanent employee counts as one in each month in which they were employed
• Workers linked by fixed-term contracts of more than one year are counted as permanent employees
• Workers hired for a term of up to one year are counted according to the number of days worked in the reference period: every 200 days worked or fraction thereof are counted as one more worker

The perimeter of employees used to calculate the indicator is "employees with an employment relationship with LEROY MERLIN Spain." The 2023 data has been restated using this same criterion to ensure comparability.

Training and skills development metrics

Training Hours

Overall and by Gender:

*The average number of training hours is calculated using the following formula: total training hours completed by employees during the reference period, divided by the average number of employees during the reference period. The 2023 data have been restated to apply the same criteria and promote comparability.

By Employee Category:

Performance and Career Development Review Coverage

Participation by Gender (out of total employees):

Participation by Gender (out of employees required to complete evaluation - more than 6 months tenure):

Note: Performance evaluations are only required for employees who have been with the company for more than six months at the time the evaluation is initiated.

Training Goal

Methodology: In 2024, the theoretical duration of each course was counted as the hours completed, to ensure accurate accounting. The data from the previous reference period has been restated using this same criterion to ensure comparability.

Health and safety metrics

Coverage of health and safety management system

All employees of LEROY MERLIN Spain are covered by the company's health and safety management system. Since 2021, the risk prevention management system has been externally certified according to ISO 45001 and is audited annually.

Fatalities

Recordable work-related accidents and injury rates

The incidence rate by gender is 10.87 for men and 6.33 for women in 2023; and 8.91 for men and 6.77 for women in 2024.

Recordable work-related ill health

The breakdown by gender is: 3 cases of women and 1 case of men in 2023; 1 case of women in 2024.

Days lost and severity rate

The severity index is calculated as: (Number of days lost due to work-related injuries and deaths as a result of work-related accidents / hours worked) × 1,000.

Gender data for the severity rate in 2024: 0.29 for men and 0.26 for women. Gender data for 2023 are not available.

Training in occupational risk prevention

Data calculated with 2024 employee perimeter. Any training course included in the "PRL collection" is included.

Work-life balance metrics

Family-related leave entitlement and uptake

Entitlement: 100% of the company's employees are entitled to family leave through social policy or collective bargaining agreements.

Uptake by gender (2023-2024):

Work-life balance measures

The Second Equality Plan includes more than 20 specific measures to promote work-life balance, including:

• Ensure that people who benefit from any of the rights related to work-life balance (leave, reduced working hours, etc.) do not see their career development or promotion opportunities hindered
• Conduct information and awareness-raising campaigns specifically targeting men on shared responsibility and balanced distribution of tasks
• Establish that individuals on suspension of employment due to the birth or care of a minor may participate in training courses and promotion processes
• Use new information technologies, whenever possible, to avoid constant travel or displacement

Return-to-work rates

Not disclosed.

Scope note

The percentages of employees who took family leave are calculated over the total number of employees, not over the number entitled. All coverage applies to salaried employees of LEROY MERLIN Spain.

Compensation metrics

Pay gap

The calculation of remuneration in LMES includes the following items, received in the reference period:

• Monetary salary, which includes both gross salary and variable remuneration, if any
• Salary in kind, if any
• Salary received in the form of shares, generated through progress bonuses and the profit-sharing rate

The information on the gender pay gap in the last year, taking into account this remuneration, is as follows:

Historical comparison:

*In 2024, and following the criteria of the reporting regulations, the gap is calculated based on the average gross remuneration per hour worked, including salary items in cash, in-kind, and in shares. In 2022 and 2023, the wage gap was calculated based on annual remuneration, including only gross and variable salary in those groups where it was available. Therefore, the figures may not be directly comparable with 2024. In any case, no significant differences were observed between the years.

Remuneration ratio

The ratio of the highest-paid individual's total annual compensation to the median total annual compensation of all employees (excluding the highest-paid individual) for 2024 is nineteen. This calculation takes into account total compensation: cash, variable, and stock. The total annual compensation of each employee has been consolidated by adding the normalized gross annual total and the actual variable items received.

Methodology

The gender pay gap is calculated as an unadjusted headline figure based on average gross hourly remuneration. The methodology changed in 2024 to align with reporting regulations, expanding scope from annual gross and variable salary (2022-2023) to include hourly wages plus in-kind and share-based compensation (2024). The remuneration ratio calculation consolidates all compensation forms (cash, variable, and stock) on an annual basis.

Incidents, complaints and severe human rights impacts

Communications received related to discrimination

Information regarding communications received related to discrimination is managed anonymously and confidentially by the Anti-Discrimination Officer, who is part of the Ethics Committee.

Note: The number of communications received includes communications received through the ethics channel (Whispli) and through the Commission for the Treatment of Harassment Situations (CITSA), and both itemized and consolidated data are provided for these two communication reception channels.

Note: The total number of communications or incidents received from non-salaried employees during 2023 and 2024 was 0.

Confirmed incidents of discrimination

Note: The discrimination incident count includes incidents received and confirmed based on the communications received and reported in the table above, through both channels and on a consolidated basis.

Discrimination incident management

Note: Details are reported on both incidents of discrimination received and confirmed, as well as those that have been ruled out after analysis. As of the closing date of this report, no cases are under analysis.

Complaints submitted through channels

Note: Complaints are considered to be all those received through the following channels: Ethics Channel (Whispli), the Commission for the Treatment of Harassment Situations (CITSA), and regular meetings of the Inter-Center Committee and the Company. Data is provided both broken down by channel and consolidated.

Fines, sanctions and compensation

At the end of 2024, a total of (3) compensation agreements have been processed as a result of legal cases, none of them serious, related to work-related accidents. The total amount of these compensation agreements is €45,000. These amounts are recorded in the financial statements as provisions in the Profit and Loss Account.

Severe human rights impacts

At the close of 2023 and 2024, no serious human rights incidents or problems related to our own employees were identified, nor were there any cases of non-compliance with the United Nations Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Business. To reach this understanding, a thorough review of the cases confirmed throughout the year was conducted and it was found that these were isolated cases and none could be considered serious.

Similarly, no fines, sanctions, or damages were recorded for serious human rights incidents, and therefore, there were no incidents considered serious in which the company had to play a role to ensure redress for those affected.

Concerns received through employee survey

Note: The EXI (Employee Experience Index) survey, which was sent to employees twice a year in 2024, includes an open-ended question where employees can share concerns about their day-to-day work. These concerns are not formal complaints, but are recorded and reviewed as part of the employee listening process.

Policies related to value chain workers

Leroy Merlin España's ethics and human rights policy commitments for workers in the value chain are based on two supplier codes of conduct. These codes address human trafficking, forced labor, and child labor.

Responsible Purchasing Suppliers Code of Conduct (Goods)

Policy content:

The code establishes principles governing the relationship between Leroy Merlin España and its merchandise suppliers, seeking ethical and responsible conduct in the supply chain.

Key commitments include:

• Protection of working conditions and human rights throughout the value chain
• Zero tolerance for physical, psychological, or moral harassment, abuse of authority, or intimidating or offensive behavior against people's rights
• Protection of health of employees throughout the value chain and accident prevention
• Prohibition of child labor in accordance with the strictest standard between local legislation and ILO Convention 138 (minimum age 15 years)
• Prohibition of dangerous and night work for persons under 18 years
• Abolition of forced labor and trafficking through prohibition of slavery, bonded labor, debt bondage, or other forms of involuntary labor without remuneration
• Prohibition of prison labor

Scope:

Applies to all suppliers who provide commercial goods or services to Leroy Merlin España.

Governance and oversight:

The Chief Financial Officer is the highest position responsible for implementing the policy.

Alignment with international standards:

The code is aligned with:

• Universal Declaration of Human Rights
• Principles of the Global Compact
• Sustainable Development Goals (SDGs), especially SDG 8 (Decent Work and Economic Growth)
• ILO Convention 138
• Leroy Merlin España Code of Ethics

Stakeholder involvement:

Stakeholders were not directly involved in the design of this policy; however, it was established taking into account the interests and needs of main stakeholders, especially employees in the value chain.

Public availability:

Available on the Leroy Merlin España corporate website.

Monitoring and implementation:

• Leroy Merlin España promotes ethics and compliance among suppliers through adherence to the code, communication, and training
• Suppliers must formally commit to compliance with the code and communicate it to their employees
• The company may conduct audits, either internally through the Quality Department or through independent third parties, at any supplier's or related facilities
• Suppliers must provide necessary information for audits
• Ethics channel (Whispli) available to receive and manage any impacts related to human rights
• The Quality Department conducts social audits of suppliers

Code of Conduct for Indirect Purchasing Suppliers

Policy content:

The code reflects ADEO's strategy based on respect for and promotion of fundamental principles regarding human rights and working conditions. It addresses the same human rights issues as the Responsible Purchasing Suppliers Code of Conduct.

Key commitments include:

• Prohibition of child labor and hazardous work
• Abolition of forced labor and human trafficking
• Freedom of association and collective bargaining
• Employee remuneration and working hours in accordance with ILO conventions

Scope:

Applies to indirect purchasing suppliers.

Public availability:

Available on the Leroy Merlin España corporate website.

Responsible Purchasing Policy for Wood Products

The company mentions having a Responsible Wood Purchasing Policy that seeks to ensure environmental and social sustainability in the acquisition of wood products, guaranteeing legality. However, detailed information about this policy's social aspects was not fully provided in the excerpts.

Compliance and implementation approach

Human rights focus for value chain workers:

The company's approach to respecting human rights relevant to workers in the value chain, especially those supplying goods, focuses on:

• Prohibition of child labor and hazardous work
• Abolition of forced labor and human trafficking
• Freedom of association and collective bargaining
• Employee remuneration and working hours in accordance with ILO conventions

Global Framework Agreement:

Respect for workers' human rights is included in supplier codes of conduct.

Monitoring processes:

• Social audits conducted by the Quality Department
• Ethics channel (Whispli) publicly accessible to any stakeholder, including value chain workers
• Self-assessments to evaluate suppliers' quality, social, and environmental management systems
• On-site audits at factories for private-label products by accredited external companies based on ICS standard
• Effectiveness of interaction with employer companies assessed through social audits, self-assessments, and direct periodic contact with supplier managers

Compliance record:

No serious human rights violations related to the value chain were detected in audits conducted in 2023 or 2024. Only one notification received regarding occupational safety (unsafe machinery and equipment). The company considers there have been no cases of non-compliance with the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational Enterprises involving workers in the value chain.

Taking action on material impacts on value chain workers

Commitment and targets (MDR-T)

Actions addressing responsible value chain

The company ensures that its own practices do not cause or contribute to material negative impacts on workers in the value chain. The company dedicates human and financial resources to adequately manage both positive and negative impacts.

Action 24: Conducting social and environmental audits on merchandise suppliers

• Addresses: Contribution to the protection of working conditions and human rights in the value chain; Legal proceedings (fines, litigation) associated with cases of moral or physical harassment
• Scope: Value chain workers (suppliers and manufacturers)
• Description: Social, quality, and environmental audits (for high industrial impact suppliers) assess supplier business units. Includes self-assessments and on-site audits. After due diligence, corrective measures and action plans are formulated describing nonconformities. Suppliers establish deadlines and provide evidence of implementation. Final follow-up audits conducted on-site.

Action 25: Updating the risk matrices and the double materiality study and monitoring of said risks

• Addresses: Contribution to the protection of working conditions and human rights; Legal proceedings associated with harassment
• Scope: Value chain

Action 26: Monitoring the signing of codes of conduct by suppliers and potential breaches received through the ethics channel

• Addresses: Contribution to the protection of working conditions and human rights; Legal proceedings associated with harassment
• Scope: Value chain suppliers
• Description: Monitoring compliance with codes of conduct and tracking breaches reported through ethics channel. Ethics and Compliance Committee follows up on complaints with maximum confidentiality and timely response.

Action 27: Provision of training courses for suppliers

• Addresses: Contribution to the protection of working conditions and human rights; Legal proceedings associated with harassment; Strengthening positive impact on employees across the value chain
• Scope: Suppliers
• Description: Supplier training programs to strengthen positive impact on employees across the LEROY MERLIN Spain value chain, promote more sustainable and safe production practices, and ensure legal risk management for regulatory compliance throughout the supply chain.
• Expected outcomes: Strengthening positive impact on employees across the value chain, customers and planet through sustainable and safe production practices; proactive legal risk management; strengthened stakeholder trust

Action 28: Accreditation of external workers through the Dokify tool to ensure compliance with occupational safety standards

• Addresses: Accidents and/or illnesses among suppliers as a result of their work for the company; Legal proceedings associated with harassment
• Scope: External workers, installation suppliers, value chain workers performing work for the company
• Description: Dokify tool widely used at company facilities, especially in stores. Ensures through document control that companies accessing facilities comply with basic occupational risk prevention regulations. For installation services, construction projects, or comprehensive renovations, includes technical assistance protocol for occupational risk prevention in processes with special risks.

Action 29: Strengthening the product self-control process

• Addresses: Accidents and/or illnesses among suppliers
• Scope: Product safety and quality

Performance monitoring and remediation (P.33)

The company closely monitors cases that occur to identify necessary action in response to material negative impacts on value chain workers. Approach determined depending on accident and/or illness. No serious impacts of this type occurred at end of 2024 or 2023. Procedures periodically reviewed to ensure correct implementation.

No serious human rights violations related to the value chain were detected in audits conducted in 2023 or 2024. Only one notification received regarding occupational safety (unsafe machinery and equipment).

Performance indicators

Manufacturing suppliers that supply own brand:

Suppliers and manufacturers that supply high-impact environmental own brand:

Percentage of sales figure from evaluated suppliers: 89% (2023 and 2024)

Statement on mitigation of material risks (P.34)

The company does not have actions in place to mitigate material risks arising from the impacts and dependencies of workers in the value chain.

Targets related to value chain workers

The document references that S2-5 targets are disclosed on pages 215-216 and 288-289. However, the excerpts provided do not contain the actual target details from those pages.

Information disclosed in excerpts:

Target design and governance (MDR-T metadata):

• Objectives have been set based on LEROY MERLIN Spain's own criteria (not science-based or externally validated)
• Value chain workers/stakeholders were not involved in the design of these objectives
• Value chain employees, representatives, or spokespersons are not involved in monitoring processes
• There have been no significant changes in the definition of objectives

Performance status (MDR-T 80 j):

• Both objectives of the 2024 goals have been achieved
• Objectives and benchmarks are monitored monthly
• Progress is in line with initially planned target
• No significant changes in company's performance toward achieving the target

Supplier context: The company differentiates between:

• Merchandise suppliers (products sold)
• Indirect purchasing suppliers (general products/services for operations)

Suppliers must sign relevant Codes of Conduct and comply with policies on sustainable materials, responsible wood products, packaging, hazardous substances, and safety frameworks.

Note: The specific quantified targets, target years, baseline years, and baseline values are referenced to be on pages 215-216 and 288-289 but are not included in the provided excerpts.

Policies related to affected communities

Leroy Merlin Spain's commitment to responsible management of the main impacts related to affected communities is based on the Social Action Policy.

Social Action Policy

Objective and scope: The objective of LEROY MERLIN Spain's social action policy is linked to the company's purpose: "To create environments for everyone to live better." The policy establishes two lines of action:

• Social action: Focuses on developing projects to rehabilitate spaces where minors, senior citizens, and people with disabilities or homeless people at risk of social exclusion live and spend the night.
• Environmental action: Directed toward protecting the environment and ecosystems by promoting climate change mitigation, the circular economy, and responsible consumption.

Geographic scope: LEROY MERLIN Spain's social action encompasses the entire Spanish territory. Since the local impact of each action is a priority, the projects undertaken are distributed across each of the eleven regions where the company operates.

Beneficiaries: Efforts are focused on improving or refurbishing spaces where vulnerable groups live and spend the night, with the goal of providing them with decent homes. These spaces include not only private homes, but also foster homes, orphanages, senior residences, and other related facilities. Activities will be promoted in these types of spaces by associations, NGOs, and other third-sector entities, provided that the funded activity focuses on social action and improving the quality of life of the beneficiaries, while avoiding any political or religious ties at all times.

Governance and oversight: In accordance with the Social and Environmental Donations Procedure, a procedure linked to the Social Action Policy, the Positive Impact Department is responsible for establishing and coordinating the company's social action strategy, defining the areas of work. It is also responsible for validating all LEROY MERLIN Spain donations under the Social Action Policy, which will be charged to the company's donations account. This account is managed exclusively by the Positive Impact team. The Accounting Department is responsible for ensuring the correct accounting of the company's donations.

Review process: A formal review process for the policy has not been proposed, but it can be reviewed at any time the social action department detects the need for it.

Public availability: The Social Action Policy can be consulted on the LEROY MERLIN Spain corporate website, in the Volunteering section.

Link to human rights: While the policy does not explicitly commit to human rights relevant to the affected groups, its content and the donations made to vulnerable groups within the framework of the policy contribute to their protection, particularly:

• Right not to be discriminated against
• Minority rights
• Protection of children from social and economic exploitation
• Right to an adequate standard of living

To address any complaint or violation of human rights, the company has a whistleblower channel (ethics channel - Whispli) available on the LEROY MERLIN Spain corporate website.

Alignment with international standards: The policy is not aligned with internationally recognized frameworks or standards, including the UN Guiding Principles on Business and Human Rights. In 2023 and 2024, no cases of non-compliance or violations of the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines were identified. No human rights-related complaints were received from affected communities.

Taking action on material impacts on affected communities

Material topic: Development of local communities

The company has identified a positive impact and opportunities related to the contribution to the development of local communities through financial and in-kind donations for spaces where vulnerable groups (minors, the elderly, the homeless, people with disabilities, or those at risk of social exclusion) live and/or spend the night. Recognition as a company committed to these activities represents an opportunity.

Actions taken

Three specific actions have been implemented to address this material opportunity:

Action 30: Promoting monetary and in-kind donations

• Scope: Local communities where stores and centers are located
• Focus areas: Homes, emergency situations, and the environment
• Expected outcome: Positive impact on the local environment and strengthened company reputation

Action 31: Transfer of store space to third sector entities for fundraising

• Scope: Stores and centers
• Partners: Third sector entities (NGOs, foundations)
• Expected outcome: Support for local projects

Action 32: Promoting corporate volunteering and expanding the range of available activities

• Scope: All volunteer activities carried out in the reported year
• Resources allocated: Employee participation
• Expected outcomes/KPIs:
  • Target 2024: 8% of the workforce will volunteer
  • Achievement 2024: 10.9% (1,846 volunteers)
  • Unit of measurement: % Percentage - Relative
  • Reference year value (2023): 1,380 volunteers, representing 8.15% of the workforce

Target linked to actions (ESRS S3-5)

Commitment: Generate a positive impact wherever we are present, both in our clients' homes and local communities

Goal 2024: 8% of the workforce will volunteer in 2024

Achievement 2024: 10.9% (1,846 volunteers)

Scope: All volunteer activities carried out in the reported year

Intermediate milestones: No intermediate milestones have been established

Approach

The company seeks to be a supportive player that creates value in local communities through various activities such as donations, volunteering, and employee awareness. The social action strategy is included in the positive impact strategy and is modulated based on engagement with sector entities (NGOs, foundations) and media.

Targets related to affected communities

Leroy Merlin España has disclosed two targets related to affected communities under ESRS S3-5:

Additional Information

Alignment: These objectives align with the company's Social Action Policy, which reflects the company's commitment to the development of local communities.

Methodology: The objectives were defined by the Social Action department of Positive Impact. See the Parameters and Goals section of the Local Community Development subchapter for the methodology for calculating the objectives.

Validation: The objectives have been set based on LEROY MERLIN Spain's own criteria (internal). Not validated by external bodies other than the auditor.

Stakeholder involvement: LEROY MERLIN Spain's stakeholders have not participated in the design of these objectives. Local communities are not involved in measuring the performance of the objectives nor have they been directly involved in identifying improvements.

Progress: Both objectives have been met in 2024. Their relevance will be assessed by 2025. The objectives are monitored monthly. Progress is in line with the initially planned target. There have been no significant changes in the company's performance toward achieving the goal and no significant changes in the definition of objectives.

Policies related to consumers and end-users

Leroy Merlin España has disclosed two main policies related to consumers and end-users under ESRS S4-1.

Code of Ethics

Key content and principles:

• Reflects LEROY MERLIN Spain's commitment to contributing to more responsible consumption and sustainable living habits, promoting awareness-raising initiatives and constructive communication
• Commitment to excellence and quality in products, which comply with legal requirements and standards for quality and customer protection
• Commitment to respecting the human rights enshrined and recognized in the United Nations Universal Declaration of Human Rights
• Establishes guiding principles for customer relationships

Scope: The Code of Ethics applies to customers and end-users. The Whispli ethics channel for addressing any human rights impact is available to clients, as it is open and accessible on the corporate website for any stakeholder.

Implementation and monitoring:

• Internal documentation and procedures to ensure the best possible response to customers, including:
  • Customer service procedures on social media
  • Call logs
  • Customer notification templates on order status
  • Procedures based on type of impact (delays, broken products, defective products, etc.)
  • Order cancellation request procedures
• Compensation scales for clients based on the type of impact (for internal use)
• Approximately 80% of client requests are handled from the front office; remainder forwarded to back office
• In 2024, all back-office processes were reviewed, applying more demanding indicators and objectives, reducing average response times by half
• Compensation model for clients who fail to meet expectations and commitments
• Quality Platform implements procedures (self-monitoring, customer feedback analysis, and product certification) for prevention and action in the event of product quality and safety impacts
• Product recall procedure communicated through physical stores and website when products are dangerous to people

Human rights linkage: At the end of 2023 and 2024, no human rights violations related to consumers and users have been reported.

Hazardous Substances Policy

Key content and principles:

• Focuses on protecting human health and the environment by restricting customer exposure to hazardous substances contained in products and packaging
• Reflects LEROY MERLIN Spain's commitment to the quality and safety of its products
• Cultivates a responsible approach to choosing safer materials to replace hazardous substances with non-hazardous ones
• Developing safe and sustainable products

Governance:

• Corporate Quality Leader promotes and approves this policy

Scope: This is an ADEO group-level policy.

Implementation: The group has developed specific Standard Operating Procedures (SOPs) for testing different products and verifying the presence of hazardous substances with different services to help stakeholders comply with ADEO's requirements.

Taking action on material impacts on consumers

Leroy Merlin España has identified several actions to address material impacts, risks, and opportunities related to consumers and end-users. These actions are structured around the company's strategic battles and linked to specific sustainability goals.

Actions addressing material impacts

Excellent customer service

• Action 33: Review and update processes with a customer-centric orientation and reduction of customer response times

  • Scope: Own operations
  • Expected outcomes: Average resolution period reduced from 19 days (2023) to 17 days (2024), with a goal of 10 days for store responses in case of non-compliance (11.76% improvement)
  • Links to: Battle 1 commitment to reduce customer friction and service contacts by 15%

• Action 34: Improving customer service channels

  • Scope: Own operations
  • Links to: Battle 1 commitment to improve omnichannel customer experience
  • Expected outcome: 360º customer NPS of 57 (3 point increase in 2024); NPS target above baseline in 2025

• Action 35: Launch of the new Leroy Merlin Club

  • Scope: Own operations
  • Expected outcomes (2024): 6% increase in lifetime value of Club customers; 3% increase in Club customers (to 12 million); 3% increase in customer consumption
  • Expected outcomes (2025): Sales figure Club Clients +5%; Private Club Clients +7%; Active PRO Club Clients +6%

Digitalization and innovation

• Action 38: Monitoring and promoting customer adoption of the new app

  • Scope: Own operations
  • Addresses: Positive impacts from new digital channels; opportunity for new business through investment in innovation

• Action 39: Promoting company growth in digital channels

  • Scope: Own operations
  • Addresses: Positive impacts from innovative digital sales channels and after-sales service; opportunities for increased operational efficiency

Quality and security of solutions

• Action 36: Introduction of artificial intelligence in customer listening to detect potential product problems

  • Scope: Own operations
  • Addresses: Risk of legal proceedings and loss of reputation due to product quality or safety impacts
  • Links to: Quality Platform procedures (self-monitoring, customer feedback analysis, product certification)

• Action 37: Improvement in the management of non-conformities

  • Scope: Own operations
  • Addresses: Risk mitigation related to product quality and safety
  • Progress: Official complaints procedure established in 2024 for faster resolution; contacts/ticket reduction target of 15%

Sustainable products and circular economy

• Home Index project

  • Scope: Own operations and downstream value chain
  • Description: Indicator for measuring environmental and social impact of products; launched in 2024 to provide customers with clear information on product impacts
  • Resources: Quality department compiled all supplier certificates supporting product claims
  • Expected outcomes (2024): 60% of sales from products with Home Index score A, B or C
  • Expected outcomes (2025): 75% of sales from products with Home Index score A, B or C
  • Links to: Battle 4 commitment to promote sustainable habitat; policy commitment to improve customer experience through availability of clear information on environmental and social impact

• Energy efficiency market promotion

  • Scope: Own operations and downstream value chain
  • Description: Lead energy renovation market by promoting solutions in 4 stages: Insulate, Air Condition, Generate and Control
  • Expected outcome (2025): Energy efficiency-related sales exceed €483 million

• Circular consumption alternatives (rental, repair, second life)

  • Scope: Own operations
  • Description: Near Perfect and Refurbished projects promoting responsible consumption
  • Expected outcomes (2024): €4 million recovered in demand; 85% waste recovery rate in stores and warehouses
  • Expected outcomes (2025): Gross Merchandise Value of circular businesses exceeds €4 million; 85% waste recovery rate maintained
  • Links to: Battle 4 commitment to promote new forms of circular consumption

• Circlewood project

  • Scope: Own operations and value chain
  • Description: Promote recycling of wood material and transformation into new products

Process improvements

Incident and non-conformity management process

• Established official complaints procedure in 2024 to resolve cases more quickly
• Quality department verification of supplier claims for Home Index scoring
• Goal: Help suppliers improve products to achieve highest Home Index scores

Product safety and recalls

• Hazardous Substances Policy implemented across all products (existing and future)
• Director of Quality responsible for implementation
• Quality Platform procedures for prevention and action
• Product recall communication through physical stores and website when products are dangerous
• Alignment with REACH Regulation

Resources allocated

No specific financial resources (capex/opex amounts) are quantified for individual S4-4 actions in the disclosure. Non-financial resources include:

• Quality department team involvement in Home Index development
• Internal communication and training for store procedures
• AI technology investment for customer listening (Action 36)
• Digital platform development for app and online channels (Actions 38, 39)

Targets related to consumers

Target 1: Global Customer NPS (Net Promoter Score)

Target metric: 360° NPS (Net Promoter Score)

Target value: 57

Target year: End of 2024

Baseline: Previous year's target was 54 (57 represents an increase of 3 points compared to the previous year's target)

Scope: All communication channels (omnichannel customer experience focusing on store, online store, in-store pickup, and more)

Type: Absolute target

Validation: Not validated by an external body other than the auditor of this report

Progress to date (2024):

• Achieved NPS: 59
• 2023 NPS: 55
• Variation: 7.27%
• Number of customer responses: 283,155 (2024) vs 187,075 (2023)

Target 2: Product Safety - Availability of Safety Data Sheets

Target metric: Percentage of product references that require it with availability of product safety data sheets

Target value: 100%

Target year: 2024

Baseline year: End of 2023

Baseline value: 94% of product references that require it have product safety data sheets available

Scope: All products marketed by the company that require a safety data sheet

Type: Relative (percentage-based)

Validation: Not validated by an external body other than the auditor of this report

Intermediate milestones: No intermediate milestones have been established

Progress to date (2024):

• Achievement: 91% of product references that require it have availability of product safety data sheets
• Total products with safety data sheets: 6,968
• Total products that should require a safety data sheet: 7,657

Target 3: Club Customer Loyalty

Target metric: Number of Club customers and their spending

Target: Boost customer loyalty and associated spending

Note: Specific quantified targets for Club customers are not disclosed, though performance metrics are tracked:

• 2024: 5.9 million Club customers (9.8% increase from 5.3 million in 2023)
• 2024: €3.12 billion Club customer consumption (7.4% increase from €2.88 billion in 2023)

Business conduct policies and corporate culture

Leroy Merlin España's framework for managing impacts, risks, and opportunities related to business conduct and corporate culture is based on several policies, approved and overseen by the Board of Directors and the Ethics Committee.

Code of Ethics

Policy name: Code of Ethics (Código de Ética)

Scope: All members of the Board of Directors, executives, and professionals of Leroy Merlin Spain. The company also promotes the adoption of similar principles among its business partners.

Approval and oversight: Approved by the Board of Directors. Reviews, along with those of the policies, processes, and controls that support it, are conducted by the Ethics and Compliance Committee and submitted to the Board of Directors for approval. The Ethics Committee, chaired by the Director of Ethics and Compliance, oversees business conduct. A compliance function report is shared annually with the Board of Directors, summarizing all actions related to the company's compliance programs. The highest-ranking official responsible for ensuring its implementation is the Financial Director of Leroy Merlin Spain.

Key content: The Code defines the values and principles of the company's ethical and business culture: exemplary leadership, commitment to the company, integrity, transparency, professionalism, and social responsibility. It establishes guidelines for compliance with the law, addressing conflicts of interest, and teamwork. It emphasizes the protection of human rights, respect for persons, prevention of harassment, meritocracy, equal opportunities, and occupational health and safety. It provides for non-discrimination based on racial and ethnic origin, color, sex, sexual orientation, gender identity, disability, age, religion, political opinion, national origin, or social origin. It also promotes responsible customer relations, rejection of corruption and fraud, excellence, quality, responsible advertising, financial and accounting transparency, environmental protection, responsible use of resources, data protection, and the use of technological assets.

Public availability: Available on the company's corporate website.

International standards: Aligned with recognized international standards such as the Universal Declaration of Human Rights, the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights, the Declaration of Fundamental Principles and Rights at Work, and the conventions of the International Labour Organization (ILO). Aligned with the achievement of the Sustainable Development Goals (SDGs), specifically Goal 8 (Decent Work and Economic Growth). However, it does not include an explicit reference to human trafficking, forced labor, and child labor, although it expresses respect for Human Rights recognized in the Universal Declaration of Human Rights.

Monitoring: Compliance with the Code of Ethics is monitored by the Ethics and Compliance Committee. The company monitors the percentage of employees trained in the Code of Ethics. In 2024, 98% of employees were trained in the Code of Ethics. The Code is reviewed as frequently as necessary to ensure its effectiveness. Modifications related to Sapin II, revisions to the Code of Ethics, or the risk management model are discussed and approved by the Steering Committee (CODIR). Stakeholders were not directly involved in the design of the Code of Ethics, but their interests were taken into account to protect their essential rights.

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Code of Conduct for Responsible Purchasing Suppliers (Goods)

Policy name: Code of Conduct for Responsible Purchasing Suppliers (Goods) (Código de Conducta de Proveedores de Compras Responsables)

Scope: All suppliers who provide commercial goods or services to Leroy Merlin Spain.

Approval and oversight: The highest position in the company responsible for implementing the policy is the Chief Financial Officer.

Key content: Establishes principles governing the relationship between the company and its merchandise suppliers, seeking ethical and responsible conduct in the supply chain. Reflects commitment to protecting working conditions and human rights throughout the value chain, including zero tolerance for any manifestation of physical, psychological, or moral harassment, abuse of authority, or intimidating or offensive behavior against people's rights. Addresses protection and health of employees throughout the value chain and accident prevention. Prohibits child labor in accordance with the strictest standard between applicable local legislation and ILO Convention 138 (minimum legal age of 15 years). Prohibits all dangerous and night work for persons under 18 years of age. Abolishes forced labor and trafficking in persons through the prohibition of slavery, bonded labor, debt bondage, or other forms of labor performed involuntarily under threat of punishment without remuneration, and the prohibition of prison labor. Requires suppliers to comply with current data protection regulations.

Public availability: Available on the Leroy Merlin Spain corporate website.

International standards: Aligned with the Leroy Merlin Spain Code of Ethics and adheres to the Universal Declaration of Human Rights, the Principles of the Global Compact, and the Sustainable Development Goals (SDGs), especially SDG 8 (Decent Work and Economic Growth).

Monitoring: Leroy Merlin Spain promotes ethics and compliance among its suppliers through adherence to the code, communication, and training. Suppliers must formally commit to compliance with the code and communicate it to their employees. The company may conduct audits, either internally through the Quality Department or through independent third parties, at any supplier's or related facilities. Suppliers must provide the information necessary for these audits. An ethics channel (Whispli) is available to receive and manage any impacts that may arise related to human rights. In 2024, 99.6% of merchandise purchasing suppliers signed the Code of Conduct. Stakeholders were not directly involved in the design of this policy; however, it was established taking into account the interests and needs of Leroy Merlin Spain's main stakeholders, especially employees in the value chain.

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Code of Conduct for Indirect Purchasing Suppliers

Policy name: Code of Conduct for Indirect Purchasing Suppliers (Código de Conducta de Proveedores de Compras Indirectas)

Scope: All of the company's indirect purchasing suppliers, including those that provide goods and services not intended for direct sale to the end customer.

Approval and oversight: The highest position in the company responsible for implementing the policy is the Chief Financial Officer.

Key content: Establishes principles and values governing the relationship between the company and its indirect purchasing suppliers, promoting ethical and responsible behavior at all stages of the supply chain. Addresses protection of working conditions and human rights in the value chain, accidents and/or illnesses among suppliers resulting from their work for the company, and legal proceedings associated with cases of moral or physical harassment toward an employee in the value chain. Prohibits child labor and hazardous work, abolition of forced labor and human trafficking, ensures freedom of association and collective bargaining, and requires employee remuneration and working hours in accordance with ILO conventions. Suppliers are required to comply with current data protection regulations.

Public availability: Available on the Leroy Merlin Spain corporate website.

International standards: Aligned with the Leroy Merlin Spain Code of Ethics and adheres to the Universal Declaration of Human Rights, the Principles of the Global Compact, and the Sustainable Development Goals (SDGs), especially SDG 8 (Decent Work and Economic Growth).

Monitoring: Leroy Merlin Spain monitors compliance through various mechanisms, including risk assessment, supplier due diligence, training, and communication. The Quality Department conducts social audits of suppliers. An ethics channel (Whispli) is available to receive and manage any potential impacts related to human rights. Suppliers are encouraged to report any breaches of the code, and penalties are provided for non-compliance. In 2024, 81% of indirect purchasing suppliers (out of a total of 430 suppliers with a turnover of more than €150,000 and special risk cases) signed the Code of Conduct. Stakeholders were not directly involved in the design of this policy, but it was designed taking into account the interests and needs of Leroy Merlin Spain's main stakeholders, especially those working in the value chain.

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Corporate Policy and Procedure for Internal Information Systems

Policy name: Corporate Policy of the Internal Information System (Política Corporativa del Sistema de Información Interno)

Scope: All directors, managers, professionals, and individuals reporting to ADEO. Any individual or legal entity with a professional relationship with ADEO is encouraged to use the Internal Information System.

Approval and oversight: The ADEO Iberia Board of Directors promotes and approves this Policy. The ADEO Board of Directors appoints collegiate bodies responsible for the internal information system for each group of companies. At Leroy Merlin Spain, the Ethics Committee is responsible.

Key content: Defines the company's commitment to conducting its business in compliance with the law and in an ethical, honest, and transparent manner, showing the utmost respect for its stakeholders. Encourages a "speak up" culture and encourages stakeholders to report any concerns about unethical behavior or regulatory non-compliance. Establishes the principles and guarantees that govern the operation of ADEO's Internal Information and Whistleblower Protection System. Addresses compliance risk management, including detection and prevention of internal and external regulatory non-compliance, and promotion of ethics and transparency within the company. Establishes various channels of communication: the Ethics Channel (online platform available at corporate level and in compliance with three harassment protocols: workplace harassment, sexual and gender-based harassment, and harassment against the LGBTI community), and in-person or videoconference meetings with the Internal Information System Manager upon request.

Public availability: Available on the corporate website, on the intranet of each of the dependent entities, as well as on the Ethics Channel platform itself.

International standards: Linked to the Code of Ethics, mandatory under the Whistleblower Protection Act; includes an annex on protection against retaliation; and is accompanied by the ADEO Internal Information System Management Procedure. Aligned with the achievement of Sustainable Development Goals (SDGs) 16 (Peace, Justice, and Strong Institutions) and 8 (Decent Work and Economic Growth).

Monitoring: The policy is subject to updates if necessary due to changes in legislation. Stakeholders were not directly involved in the design of this policy, but the interests and needs of the main stakeholders identified in the dual materiality study (ESRS 2) were taken into account.

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Corporate Policy on Compliance and Prevention of Criminal Risks

Policy name: Corporate Policy on Compliance and Prevention of Criminal Risks (Política Corporativa de Compliance y Prevención de Riesgos Penales)

Scope: Corporate in nature and applies to members of the company's governing bodies, executives, and employees, as well as to third parties acting on behalf of and representing the group.

Approval and oversight: Approved by the Board of Directors. The Compliance Function (Compliance Department) is responsible for ensuring the proper functioning of the compliance program.

Key content: Main objective is to foster a strong corporate culture of integrity, transparency, and professionalism, in which ethics and regulatory compliance are central elements. Establishes principles and guidelines for developing professional conduct consistent with the company's ethical principles and serves as a framework for the Compliance and Criminal Risk Prevention Model. Strongly condemns the commission of any type of crime, establishing a framework for the prevention of criminal risks. Ensures that no crime is justified based on a benefit to the organization.

Public availability: Available on the company's corporate intranet.

International standards: Based on the Code of Ethics and aligned with the achievement of the Sustainable Development Goals (SDGs), specifically Goal 8 (Decent Work and Economic Growth).

Monitoring: Subject to continuous review and improvement when required by regulatory, social, business, or other circumstances. The monitoring and oversight system allows for ongoing validation of the implementation of Leroy Merlin Spain's compliance program, periodically verifying the effectiveness of the internal regulations and controls implemented. Stakeholders were not directly involved in the design of this policy; however, the policy seeks to protect the interests and needs of the parent company (ADEO), its employees, and third parties who may act on its behalf.

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Information Security Policy

Policy name: Information Security Policy (Política de Seguridad de la Información)

Scope: Covers all company information of any type and applies to all users of Leroy Merlin's information systems (internal or external collaborators, suppliers, and third-party users).

Approval and oversight: Approved by the Steering Committee. The highest-ranking position within the organization responsible for implementing this policy is the Chief Executive Officer of Digital Tech & Data.

Key content: Aims to design, implement, and monitor an effective set of measures to minimize the risks of compromising the confidentiality, integrity, and availability of the company's data and information. Reflects commitment to preserving the confidentiality, integrity, and availability of information and the information assets that support it. Establishes appropriate criteria for assessing information security risks, with the aim of addressing and minimizing them to acceptable levels; defining and reviewing information security objectives; establishing the necessary means to guarantee the continuity of operations and services provided to customers; and promoting and implementing appropriate measures to ensure the training, capacity building, and awareness-raising of all staff in information security.

Public availability: Not specified.

International standards: Developed taking into account international standards and best practices (specific standards not detailed in excerpts).

Monitoring: The company has an information security management system endorsed by AENOR through the ISO 27001 Information Security Certification. Internal audits by ADEO on data protection are conducted. Stakeholders were not directly involved in the design of this policy.

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Other relevant policies

The company also references the following policies related to business conduct:

• Responsible Purchasing Policy for Wood Products (addresses environmental and social sustainability, legality, responsible forest certification, and respect for ecosystems and local communities; requires suppliers to provide traceability and conditions of origin for wood products)
• Agreement regulating the right to digital disconnection for workers (guarantees digital disconnection for all employees, enabling work-life balance)
• Diversity, Equity and Inclusion Policy (promotes diversity, equity, and inclusion)
• Protocol for the prevention and treatment of situations of moral and sexual harassment (prevention and treatment of moral, sexual, and gender-based harassment)
• Policy on the Use of Technological Media and Equipment (PUMET) and Policy on the Use of Artificial Intelligence Media and Services (PUMSIA) (related to data protection and cybersecurity)

These policies contribute to the overall framework of business conduct and corporate culture but are detailed in other sections of the report (primarily in Social - Own Personnel, or Governance - Data Protection).

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Summary of governance and monitoring

The Board of Directors, the Audit Committee, and the Executive Leader Team serve as the company's administrative, management, and supervisory bodies. The Compliance Department and the Iberian Audit Department (both part of ADEO Holding Iberia, SA), as well as the Internal Control and Human Resources Departments, the Ethics Committee, and the Internal Control Body, are responsible for monitoring impacts and detecting and assessing risks.

The Ethics Committee, managed by the Compliance Department, oversees business conduct. It is composed of the Chief Financial Officer, People Leader, General Counsel, Anti-Discrimination Officer, Anti-Fraud Officer, Regional Director, Compliance Director, and Compliance Officer. The Data Protection Officer, Health and Safety Officer, and Diversity, Equity, and Inclusion Officer also serve as non-permanent members. The Committee meets quarterly and reviews all aspects related to ethics and regulatory compliance. It reports directly to the Board of Directors.

The status of ethical-business compliance models and the evolution of the compliance plan are reported at least annually to the Board of Directors or to its Audit Committee. The Audit Committee analyzes and approves the company's annual accounts, which include its management report and sustainability report.

Risks and their management are reported throughout the year to the Board of Directors and the Audit Committee. The objectives and their monitoring are carried out by the Steering Committee, with periodic monitoring conducted.

In 2024, employee awareness of the Code of Ethics and the ethics channel was measured through the Employee Experience Index (EXI). Results showed 91% of employees believe they understand how the Code of Ethics drives their daily activities, and 88.7% of employees say they would use the ethical channel if they ever needed to.

An Ethics and Compliance Training Plan is developed annually. In 2024, 8,840 hours of ethics and conduct training were provided. Training related to the Code of Ethics is mandatory and is renewed each time it is updated. Training on anti-corruption issues is mandatory for at-risk populations and must be renewed every two years. By the end of 2024, 98% of employees were trained in the Code of Ethics, and 82.8% of at-risk positions were covered by anti-corruption and anti-bribery training programs.

Incidents of corruption or bribery

Confirmed incidents

In 2023 and 2024, there were no cases of corruption or bribery within the organization (page 297).

Convictions and fines

In 2023 and 2024, no convictions or fines were recorded in corruption and bribery cases (page 297).

Disciplinary actions

There are no confirmed cases of staff members being dismissed or disciplined for corruption or bribery-related reasons in the reporting period (page 297).

Contracts terminated

There have been no cases in which contracts with business partners have had to be terminated or not renewed for reasons related to corruption or bribery (page 297).

Investigation procedures and speak-up mechanisms

LEROY MERLIN Spain provides multiple channels for reporting concerns:

• Ethics Channel (Whispli): An online platform available at the corporate level and accessible through the company's website. The channel is public and open to any stakeholder, including employees and value chain workers. Reporters can use this channel anonymously, and complaints are handled confidentially with respect for privacy and data protection rights (pages 213, 270, 277).

• Ethics and Compliance Committee: Responsible for interpreting and ensuring compliance with the Code of Ethics, as well as promoting its training and dissemination. The Committee processes and resolves notifications and inquiries submitted through the Ethics Channel, respecting the rights and guarantees of all parties involved (pages 160, 270).

• Whistleblower Protection: The company has a Corporate Policy of the Internal Information System that establishes principles and guarantees for whistleblower protection. Authors of reports submitted in good faith are protected and may not be subject to sanctions, discriminatory measures, or direct or indirect retaliation (pages 161-162, 270). Specific protection measures are detailed in Annex III (Protocol on the Prohibition of Retaliation) of the Internal Reporting System Procedure (page 213).

• Monitoring and audits: The company implemented a Corporate Crime Monitoring Plan, conducting internal audits on high risks including business corruption, which generated improvement action plans. ADEO's internal audit on corruption risk prevention (based on French SAPIN II law) yielded positive results in governance, training, alert channels, integrity, and internal controls (page 282).

The Compliance Function (Compliance Department) is responsible for ensuring the proper functioning of the compliance program, with monitoring through files that compile all cases submitted to the ethics channel. The auditor reviews any cases of corruption annually, and internal or group audits are conducted periodically (page 213).

Political influence and lobbying activities

Political engagement approach

Responsibility for liaison regarding the company's activities and commitments related to the exercise of political influence falls to the Legal Department, which also involves other areas of the company depending on the topic at hand.

LEROY MERLIN Spain's position on the topics discussed is that established by the associations of which it is a member. The evolution of these topics affects the company's management of material impacts, risks, and opportunities, based on regulatory changes or sectoral positioning that may arise from these activities.

Political contributions

LEROY MERLIN Spain does not make financial or in-kind political contributions.

Administrative appointments

In the last two years, there have been no cases of appointment of any member of the administrative, management, and supervisory bodies who has held a comparable position in the public administration (including regulators).

Trade association memberships

LEROY MERLIN Spain is a member of the following associations, which are considered pressure groups:

• National Association of Large Distribution Companies (ANGED)
• Association of Manufacturers and Distributors (AECOC)
• Association of Hardware and DIY Distributors (ADFB)

Although the company is not legally required to be a member of a chamber of commerce or other organization representing its interests, LEROY MERLIN Spain belongs to the Franco-Spanish Chamber of Commerce.

Focus areas

Throughout 2024, these associations addressed topics related to:

• Employment and talent in the sector
• Commerce, consumption, and business hours
• Sustainability
• Technology and innovation

The topics covered relate to the impacts, risks, and opportunities of LEROY MERLIN Spain and to strategic issues for the company.

EU Transparency Register

LEROY MERLIN Spain is not registered in the EU Transparency Register or in an equivalent transparency register of a Member State, nor is ADEO.

Financial resources

In 2024, financial, human, and material resources have been allocated for all governance-related actions. However, and in accordance with the significance criteria established by regulations, they are not reported in this document because they are not considered significant quantitatively, being below 0.2% of the company's revenue; nor qualitatively, as they do not represent a widespread negative or positive impact on stakeholders or the environment. Similarly, the allocation of resources for 2025 has not yet been planned.

Payment practices

Payment terms and performance

LEROY MERLIN Spain agrees with its suppliers on payment terms that comply with local and European laws and regulations. In the case of indirect purchasing suppliers, this is based on Law 3/2004, amended by Law 15/2010, known as the Late Payment Law.

Standard payment term for indirect purchasing suppliers: 60 days

Average payment term for indirect purchasing suppliers in 2024: 35.99 days

Payment performance for indirect purchasing suppliers (2024):

Methodology

The average payment term for indirect purchasing suppliers is calculated based on the invoice date and the due date for the payment issued for the adjustment. The calculation is based on a weighted average. Information is extracted from the internal tool with all the necessary data.

Merchandise suppliers

In the case of merchandise suppliers, the payment relationship is governed by a private agreement between the parties, in accordance with the provisions of the Retail Trade Regulation Act.

Supplier payment support

The company offers all suppliers access to a confirming service, with advantageous market conditions, so that any supplier can receive early payment on their invoices before they are due. The Cash Management team, part of the Finance department, is responsible for managing supplier payments.

Legal proceedings

At the end of 2024, there were no legal proceedings at LEROY MERLIN Spain related to payment delays.