Kirkbi Annual Report 2023

Part 1

Introducing KIRKBI

KIRKBI A/S is the Kirk Kristiansen family’s private holding and investment company founded to build a sustainable future for the family ownership through generations. KIRKBI’s strategic activities include 75 % ownership of the LEGO Group.

KIRKBI – a family-owned company

Purpose

Building a sustainable future for the family ownership of the LEGO® brand through generations.

Fundamental objectives

KIRKBI focuses on three fundamental tasks, all supporting the sustainable family ownership.

We work to protect, develop and leverage the LEGO idea and brand

We are committed to a responsible investment strategy to ensure a sound financial foundation and contribute to a sustainable development in the world.

We support the owner family members as they prepare future generations to continue the active and engaged ownership as well as support their private activities and philanthropic work.

LEGO Group founded in 1932

The LEGO Group was founded by Ole Kirk Kristiansen in 1932. Today, KIRKBI owns 75 % of the LEGO Group. KIRKBI is owned by the Kirk Kristiansen family.

75 % 25 %

Our name

Locations

1 Billund

2 Copenhagen

3 Baar

KIRKBI’s activities

Support Activities

We support the owner family members in their active and engaged ownership which include administrative services to their investment activities, private activities, companies and philanthropic work.

The LEGO School is a preparational programme for the 5th generation owners of the Kirk Kristiansen family.

Associated Foundations

2023 at a glance

2023 was a milestone year for the family ownership of KIRKBI and the LEGO® brand as the gradual generational handover from the 3rd to the 4th generation of the Kirk Kristiansen family was successfully completed.

In May 2023, on the day of his 50th anniversary, the 3rd generation family owner Kjeld Kirk Kristiansen stepped down from the Chair role of KIRKBI handing over his last formal role to Thomas Kirk Kristiansen, the most active owner in the 4th generation. This was the final step in a successful generational handover carried out over more than ten years, during which Thomas Kirk Kristiansen has gradually taken on more roles and responsibilities. At the same time, Agnete Kirk Kristiansen, 4th generation owner, joined the KIRKBI board of directors as a member.

The handover was an opportunity to celebrate the invaluable impact that Kjeld Kjeld Kirk Kristiansen has had on the development of the LEGO brand, the LEGO Group and KIRKBI for five decades. Also, it was an opportunity for the owner family

to reflect on their ambitions for the future – leading to the articulation of a long-term vision which will guide the family ownership and its activities over coming generations.

Financial highlights

2023 was a year of continued global instability, high inflation levels and interest rates increasing to a high ‘new normal’. The geopolitical instability including wars in Ukraine and Gaza impacted families and children across the world, increasing the need for support to which KIRKBI and associated foundations responded. For the year, KIRKBI granted DKK 0.2 billion to charity, the LEGO Foundation committed total grants of DKK 1.3 billion to Learning-throughPlay activities across the world, and Ole Kirk’s Fond granted DKK 0.3 billion to projects benefitting children and families.

Despite a declining toy market, the LEGO Group delivered a solid performance in 2023 leading to a significant market share gain. The performance across all business areas led to a consolidated KIRKBI result for 2023 of DKK 11.3 billion. The 2023 after tax cash inflows to KIRKBI were DKK 7.3 billion, 38 % lower than the DKK 11.7 billion realised in 2022, impacted by significant investments in production capacity in the LEGO Group.

LEGO Brand and Related Activities

During 2023, the LEGO brand continued to make a positive impact on millions of children of all ages through the LEGO Foundation and through digital, physical, and location-based experiences.

A highlight for the year included the LEGO Group’s launch of LEGO Fortnite in December. The first digital play experience to come from the strategic partnership between the LEGO Group and Epic Games initiated in early 2022. The financial performance of the LEGO Group showed growth in consumer sales and revenue of 4 % and 2 %, respectively and a profit before tax of DKK 17.1 billion. Throughout the year, the LEGO Group continued to prioritise strategic initiatives designed to drive long-term sustainable growth, including construction of new factories in the United States and Vietnam as well as expansion of three existing production sites.

Having fully recovered from the COVID-19 pandemic, Merlin Entertainments, including the LEGOLAND® Parks, saw a positive development in 2023 with 59 million visitors. The satisfactory underlying result of Merlin Entertainments was negatively impacted by

extraordinary write-downs and increased interest rates which led to a net loss for the year.

For BrainPOP, acquired by KIRKBI in 2022, the performance was impacted by lower growth following the end of federal COVID-19 funding. This has led to write-down of the goodwill recognised upon acquisition.

Sustainable investment activities

In a challenging market, KIRKBI maintained its focus on value creation in the Core Capital portfolio and expanded its activities within Thematic Capital. Among others, highlighted by further investments into the solar energy developer Adapture Renewables Inc. which doubled its development pipeline in 2023 to 4 GW and acquired a 450 MW portfolio of solar projects to commence construction in 2024. Further, investments were made in circular plastic solutions and planting of the first trees as part of the ambitious Project Evergreen, where up to 10,000 ha of low yield farmland will be turned into forest over the coming years.

The Core Capital portfolio showed a return of 4.7 % in 2023, supported by a positive market momentum towards the end of the

year. During 2023, the investment portfolio was reduced by DKK 11 billion related to share buybacks made by the owner family in connection with the generational handover from the 3rd to the 4th generation.

As active owners, KIRKBI continued to engage with its investment portfolio on sustainability. In 2025, 45 % of KIRKBI Scope 3 emissions from equities, bonds, private equity and debt portfolios must come from companies setting SBTi validated targets and at the end of 2023, the coverage reached 40 %. In addition, strong progress was also made in the reduction of emissions stemming from KIRKBI’s own operations, among others driven by continued focus on responsible travelling and reduced emissions from the Real Estate portfolio.

A foundation for the future family ownership

As we enter 2024, we look forward to building on the strong foundation established over previous years with the successful generational handover and continued growth of the LEGO® brand – and with the new long-term family vision as a north star to guide KIRKBI’s next chapter.

We want to send a warm thank you to all the dedicated and passionate employees, who have done their utmost throughout the year to drive impact each and every day. Also, a warm thank you to our many partners. We look forward to yet another year of fruitful collaboration executing on our strategy and building a sustainable foundation for the continued family ownership of KIRKBI and the LEGO brand.

Thomas Kirk Kristiansen Chair of the Board

Søren Thorup Sørensen CEO

KIRKBI Fundamentals

The business compass

The LEGO® brand mission is ‘To inspire and develop the builders of tomorrow’. The owner family aims to fulfil the mission by enabling children to develop their potential through meaningful play and learning experiences.

This mission is reflected in the LEGO Idea Paper. Written by the Kirk Kristiansen family, the LEGO Idea Paper outlines the mission, vision, values, and promises which unite all entities in the LEGO ecosystem. The KIRKBI Fundamentals reflect the LEGO Idea Paper and serve as the compass guiding all business activities in KIRKBI.

Active and engaged family ownership

The LEGO Group ownership has been with the Kirk Kristiansen family for four generations and active family ownership has always been viewed as not only a task, but also as an obligation to make a meaningful difference for children and the world they grow up in.

The owner family defines active ownership of the LEGO brand as having a deep interest and engagement in how the business develop and engage with children as well as stakeholders – and how the values are lived. In each generation, one member of the owner family will take the role as most active owner and be engaged in KIRKBI and the LEGO branded entities on behalf of the family. Thomas Kirk Kristiansen is the most active owner in the 4th generation.

Mission Inspire and develop the builders of tomorrow

Purpose Building a sustainable future for the family ownership of the LEGO brand through generations

Fundamental objectives

LEGO Brand and Related Activities

We work to protect, develop, and leverage the potential of the LEGO idea and brand across entities

Investment Activities

We invest responsibly to ensure a sound financial foundation for the owner family’s activities and contribute to a sustainable development in the world

Support Activities

We support the owner family members as they prepare for future generations to continue the active and engaged ownership and support their private activities and philanthropic work

Creating a sustainable future for generations to come

A long term vision for family ownership

With the generational handover completed in May 2023, the 4th generation of the Kirk Kristiansen family has articulated an ambitious, long-term family vision – intended to guide their activities over the coming years.

Building on the legacy of the LEGO® brand and financial strength of KIRKBI, the owner family will work to:

• Enable all children to learn through play: The owner family will work to make a positive difference for all children – by bringing highquality play and learning experiences to the builders of tomorrow. Through the well-known LEGO branded activities – and by taking an ambitious role in digital learning to shape the education of children to deliver real learning outcomes.

• Drive impact on climate issues: The owner family will accelerate the efforts to drive impact on two of the biggest global climate issues of our time: climate change and pollution from nonsustainable plastic materials. Through ambitious investments, the owner family will work to reduce carbon emissions and drive progress in the development and scaling of circular plastic solutions.

Guided by the long-term family vision the Kirk Kristiansen family will center its activities around four business themes with a separate function supporting the family members and their private activities and philanthropic work.

LEGO Brand

Playful Learning

Bring the LEGO Idea to children of all ages – through a sustainable and unified brand experience

Build a leading position in digital learning to shape children’s education

Climate

Financial Investments

Family Support

Work to become a global frontrunner in building a sustainable future for generations to come

Ensure a sound financial base for the owner family and its activities through generations

Maintain a future-proof Family Support function that all family members and associated foundations can turn to for support

The KIRKBI Group Business Model

Cash outflow

Operations and charity

LEGO Brand and Related Activities

• Brand development and protection

• Digital play and learning

Investment Activities

• Core Capital

• Thematic Capital

Tax

Dividends and share buy-backs

LEGO Foundation grants which support children reaching their full potential

Financial Highlights KIRKBI Group

Information about presentation and preparation of the consolidated financial statements for the KIRKBI Group

The consolidated financial statements of the KIRKBI Group have been prepared in accordance with IFRS and the accounting policies are unchanged from last year.

To ensure appropriate presentation of relevant information for the user of the financial statements, certain materiality judgements of content and presentation have been made. Please refer to note 10.1 Basis of reporting in the financial statements for further information.

Information about report on Corporate Social Responsibility (CSR)

For the statutory report on CSR in accordance with the Danish Financial Statements Act §99a reference is made to the sections ‘People & Operations’ (page 32-35) and ‘Sustainability’ (Page 41-47).

Financial ratios

Financial ratios have been calculated in accordance with the “Guidelines and Financial Ratios” as issued by the Danish Society of Financial Analysts.

Environmental data

KIRKBI’s greenhouse gas (GHG) data is prepared in accordance with the principles set out in note 10.3 to the financial statements to which reference is made.

Part 1 Business Areas

KIRKBI’s activities are focused on three fundamental tasks all contributing to enabling the Kirk Kristiansen family to succeed with the mission to inspire and develop the builders of tomorrow.

LEGO Brand and Related Activities

KIRKBI supports the owner family in its active ownership of the LEGO® brand and activities related to the LEGO Idea. Each LEGO branded entity has a dedicated role in fulfilling the LEGO Brand Vision – to become a global force for Learning-through-Play.

‘play well’ in Danish, thought of by Ole Kirk Kristiansen, who founded the company in 1932 – and closely connected to the LEGO System in Play, developed by Godtfred Kirk Christiansen, which gives children the possibility to build whatever they can imagine with the LEGO brick building system.

The LEGO brand vision to become a global force for Learning-through-Play is anchored in the LEGO Idea and fundamental belief that playful activities help children of all ages learn and develop essential skills such as creativity, curiosity, imagination, and critical thinking. And while playfulness is not the only way to learn, it is a powerful approach to learning in general, including classical curriculum concepts such as reading, writing and arithmetic which help children succeed in life.

The LEGO brand vision outlines the efforts to establish, innovate and offer playful learning across a wide spectrum of online, physical and hybrid experiences in children’s free time, family time and school time. It was initially expressed in the name, ‘LEg GOdt’, meaning

Thus, for more than 90 years, the Kirk Kristiansen family has been active owners of the LEGO brand and with the strong growth of the LEGO Group and related LEGO branded activities, KIRKBI has supported the owner family in the work to protect, develop and leverage the full potential of the LEGO Idea and brand across entities. Now following the completion of the generational handover from the 3rd to the 4th generation of the Kirk Kristiansen family, the governance of all activities related to the LEGO Brand and LEGO Idea has been further streamlined and fully consolidated in KIRKBI as the holding company supporting the long-term family ownership.

Read more about the active ownership

Consolidating the active ownership of the LEGO® brand in KIRKBI

Following the completion of the generational handover in 2023, it was decided to consolidate the active ownership of the LEGO® brand in KIRKBI and phase out the LEGO Brand Group established in 2017.

The LEGO Brand Group functioned as a separate virtual entity within KIRKBI having a dual-purpose: To protect, develop and leverage the full potential of the LEGO brand across the LEGO branded entities, and to enable the active and engaged family ownership of the LEGO brand through generations.

Strategic step changes

Chaired by Jørgen Vig Knudstorp in close partnership with Deputy Chair and 4th generation family owner Thomas Kirk Kristiansen, the LEGO Brand Group facilitated the 2032 LEGO brand strategy and vision – to become a global force for Learning-through-Play. Since it was established, the LEGO Brand Group has executed key strategic step changes important from an owner and development perspective and separate from daily operational tasks – such as:

• Investments in digital play and digital learning, culminating with KIRKBI investing in Epic Games and acquiring BrainPOP Education in 2022

• Investments in improving the experiences in LEGOLAND® Discovery Centers and LEGOLAND® Resort Parks, supported by KIRKBI joining a consortium taking Merlin Entertainments private in 2019

• Collaboratively building a new LEGO Brand Platform guiding numerous activities as well as supporting the digital transformation and sustainability aspirations for the LEGO branded entities

• Through established brand and advisory boards explore ideas at the perimeter of the LEGO brand and align on brand governance fundamentals

Continuing the family commitment

After the final handover from the 3rd to the 4th generation of the owner family and with Thomas Kirk Kristiansen now chairing KIRKBI, the LEGO

Group, and the LEGO Foundation, it has been a natural development to consolidate the family ownership and governance of activities related to the LEGO brand and Idea in KIRKBI. As a way of simplifying the governance set-up and continuing the owner family’s commitment to explore the full potential and possibilities of the LEGO Idea. It also formally ends Jørgen Vig Knudstorp’s governance and leadership roles with regards to the LEGO brand, a role he has played for the past 20 years, first as responsible for brand and business development, then as CEO and President and finally as executive chair of the LEGO Brand Group.

Jørgen Vig Knudstorp continues to support the Kirk Kristiansen family in realising the new long-term family vision through board positions, as Special Partner to the family and as member of the KIRKBI leadership team.

The LEGO Group

Despite a challenging market environment and a global toy market declining with 7 % in 2023, the LEGO Group delivered a solid performance with growth in consumer sales of 4 % leading to significant market share gain.

Revenue for the year increased by 2 % to DKK 65.9 billion and the profit before tax ended at DKK 17.1 billion compared to DKK 17.7 billion in 2022. The profit for 2023 was driven by strong consumer demand in especially Americas, partly offset by a drop in momentum in China. The operating margin was 26.0 % in 2023 against 27.7 % in 2022. Excluding the impact of foreign currency exchange rates, operating profit declined by 2 % against 2022.

The operating profit was impacted by accelerated but balanced strategic initiatives supporting long-term growth, including brand awareness, product innovation, retail platforms, digitalisation and sustainability. Further, the LEGO Group made substantial investments in increasing production capacity. The LEGO Group’s net profit was DKK 13.1 billion in 2023 against DKK 13.8 billion in 2022.

About the LEGO Group

Based on the world-famous LEGO® brick and the philosophy of Learning-throughPlay, the LEGO Group provides unique play experiences for children of all ages.

Through creative play, the LEGO Group aims to inspire and develop the builders of tomorrow and nurture the skills to help future generations thrive and develop. When children play, they learn. They learn about problem-solving, communication, and collaboration. Skills that are more critical than ever. In the future, children will hold jobs that have not yet been invented. The only way children become prepared is by developing skills that can be applied universally.

Play is an effective way to develop these skills from a young age, and LEGO play is especially powerful as it offers children endless possibilities. Just six two-by-four LEGO bricks can make 915 million

different combinations. And they are made with such precision that they stick together like glue, but come apart easily so they can be built, unbuilt and rebuilt into whatever a child can imagine.

Today, the LEGO Group employs +28,000 colleagues and the products are sold in more than 120 countries. Among others through 1,031 LEGO branded stores, which include 195 stores owned and operated by the LEGO Group, and 836 LEGO Certified Retail stores owned and operated by partners.

Production facilities are located in Denmark, the Czech Republic, Hungary, China and Mexico and new factories are being etablished in Virginia, USA, and Vietnam. In addition to the headquarters in Billund, Denmark, the company has main offices in USA, UK, China and Singapore.

The LEGO Group 5 years’ performance (m DKK)

Introducing LEGO Fortnite

In december 2023, LEGO Group and Epic Games launched the muchawaited LEGO® Fortnite®. A survival crafting game launched inside the Fortnite platform and the first play experience from the strategic partnership between the LEGO Group and Epic Games that aims to

develop fun and safe digital spaces for children and families.

The partnership between Epic Games and the LEGO Group was initiated in 2022 and followed by a 1 billion USD investment from KIRKBI in Epic Games in the spring of 2022.

It attracted more than 2.4 million concurrent users at launch, making it the most popular experience within Fortnite at the time.

Read case story on LEGO Fortnite launch

Related Activities

Merlin Entertainments

Merlin Entertainments, operator of the LEGOLAND® Parks and LEGOLAND® Discovery Centers, reported continued revenue growth in 2023, supported by a recovery in international tourism after the COVID-19 pandemic, most notably in the early part of the season.

During the year, Merlin continued its partnerships and investments to enable a unified LEGO brand experience across LEGOLAND® Parks and other play experiences. Among others announcing a global partnership with luxury car brand Ferrari and with the opening of a second attraction with the new ‘next generation’ LEGOLAND® Discovery Centre format in Washington D.C., USA in August. Merlin Entertainments continued to work with partners on the development of three LEGOLAND® resorts in China throughout the year, planned to open from 2025.

Merlin increased the number of visitors in their attractions with more than 12 % in 2023 and revenue increased by 6 % compared to 2022. The result for the year for the underlying business was slightly negative, impacted by increased interest rates. KIRKBI’s share of the net result showed a loss of DKK 0.8 billion,

In 2023, Merlin Entertainments announced a global partnership with luxury car brand Ferrari to develop immersive themed brand experience at selected LEGOLAND® Parks.

The unique LEGO® Ferrari Build and Race experience, originally introduced in LEGOLAND® California, opened in Spring at LEGOLAND® Billund and LEGOLAND® Windsor and puts visitors in the driver’s seat to build, test and race their very own LEGO Ferrari with cutting-edge digital technology, the first of its kind at any LEGOLAND® theme park.

The partnership with Ferrari is the latest development in Merlin’s strategy of creating IP partnerships with some of the world’s most popular brands.

negatively impacted by extraordinary writedowns in two LEGOLAND® Parks.

KIRKBI, through its subsidiary LEGO Juris A/S, owns the LEGO® and LEGOLAND® trademarks, which are licensed to the LEGO Group and Merlin Entertainments, respectively. In 2023, investments in strengthening the LEGO® brand continued, among others with a contribution of DKK 400 million to the global brand campaign ‘Rebuild the World’.

Throughout 2023, LEGO Education continued the execution of its strategy, focusing on growth in core subject classrooms within the United States as well as key international markets. In the post-pandemic Education market progress was made on reaching more students in core subject classrooms, delivering joyful hands-on learning experiences.

Acquired by KIRKBI in 2022, BrainPOP has continued its development of digital learning solutions for classrooms across the U.S.

By delivering student engagement and actionable insights on essential skills development, BrainPOP empowers educators to meet students where they are and improve learning outcomes. The company is investing in expanded assessment capabilities and new solutions, including BrainPOP Science - its first subject-specific offering, having already received multiple industry awards of excellence.

In 2023, the financial performance of BrainPOP was impacted by lower growth following the end of one-time federal funding related to COVID-19 and in general lower local school budgets. This has led to writedown of the goodwill and part of tax assets capitalised upon acquisition.

The LEGO® House

The LEGO® House in Billund offers the ultimate LEGO experience for fans of all ages.

In 2023 the LEGO House had a world class guest satisfaction of 85 (net promotor score) and welcomed 312,000 guests, 62 % of whom were international visitors.

Effective 1 January 2024 the ownership of the LEGO House operations transitioned from Koldingvej 2, Billund A/S, a subsidiary of the LEGO Foundation, to the LEGO Group.

Investment Activities

KIRKBI’s Investment Activities are split into a Core Capital portfolio focusing on long-term value creation and a Thematic Capital portfolio which aims to maximise impact for a more sustainable development in the world.

Investment approach and principles

To reflect the strategic objectives, the investment portfolio is split into two areas:

Core Capital and Thematic Capital.

Across all investment activities, KIRKBI aspires to create value through responsible ownership and investments characterised by:

• Long-term mindset

• Engaged, ambitious, and active ownership of the companies and properties we invest in

• Practice active ownership that lives up to high ESG standards

• Work with partners with high integrity to create mutual long-term value

• Focus on investments where rigorous due diligence enables deep insights into risk and return

Responsible investment

ESG factors are integrated in KIRKBI’s assessment of attractiveness and performance of an investment. ESG is considered both in the due diligence phase and as part of the ongoing ownership supporting a responsible behavior both for companies and properties to protect the value and enhance long-term returns.

Investment activities are regularly screened for compliance with international conventions and norms as well as measured against high responsibility standards and KIRKBI’s guidelines have appropriate flexibility to address differences among strategies and managers.

KIRKBI assesses its potential investments and monitors its portfolio considering the following:

• Alignment with KIRKBI’s overall values

• Activities on the negative list

• Performance in areas of material ESG risks and ability to manage these relative to industry peers

• Involvement in notable ESG controversies related to the company’s operations and/or products, possible breaches of international norms and principles,

such as the UN Global Compact, and performance with respect to these

Furthermore, investments in certain industries such as tobacco, armament, gambling, and adult entertainment are excluded.

Strategic objectives Investment Portfolio Aim

Long-term and responsible investment strategy to ensure a sound financial foundation for the family’s activities

Contribution to a sustainable development in the world

Core

Capital (Equity, Real Estate, Fixed income investment)

Deliver a long-term, attractive riskadjusted return and a responsible investment strategy. Secure financial flexibility and liquidity for the owner family, the LEGO® branded entities and other strategic activities

Thematic Capital (Energy Transition, Circular Plastics, Land Sustainability, Building Billund)

Maximise impact and contribution towards a more sustainable development in the world, through long-term investments and active ownership

How we engage as owners of companies

KIRKBI engages actively with portfolio companies and investment partners with the following four primary focus areas:

Strategy

Clear long-term vision for the company. The company’s robustness and positioning for long-term sustainable growth as well as 3-5 years’ value creation planning

Sustainability

Focusing on the company’s continuous improvement to ensure sustainable growth via continuous progress within environmental and social areas.

Ensuring a strong foundation for responsible business conduct

60,000

40,000

30,000

20,000

1 3 2 4 10,000

People and governance

Ensuring that the right people and competencies are present on the Board of Directors and in management teams as well as a clear division of responsibility across owners, board, and executive management. Ensuring that the company’s systems and procedures are appropriate and supportive of its long-term development

Financial discipline

The company’s efficiency around capital allocation and structure which supports the strategic plan.

50,000 Equity Real Estate Fixed Income Opportunities

6,000

4,000

3,000

2,000

1,000

70,000 2023 2022 0

5,000 Energy Transition Circular Plastics Land Sustainability Other Building Billund

7,000 2023 2022

Core Capital

In 2023, KIRKBI’s Core Capital Investment portfolio showed a return of 4.7 % supported by a positive market momentum towards the end of the year.

At year-end 2023, KIRKBI’s Core Capital portfolio had a total value of DKK 85 billion which was DKK 5 billion lower than at year-end 2022, impacted by share buybacks totalling DKK 11 billion effectuated in connection with the generational handover in the owner family from the 3rd to the 4th generation.

The investment portfolio delivered a return of DKK 3.8 billion in 2023 equal to 4.7 % (2022: -4.1 %). Overall, the return is considered satisfactory with especially the Fixed Income, Quoted Equity and Real Estate portfolios showing relatively strong returns while the Long-term Equity and Private Equity portfolios showed performance below expectations.

Throughout the year, KIRKBI maintained its focus on long-term value creation and responsible ownership. The investment portfolio continues to show robustness across changing market conditions, demonstrated by a 10-year average annual return of 7.2 %.

Long-term Equity

The Long-term Equity portfolio comprises significant minority stakes in listed and

privately held companies to increase KIRKBI’s exposure to investments compounding value over longer holding periods.

In 2023, KIRKBI continued the gradual roll-out of our new Long-term Equity investment strategy, targeting growing companies supported by global trends closely aligned to KIRKBI’s mission.

The Long-term Equity portfolio mainly focuses on three sectors:

• Sustainability: Companies whose products, services, or solutions contribute to limiting resource waste or reducing emissions. An example is KIRKBI’s investment in Tomra ASA, a company developing technology solutions for sorting of reusable materials.

• Healthcare: Businesses that contribute to making healthcare and life science more efficient, of higher quality, or more accessible. An example includes the investment into Surgical Science, a provider of surgical and medical simulation solutions.

• Education & Play: Companies offering playful or innovative services, software, content, and other key elements of the education and playful learning ecosystem. An example includes the investment into Kahoot!, a Norwegian game-based learning platform.

Below are details on the Long-term Equity portfolio at year-end 2023.

Long-dated US equity funds focused on

1) Ownership at year-end 2023.

2) As per latest available public information.

Financial highlights (m DKK) 2023 2022

Profit from Core Capital activities 3,777 (3,699)

Core Capital 5 years’ performance (m DKK)

Financial investment

in Kahoot!

In 2023, KIRKBI invested alongside Goldman Sachs Asset Management, General Atlantic and other co-investors to acquire Norwegian game-based learning platform Kahoot! in the context of a publicto-private transaction of the company.

Kahoot! is a game-based digital learning and engagement platform with global reach that among other things helps make learning more fun

and engaging for children, as well as for adult learners in a corporate setting. Kahoot! was founded in 2012 and has since reached over 9 billion participants in more than 200 countries.

At year-end 2023 KIRKBI owned 12.2 % of Kahoot!’s shares. The financial investment in Kahoot! is part of KIRKBI’s long-term equity portfolio.

Read case story on Kahoot! investment

Private Equity

The Private Equity portfolio is comprised by buy-out funds and co-investments with the objective of generating attractive long-term returns. In addition, the Private Equity Portfolio provides diversification across industries and geographies as well as access to opportunities in the private market that are otherwise not in the scope of the Long-term Equity portfolio.

Venture Capital

KIRKBI’s Venture Capital portfolio consists of investments into funds focused on seed capital through series C/D financing, as well as direct minority investments into early-stage companies. The Venture Capital portfolio is focused on funds and companies within the gaming, education and deep-technology spheres.

Quoted Equity

The Quoted Equity portfolio is comprised by investments in high-quality listed companies across industries and geographies. The primary objective of the portfolio is to provide attractive long-term returns and to serve as provider of liquidity for KIRKBI and related entities as well as diversification of the overall Core Capital portfolio. KIRKBI applies its influence by exercising shareholder voting rights at the annual general meeting of the portfolio companies. KIRKBI voted at 100 % of all annual general meetings during 2023.

Real Estate investments

The main objective of KIRKBI’s Real Estate portfolio is to provide long-term stable returns through sound and high-quality properties as well as by looking at redevelopment opportunities with a high sustainability and

long-term value potential, mainly in the office sector.

Geographically, the 27 investment properties in the portfolio are located in:

• Copenhagen, Denmark

• London, United Kingdom

• Munich, Germany

• Hamburg, Germany

• German-speaking part of Switzerland

During 2023, KIRKBI continued the work to DGNB certify its buildings. The total number of certified buildings is now 14 out of 27 and the certification process has been initiated for four additional buildings.

By end of the year, all of KIRKBI’s properties have climate action roadmaps in place outlining how each property can become CO2 neutral by 2030. This process is to be supported by increased data usage process automation and tenant engagement.

Fixed Income

The Fixed Income portfolio serves as a source of cash management, stable returns, and adds less volatile and less cyclical elements to the overall portfolio relative to equity investments.

Read

case story on biodiversity in Ecopark Tivoli

Ecopark Tivoli renovation

In the fall of 2023, KIRKBI completed the renovation of Ecopark Tivoli in Spreitenbach, Switzerland – a rental space covering an area of 19,000 m2. This former printing facility has gone through a thorough sustainability-focused refurbishment and will operate as a carbon-neutral property in the future.

A key property feature is the expansive roof top park covering 2,000 m2, which showcases rich biodiversity and provides a space for tenants to engage in social and physical activities. Currently, the occupancy is 85 %, reflecting a strong interest in this eco-friendly workspace.

Thematic Capital

During 2023, KIRKBI continued its progress within thematic capital, leveraging the foundation and capabilities established over recent years to scale investments across the portfolio.

KIRKBI’s thematic investments are driven by the owner family’s commitment to contribute to a sustainable development in the world. To maximise impact while ensuring long-term return on investment, KIRKBI focuses on four investment themes: Energy Transition, Circular Plastics, Land Sustainability, and Building Billund.

The approach is twofold: KIRKBI invests in companies with more mature technologies, where exercise of active ownership can strengthen their performance and support them reach their full potential. An example is KIRKBI’s investment in Adapture Renewables Inc., a US-based developer of solar facilities and energy storage. At the same time, KIRKBI explores new technologies that have moved beyond the prototype phase and require risk-willing and long-term capital to reach scale. An example is the investment in the German company APK AG, which operates in the plastic recycling space.

Building on the foundation, capabilities and partnerships established over recent years, KIRKBI overall made good progress within thematic capital during 2023. Achievements include expansion within Land Sustainability,

scaling existing investments in Energy Transition and completing new investments in Circular Plastics.

Energy Transition

KIRKBI has an ambition to drive impact within decarbonisation by investing in mature renewable technologies such as solar and wind – complemented by investments in emerging renewable technologies, notably within energy storage and power-to-x.

Over the coming years, KIRKBI intends to expand its Energy Transition portfolio by investing in growth-focused platforms, bolstering off-take and end-use adoption of renewables. Simultaneously, KIRKBI will fund technology and capacity builders within the emerging technologies space – to enable a higher penetration of renewable energy and support decarbonisation of hard-to-abate industries.

By end of 2023, the Energy Transition portfolio comprised the following:

Energy

Circular

Northern

Worldwide

Land

Building

• 25 % of the Burbo Bank Extension offshore wind farm with a total capacity of 258 MW, located off the coast of Liverpool, UK.

• Full ownership of the solar energy developer Adapture Renewables Inc., specialised in developing, engineering, building, and operating distributed utilityscale solar photovoltaic (PV) projects in North America. The company operates more than 30 solar power projects in 19 states across the USA with a combined capacity of 262 MW and a development pipeline of 4 GW, increased by close to 2 GW during 2023. Investments continue to be made to expand the organisation, its greenfield development activities as well as acquisitions of late-stage development projects – in 2023, highlighted by the acquisition of a 450 MW portfolio of solar projects expected to commence construction in 2024. During the year, Adapture continued to scale its platforms, grow the organisation to a total of 60 FTEs and strengthen its development capabilities now with presence in three regions across the US.

• Copenhagen Infrastructure Partners (CIP) Energy Transition Fund I, focusing on investments in next generation renewables energy infrastructure, including carbon capture and energy storage technologies.

• Minority share of Monolith, a US-based developer of hydrogen and clean materials technologies, such as carbon black and ammonia.

• Decarbonization Partners Fund I, founded by BlackRock and Temasek, focusing on investments in late-stage venture capital and early-stage growth companies whose activities and technologies support the acceleration of decarbonisation and the transition to a net zero economy.

In 2023, KIRKBI increased its investment in Adapture Renewables Inc. to triple solar energy capacity

Read case story on Adapture Renewables

Adapture Renewables Inc., owned by KIRKBI, tripled its portfolio capacity in 2023 among others through the acquisition of three solar projects in the US with a combined capacity of 450 MW. Upon completion, the projects will provide clean energy to over 72,000 US homes annually.

Since KIRKBI’s initial investment in Adapture Renewables Inc. in 2019,

significant strides have been made to increase operational capacity and build a solid development pipeline. The acquisition of the three solar projects and a first battery project investment in 2023 are important milestones for Adapture Renewables Inc. that besides being financially attractive also supports KIRKBI’s overall ambition for the thematic investment area – to drive positive impact across sectors and contribute to a sustainable development.

Circular Plastics

Plastic plays an important role in society due to its qualities, but it is also a significant problem given it is typically based on fossil fuels emitting greenhouse gases and not yet subject to proper circular solutions. Consequently, plastic pollution has become a fundamental threat to our planet.

Through its investments in Circular Plastics, KIRKBI wishes to contribute to converting the plastics economy from the existing linear ‘take-make-waste’ model to a circular one, where plastics are sustainable and continue to be a valuable resource. The investment focus is continuously being refined to provide the highest impact per invested amount – overall the activities are guided by three investment theses: less plastic, better plastic, and better systems as investments within these three areas support the transition towards a world where plastic waste and CO2 emissions are reduced

By the end of 2023, the Circular Plastics portfolio comprised the following:

• Minority shareholder of Ambercycle – a US-based advanced recycling company building circularity in the fashion industry by regenerating end-of-life textiles into new materials for brands and manufacturers. In 2023, KIRKBI supported the company with an additional USD 5 million investment as part of a funding round, which will mainly be used to scale and mature Ambercycle’s technology before the planned construction of a larger scale commercial plant.

• Minority shareholder of APK – a Germanbased company that specialises in the production of plastic granulates using a wide variety of material flows to do so and an efficient recycling process called Newcycling®

Read

case story on APK AG investment

Investing to scale new recycling technology

Circular

1 2 3

In 2023, KIRKBI invested in the German company APK AG, alongside LyondellBasell, a global leader in the chemical industry and other co-investors. APK specialises in a unique solventbased recycling technology for low density polyethylene (LDPE).

APK aims to increase recycling of multi-layer flexible packaging materials, through its unique Newcycling® process. The technology separates the different polymers of multi-layer packaging materials leading to high-quality, pure recycled materials, which can then be used in new packaging materials.

Land Sustainability

Land Sustainability was introduced as an investment area in 2022 with the initial focus being primarily on forestry. Production forestry allows for continued carbon sequestration and storage. By using the wood, e.g. in building materials and furniture, the sequestered CO2 will be stored long-term and replace more CO2 heavy alternatives.

By the end of 2023, a total of approximately 1,600 ha of agriculture land has been acquired in Jutland, Denmark with the aim of establishing new forest. In the spring, the first 60 ha of new forest was planted, and KIRKBI expects a significant ramp-up over the coming years.

Forests are established in accordance with internal guidelines and policies on tree species, biodiversity measures, CO2-uptake, wildlife management etc. The aim is to establish high yielding, climate robust mixed forests. In addition to establishment of new forests, KIRKBI has invested in approximately 1,500 ha of existing forest in Denmark. Via active forest management, the aim is to gradually increase the climate effect, resilience and biodiversity of these areas.

Building Billund

Billund is the founding place of the LEGO Group and KIRKBI remains dedicated to the local community by actively supporting the development of the town.

The Billund City Vision – a plan initiated by KIRKBI, Realdania, and Billund Municipality in 2015 – provides a framework for supporting and further building Billund’s unique character as the Capital of Children. For KIRKBI, the vision also serves as a frame for how we can

support this development through Real Estate and other activities.

In 2023, KIRKBI continued its engagement in real estate projects in the local area of Billund. In August, Efterskolen PLAY (an independent residential school) in Grindsted officially opened its doors to new students. With support from KIRKBI and Ole Kirk’s Fond, the former commercial high school has been transformed to an innovative residential school, where a playful learning approach is rooted in every aspect of the school to enhance motivation and help the students excel their abilities. In May 2023, Billund Church was reinaugurated in connection to the celebration of the church’s 50th anniversary. The church has undergone a revitalisation to a more contemporary interior with support from KIRKBI.

In the midtown of Billund, KIRKBI commenced the construction of a new building containing apartments for employees of the LEGO Group. The building will be certified in both DNGB Gold and Nordic Eco Label. An expansion of the International School of Billund was also initiated in 2023, set to be finished in 2024.

Next to the International School of Billund, KIRKBI is developing a new neighborhood called Travbyen. In December 2023, the district plan for the area was approved by the municipality of Billund and construction will begin in the spring of 2024. Once fully developed, Travbyen will be a diverse neighborhood, where Billund’s citizens and visitors can meet and experience new forms of play, movement, and communities. The area will have up to 500 residential units, small local shops, a day care center and space for creative professions, sports, and movement. Travbyen has a total investment framework of DKK +2.3 billion.

People & Operations

In 2023, KIRKBI continued its focus on leadership and diversity, equity, and inclusion (DE&I).

KIRKBI employs approximately 200 specialised and experienced professionals in a diverse set of fields, all dedicated to supporting the overarching purpose of building a sustainable future for the family ownership of the LEGO® brand through generations.

As a family-owned company, KIRKBI is guided by the beliefs and values in the KIRKBI Fundamentals including the four promises, which define how play, people, partner, and planet are integral for succeeding with the mission to inspire and develop the builders of tomorrow.

The People Promise is based on a fundamental belief that organisational success rests on the continued growth, development and inclusion of all employees including leaders. As the most important asset KIRKBI’s employees are instrumental for delivering on the vision and mission. To ensure the right competencies there is a continous focus on the existing employees as well as the possibility of attracting new

competencies and diversity from the outsideseen from a broader perspective.

Guided by the promise, KIRKBI continued its focus on both leadership and diversity, equity, and inclusion (DE&I) in 2023.

Among others, KIRKBI reviewed its recruitment process, aiming to make it more inclusive and unbiased. Also, an equal pay analysis was conducted across the organisation, and KIRKBI is now reporting continuously on gender representation at all job levels.

Overall, KIRKBI has a balanced and close to equal male/female representation across the organisation. One exception of special interest is the investment areas, where female representation is generally lower. KIRKBI has high focus on introducing additional measures to attract and develop female talent in this area.

Strong leadership and people development

Every year, the employees’ motivation, satisfaction, and engagement are measured in a PULSE Survey. The responses are used to identify possible areas of improvement both at team and organisational level.

The PULSE survey shows a 2023 motivation and satisfaction score of 82, which is slightly lower than in 2022 but still higher than the national benchmark of 75 (GELx) and among the 5 % best performing companies of KIRKBI’s size.

The PULSE Survey reflects a high level of loyalty and satisfaction across the organisation with employees generally showing a high appreciation of the purpose and values as well as high job satiscfaction with high trust in their teams and immediate leader.

Lifelong learning and development should at any time be available to all employees in KIRKBI to maintain and further build their professional and personal competencies. In 2023, KIRKBI therefore continued the organisational work with Individual Development Plans and Performance Management Programmes to foster employee motivation and performance.

A diverse, equal, and inclusive workplace

At KIRKBI the work culture must be a safe space where employees feel a great sense of belonging and a high degree of inclusion. A diverse organisation and an inclusive

working environment represent a necessary base for this and an opportunity to succeed in the long term.

In 2023, KIRKBI continued its focus on the following three main areas:

• Engage employees & build inclusive culture

• Improve processes and systems

• Data insights and tracking

Pulse survey

100 as the highest score.

Response rate 2023: 98 %

In order to improve processes and systems to avoid structural inequity, a Structural Analysis of the organisation was conducted in 2023. The analysis was carried out by an external provider to detect embedded structural bias in people processes and policies.

Throughout 2023, teams have worked with the findings made in the Cultural Assessment of 2022. The result showed that KIRKBI’s employees generally experience a high level of inclusion and belonging across gender, age, and nationality. The team dialogues across the organisation have focused on how each employee can influence the ability to be inclusive of diversity in the teams.

Employee Advocacy Group (EAG)

Recognising that a change in cultural mindset has a greater chance of success when involving the organisation itself, KIRKBI established an Employee Advocacy Group (EAG) in 2021. The purpose of the EAG is to ensure that the process of exploring, learning, and adjusting our DE&I efforts is driven by employee engagement and ongoing involvement. This year, the EAG has helped initiate the Structural Analysis, and acted as a sounding board on processes and policies contributing with diverse input and

Health and Safety

KIRKBI’s working environment policy (EHS Policy) lays down the general framework for activities relating to the working environment and aims to ensure that all activities are planned and carried out in a healthy and safe working environment and in compliance with working productivity and legislation.

out view. The group has also investigated what initiatives are needed to get the vision statement on DE&I fully implemented providing input for initiatives for 2024 and long term.

Gender representation

Gender is only one aspect of diversity; however, it is a focal point to ensure equal opportunities for all. Looking at the total KIRKBI organisation there is a satisfactory and close to even gender distribution. However, looking at the gender balance at the Director+ level1) below Board of Directors, KIRKBI has a lower female representation. A Gender Balance Policy has been published with targets and initiatives in line with the legal recommendations, both on the required levels and on additional levels.

To facilitate a balanced gender representation at all levels, the specific targets set out in the table below were defined in 2022 and constitute input for a strong, continuous focus area in the coming years. To reach the gender targets, KIRKBI has in 2023 reviewed its people processes and policies in collaboration with its Employee Advocacy Group. The main objective has been on ensuring bias-free policies as well as inclusive recruitment, promotion, and reward processes. Also, a structural analysis has been carried out by an external partner to identify further areas of improvement to be implemented in 2024 and beyond.

In May 2023, Agnete Kirk Kristiansen, 4th generation owner, was elected board member of KIRKBI A/S. With her entry into the Board of Directors, KIRKBI has a 50/50 gender balance.

KIRKBI has a

balanced gender presentation at all levels

Acknowledging that gender is only one aspect of diversity, KIRKBI will continue the efforts to ensure a diverse workforce at all levels of the organisation, including a further strengthening of the internal diversity and inclusion agenda and understanding. KIRKBI wants to ensure that every employee feels valued and enabled to release his/her full potential.

Business ethics

The Code of Conduct for employees formalises KIRKBI’s policies related to human rights, labor, environment, and anti-corruption. The Code of Conduct is known by all employees and referred to by management. In the event of noncompliance with KIRKBI’s high standards for business ethics, it can be reported via the whistleblower line at KIRKBI.com.

KIRKBI assesses sustainability and business ethics risks on an ad hoc basis across own operations and other business activities. As a family-owned holding and investment company, the risk of human and labor rights breaches as well as corruption within our own

Targets for gender distribution

operations is assessed to be low and covered by the implementation of the Code of Conduct. In 2023, no corruption or violation of human rights were observed. Within the investment activities, risks related to all areas in the UN Global Compact are managed via our approach to responsible investing and ownership.

Data Ethics

The KIRKBI leadership team governs the data ethics. Our Data Ethics policy outlines the principles and what we believe is a lawful and ethical way of conducting day-today operation, and what employees and business partners can expect from KIRKBI when processing and procuring data.

Decisions related to individuals should always include human evaluation of data. To ensure this, KIRKBI promotes transparency towards the employees and business partners and has an approval process for the use of data.

KIRKBI only wishes to use data from trustworthy business partners and will, as part of our Code of Conduct, ensure that business

partners either have a data ethics policy or conduct their business in a way that is not detrimental to our Data Ethics Policy.

To ensure a high level of ethical behavior from KIRKBI’s employees when processing personal or non-identifiable data, all employees must complete e-learning training in GDPR and personal data compliance.

Moreover, the Data Ethics Policy is part of the mandatory onboarding procedure for new employees.

Play Day: Bringing all employees closer to the company vision

Play Day is an annual companywide event where all colleagues from the LEGO ® ecosystem around the world experience the power of Learning-through-Play together. Bringing all employees closer to the company vision as “a Global Force for Learning-throughPlay”, all employees play across all factories, offices and store locations. It is an important and highly anticipated tradition that reinforces our commitment to our Play Promise and the core values of fun, creativity, and imagination.

Read case story on the annual employee

Play Day

This year’s theme was the Mysteries of Play, where the day was spent playing detective and unlocking the personal meaning and benefits that play offers each LEGO employee. In addition to being fun, play also increases trust within the team, fosters an experimental mindset, and relieves stress.

Associated Foundations

New grants 2023

62

Grant level in 2023 1.3

As part of the commitment to give children better opportunities to reach their full potential, the LEGO ® owner family has entrusted the LEGO Foundation with 25 % ownership of the LEGO Group and it is primarily through this ownership that the foundation funds its activities.

When children play, they experiment, work things out and develop skills needed to thrive in a changing world. Play is an essential part of child development. But not every child gets the time and chance to play as they deserve.

To address this challenge, the LEGO Foundation works internationally to make Learning-through-Play a priority for every child through funding of research, backing of education initiatives, and support to partners, who can positively impact children’s lives.

Active grants

159

To programmes around the world helping children and families, including those in need and crises

2023 in the LEGO Foundation After a couple of years with extraordinary high grant levels in response to the global pandemic and last year’s celebration of the LEGO Group’s 90th anniversary, the LEGO Foundation returned to a grant level of DKK 1.3 billion in 2023. The grants continue to make a significant impact supporting children in being creative, engaged, lifelong learners who thrive in a constantly changing world by experiencing the benefits of Learning-Through-Play. In 2023, the LEGO Foundation also worked closely with partners to support humanitarian emergencies related to hurricane relief for children in Mexico, the devastating

earthquakes in Turkey and Syria as well as the wellbeing and education of refugee and displaced children in protracted crises across East Africa.

2023 was also a year of reflection for the LEGO Foundation with refocus of the organisation and development of a new strategy to better align with the core mission to inspire and develop the builders of tomorrow. As part of this, around 30 positions were made redundant. With the new strategy, the LEGO Foundation will focus on the core continuing its grantmaking where it can make the most significant impact on children’s opportunity to learn through play.

Providing safe playful learning to refugee children

800,000 children under the age of 12 live in refugee and host communities in Uganda, Tanzania and Ethiopia and often miss out on education.

The LEGO Foundation partners with International Rescue Committee, Plan International, War Child Holland, Innovations for Poverty Action and the Behavioral Insights Team to provide safe, quality and playful learning to refugee and host community children.

See case from Danish Centre for Teaching Environments

Partnership with Danish Centre for Teaching Environments

In 2020, a survey from EVA (the Danish Evaluation Institute) showed that only a quarter of Danish daycare centres was designed for quality play.

The LEGO Foundation partnered with Danish Centre for Teaching Environments, Denmark (DCUM) to change that by helping kindergartens build playful learning spaces that work for both children and teachers.

Teachers worked with ideas provided by children to create great places to learn and play.

DCUM developed the approach with ten kindergartens to create a toolkit for all daycare centres. Then expanded to six more. A self-evaluation showed that children were more joyful and engaged when teachers gave them the agency to co-create their classrooms.

DCUM is now sharing the toolkit in every municipality in Denmark.

Ole Kirk’s Fond is a charitable foundation established in 1964 in memory of the LEGO® founder to make the town of Billund an attractive place for LEGO employees and their families. The foundation still supports local communities in and around Billund, but also focuses on creating safe surroundings, wellbeing, and opportunities for children’s development throughout Denmark to improve their quality of life. The social area has a special place in Ole Kirk’s Fond today, but the foundation also supports cultural, religious, humanitarian, and educational causes.

Mary Elizabeth’s Hospital, celebrating a milestone

The development of the new children’s hospital progressed quickly and safely in 2023 with the completion of one new floor ready every six weeks making the shell house

ready for the topping-out ceremony in June. An important milestone for the project, celebrated by the craftsmen, contractors, hospital staff and partner representatives and with participation from HM Queen Mary as well as current and formerly hospitalised children and families. The façade cladding was mounted all the way around the building before the end of the year while designers in close collaboration with clinical staff continued to work hard on developing the interior of the new building.

Since 2016, Ole Kirk’s Fond together with the Capital Region of Denmark and Rigshospitalet has worked to create the new ground-breaking hospital with the ambition to set new standards for the treatment of patients and their families. The hospital is expected to welcome the first patients in 2026. Ole Kirk’s Fond contributes with approximately one third of the total budget – approx. DKK 800 million.

A childhood without domestic violence

In 2023, Ole Kirk’s Fond launched a new program called “A childhood without domestic violence”. The program will bring together a wide range of representatives from different welfare areas and disciplines with a common goal that fewer children grow up with violence. Children exposed to violence in their families is a cross-sectoral societal problem, thus part of the solution lies in increasing collaboration across disciplines and sectors such as the police, municipal administrations, health service, judiciary and more.

327m

To 280 small and large projects

Today an average of two to four children in every Danish classroom experience domestic violence. At the same time, only one in ten children exposed to violence is found and helped. Children who grow up with violence in their families experience great loneliness, have a greater risk of self-harm, abuse and crime, and a higher suicide rate. In close cross-sectorial collaboration, Ole Kirk’s Fond aims to contribute to a sustainable and lasting change with this new 10-year program.

Ole Kirk’s Fond grant level 2023 (DKK)

The QATO Foundation is a charitable foundation that works to improve animal welfare by supporting the creation of longterm and sustainable solutions to fight the problems that cause poor animal welfare paying special attention to the animals that do not thrive under human care.

Since 2012, the QATO Foundation has supported more than 100 projects worldwide spanning from Iceland in the North, to the African continent in the South; however, most projects have been based in the foundation’s home country of Denmark.

Improving welfare for School Horses

In 2023, the QATO Foundation chose to contribute to a new research project of the current living conditions and well-being of Danish school horses. The project is initiated by the Danish Equestrian Federation and Aarhus University, and with the support of the QATO Foundation, the project aims to provide knowledge on how to achieve the best

well-being for school horses. The project will focus on the overall living conditions of the horses, including their interaction with students and also look into giving the caretakers of the horses a better understanding of the animal’s behavior and needs.

The research project will run from 1 May 2023 to 31 December 2025.

QATO Foundation grants (m DKK)

Part 1

Sustainability

In KIRKBI sustainability is a foundational layer for all business activities – and defined by the KIRKBI Fundamentals which serve as our compass.

Sustainability

As a family-owned holding and investment company working to make a positive difference for future generations, sustainability is at the very core of KIRKBI.

Guided by the four promises, KIRKBI is committed to running its business in a sustainable manner and doing its part to make a positive impact on the planet.

With the recent generational handover from the 3rd to the 4th generation of the owner family, KIRKBI’s commitment to sustainability was further elevated as the owner family articulated a long-term vision to guide their activities over coming years. A key ambition in this long-term vision is addressing the global climate challenges stemming from carbon emissions and plastic waste.

The ambition to drive climate impact and deliver on the Planet Promise will shape and fuel KIRKBIs sustainability efforts in the years to come. At the same time, KIRKBI will remain committed to driving progress on activities relating to the Partner and People promises.

To guide these efforts and ensure continuous improvement, KIRKBI sets sustainability targets on an annual basis. For 2023, these included ‘evergreen’ targets, such as employee engagement, diversity, CO2 emissions and sustainable building certification, as well as new targets focused on improving CO2 data coverage in KIRKBI’s holdings and committing to high-impact climate solutions.

Read case story on reducing emissions

Armacell commits to SBTi

In 2023, Armacell, a leading provider of advanced insulation and engineered foams, committed to the Science Based Targets initiative (SBTi) to set near-term, companywide emissions targets that will put them on a path with the goals of the Paris agreement. Armacell is the fourth company in KIRKBI’s Longterm Equity portfolio to commit to

setting SBTi-validated targets. Having a science-based reduction target is a key sustainability topic of KIRKBI’s active ownership model. End of 2023, 40 % of KIRKBI Scope 3 emissions from equities, bonds, private equity and debt portfolios came from companies setting SBTi validated targets, closing the gap to meet KIRKBI’s 2025 target of a 45 % coverage.

Performance and targets

2023 targets

People & Play Maintain PULSE score 5 points above benchmark

Maintain gender balance of 45 %/55 % in organisation

Reach gender balance of 45 %/55 % at Director+ level by 2027

Maintain gender balance of 45 %/55 % among people leaders

Partner Engage all General Partners (private equity) on ESG and Climate management

Planet Reduce CO2e emissions in Own Operations by 5 %*

Reduce CO2e emissions in Real Estate by 5 % in a like-for-like portfolio*

Increase portfolio SBT coverage by 5p.p.*

Achieved 2023 Performance highlights

• PULSE score decreased by 2, but is well above benchmark, at 82 %

• Gender balance in organisation remained within target

• Gender balance at D+ decreased by 3 percentage points to 28 %

• Gender balance among people leaders decreased by 1 percentage point to 44 %

• KIRKBI is committed to the ESG Data Convergence Initiative and has encouraged our preferred GPs to do the same. We have seen improvements in both ESG and climate reporting

• A reduction in the use of company-owned aircrafts and improved data on employee commuting contributed to a 19 % reduction compared to 2022

• Increases both in the purchase of green energy and in green lease coverage lowered emissions by 40 % compared to 2022 in a like-for-like portfolio

• 23 percentage point increase in cat. 15 emissions covered by verified SBTs or committed to setting SBTs has been driven by a mix of SBTi commitments, including that of Armacell, and changes to the portfolio

2024 targets

• Maintain PULSE score for employee motivation and satisfaction within top 5 % of benchmark

• Maintain gender balance of 45 %/55 % in organisation

• Increase gender balance by 4 percentage points compared to 2023

• Obtain gender balance of 45 %/55 % among people leaders

• Increase CO2e data coverage of holding and investment activities by 7 percentage points compared to 2023

• Reduce CO2e emissions from Own Operations by 5 % compared to 2023

• Reduce CO2e emissions from Real Estate by 5 % in a like-for-like portfolio compared to 2023

• Maintain portfolio SBT coverage compared to 2023

Certify 5 properties to sustainable building standards

* Compared to 2022.

• 2 certifications finalised, with additional 10 awaiting approval; delay due to increased processing times at certification bodies

• Certify 3 properties to sustainable building standards

Climate Inventory

KIRKBI has assessed climate change to be a central sustainability topic that affects and is affected by all Business Areas.

KIRKBI’s negative impact on climate change is due to the emissions generated by the use of non-renewable energy in both our own operations and our holding and investment activities. While KIRKBI has always worked to manage its negative impact on climate, efforts have accelerated following KIRKBI’s first assured Carbon Inventory in 2019 and the ambitious science-based carbon reduction target set in 2022. Last year, KIRKBI introduced a link to its carbon reduction goals to the compensation of all employees with bonus schemes. This ensures that all employees are incentivised and rewarded for driving a more sustainable business.

Given the development in the carbon inventory, KIRKBI will use 2024 to recalculate its baseline and to develop new ambitious carbon reduction targets to ensure that the company is on the long-term path to net zero emissions.

Performance in 2023

KIRKBI’s carbon footprint is calculated every year. As illustrated in the table on page 45,

there was a 22 % decrease in emissions from KIRKBI’s own operations, largely driven by a continuing reduction in the use of companyowned aircrafts, and the commitment to purchase sustainable aviation fuel, which can lower emissions by up to 80 %, compared to traditional jet fuel. In 2023, KIRKBI was able to purchase a volume of SAF equivalent to approximately 24 % of total fuel use. These two initiatives have driven the 60 % reduction in scope 1 and 2 emissions from the 2019 baseline, which means that KIRKBI has met this part of its Science Based Target eight years ahead of schedule.

Emissions from the KIRKBI Real Estate portfolio continued the trend of recent years and were reduced by an additional ~2300t throughout 2023. While ~1,000t of these savings were from divestments, the remaining savings were due to the purchase of greener options for energy, such as renewable electricity and biogas, as well as an increase in green leases, which require tenants to purchase green energy options and to share their use data.

The early achievement of our Science Based Target to reduce absolute scope 3 emissions by 55 % by 2032 is driven by the development

of Real Estate emissions over time. This development is due in part to actual reductions, as described, but also to a significant improvement in data quality over time.

For the investment portfolio, KIRKBI has committed to a target defining that 45 % of listed equities, bonds, private equity and debt portfolio set SBTi validated targets by 2025. Since setting this short-term target, KIRKBI has systematically engaged its investments to improve carbon emission disclosure and management, including setting science-based reduction targets. At the end of 2023, 40 % of emissions

from investments and holdings had SBTiverified reduction targets. A further 22 % of emissions come from companies that have committed to set a science-based target over the next two years, which would bring the portfolio coverage to 62 %. The increase in portfolio coverage in 2023 is attributable to a combination of companies starting to work with science-based targets and changes to portfolio allocation, including exiting high-emitting investments. No investment has been exited due to carbon management alone, but progress on climate management does impact KIRKBI’s view of an investment.

KIRKBI Group CO2e emissions 2023

Own operations

3,138 tCO2e

-19 % from 2022

-58 % from 2019

Holding and investment activities

390,153 tCO2e

-17 % from 2022

-28 % from 2019

1) 2022 emissions updated following improved data. KIRKBI’s greenhouse gas (GHG) data is prepared in accordance with the principles set out in note 10.3 to the financial statements.

2) Subtotals may not add up exactly due to rounding of the underlying dataset.

Progress towards Science Based Targets

3

Ensure that 45 % of KIRKBI Scope 3 emissions from equities, bonds, private equity and debt portfolios come from companies setting SBTi validated targets by 2025

Read case about Durable Carbon Dioxide Removals

Durable Carbon Dioxide Removals

To complement its emissions reductions, KIRKBI is committed to supporting and catalysing impactful climate solutions that have the potential to permanently remove and sequester carbon dioxide at scale.

End of 2023, KIRKBI signed a longterm agreement with Climeworks to purchase high-quality carbon removal services. Climeworks is a pioneer in the carbon dioxide removal industry, successfully deploying its Direct Air Capture (DAC) technology to safely remove CO 2 from the air and performantly store it underground, for example via the Carbfix method. Climeworks operates the world’s largest commercial DAC plant in Iceland.

KIRKBI will continue to explore and contribute to high-integrity climate solutions, both nature and engineered, to play our part in tackling climate change.

Part 1

Financial Review 2023

KIRKBI’s financial strategy is to create long-term value to support the purpose of building a sustainable future for the family ownership of the LEGO® brand through generations.

2023 Financial Review

Long-term value creation

KIRKBI’s financial strategy is to create long-term value to support the company’s purpose of building a sustainable future for the ownership of the LEGO® brand through generations. The financial performance is driven by the activities related to the LEGO Idea and the return from Investment Activities.

At the end of 2023, KIRKBI’s total assets amounted to DKK 163 billion which is an increase of 59 % over the five-year period from 2018. In the same period, total equity has grown 55 % from DKK 88 billion to DKK 136 billion. During 2023, total assets and

equity were reduced by DKK 11 billion in share buybacks related to the final handover from the 3rd to 4th generation of the Kirk Kristiansen family and to Sofie Kirk Kristiansen’s desire for privately investing in various projects among others within nature conservation.

Below is set out a graph illustrating the development of total assets and equity over the past five years.

Solid financial performance in 2023

The financial year 2023 showed a profit before tax of DKK 16.4 billion (2022: DKK 13.6 billion) which comprised an;

• operating profit from LEGO Brand and Related Activities of DKK 13.8 billion (2022: DKK 18.4 billion), negatively impacted by goodwill and asset write-downs in BrainPOP, Merlin and Epic Games, and

• return from Investment Activities of DKK 3.7 billion (2022: negative DKK -4.1 billion).

The after tax profit for the year was at DKK 11.3 billion slightly higher than in 2022 at DKK 10.7 billion. The tax expense for 2023 of DKK 5.1 billion was 75 % higher than in 2022, impacted by the non-deductible asset write-downs as well as a higher tax percentage in the LEGO Group (23.2 % vs 22.0 % in 2022). In addition to KIRKBI’s corporate tax expense, the owner

family has in 2023 paid around DKK 6 billion in Danish dividend and generational taxes related to the share buybacks effectuated during 2023 in connection with the generational handover in the owner family from the 3rd to the 4th generation.

LEGO Brand and Related Activities

The key contributor to the financial result of KIRKBI continues to be the LEGO Group which overall delivered a solid performance in 2023. In a challenging environment with a decline in the global toy market of 7 %, the LEGO Group delivered a strong performance with growth in consumer sales of 4 %. This outperformance of the toy industry led to a significant increase in market share.

Total assets and Equity (m DKK)

Revenue for the year increased by 2 % to DKK 66 billion while operating profit of DKK 17 billion was 5 % lower than in 2022, impacted by continued strategic investments to deliver current and long-term sustainable growth. This included areas such as brand awareness, product innovation, retail platforms, production capacity, digitalisation and sustainability.

Merlin reported a growth in revenue of 6 % driven by an increase in number of visitors of 12 %. The underlying result for the year was slightly negative, impacted by higher interest costs following the increase in market interest rates. KIRKBI’s share of net result was

a loss of DKK 0.9 billion (2022: profit of DKK 0.5 billion), impacted by write-down of assets in the LEGOLAND® Parks in New York and Korea as well as costs incurred as part of Merlin’s refinancing of part of their debt.

BrainPOP’s first full financial year after KIRKBI’s acquisition in October 2022 showed a revenue growth of 2 % and an operating profit of DKK 0.2 billion. While the profitability overall was in line with expectations the top line growth was significantly lower than assumed in the business case, negatively impacted by a challenged market for education and playful learning products to school districts in the US among others due to reductions in public funding. Due to this structural change in the US school market with expected lower growth rates and need for increased investments in digital technologies, KIRKBI has at year-end 2023 written-down goodwill and part of the tax assets related to the acquisition, in total a write-down of DKK 2.6 billion.

Royalties from the LEGO® and LEGOLAND® trademarks increased by 1 % to DKK 2.5 billion (2022: DKK 2.5 billion). Other LEGO brand related activities comprising costs and investments to protect, develop, and leverage the full potential of the LEGO brand, including investments within digital play, costs centered around the global LEGO brand campaign ‘Rebuild the World’ and

costs for IPR and legal compliance showed a total expense of DKK 2.3 billion in line with 2022.

Investment Activities

The investment Activities are separated into a Core Capital and a Thematic Capital portfolio.

The Core Capital portfolio delivered a return of DKK 3.8 billion equal to 4.7 %. The financial return is overall considered satisfactory, with especially the Fixed Income, Quoted Equity and the Real Estate portfolios showing relatively strong returns while the Long-term Equity and the Private Equity portfolios showed performance below expectations.

For the Thematic Capital portfolio, the 2023 return was negative with DKK 0.1 billion equal to -1 %. The highlights for 2023 were Adapture Renewables Inc.’s commitment to acquire a 450 MW late-stage development solar project in the US, investment into APK and Decarbonization Partners within Circular Plast and continued acquisitions of land within Land Sustainability, now totalling a portfolio of approximately 1,600 ha of agriculture land.

Support Activities including donations and sponsorships

Costs to operate KIRKBI’s support functions including donations and sponsorships totalled DKK 0.8 billion in 2023 (2022: DKK 0.7 billion), of

which donations and sponsorships amounted to DKK 0.2 billion comprising donations to, among others, K2 Fonden af 2023, Ole Kirk’s Fond, Qato Foundation, Danmarks Idrætsforbund (DIF) and Billund Church.

Overall net result for 2023 lower than expectations

The net result for 2023 of DKK 11.3 billion was lower than the expectations disclosed in the annual report for 2022, primarily due to negative impact from the one-off writedowns of goodwill and assets in BrainPOP and Merlin. Excluding these one-off items, the underlying financial performance is considered satisfactory.

As illustrated in the five-year overview below, the underlying profitability for the LEGO Brand and Related Activities continues to be at a high and stable level. For the Investment Activities, returns are by nature relative volatile dependent on the fluctuations in the financial markets. It should be noted that the vast majority of the contribution to net profit from the Investment Activities comprises unrealised value adjustments of the portfolio with no impact on cash flows.

Cash flows impacted by significant investments in the LEGO Group

For KIRKBI to deliver on its strategy it is essential with strong and stable cash inflows, the majority of which is coming from the LEGO Group. For

LEGO Brand Group and Related Activities and Investment Activities

2023, the cash inflow after tax from operating activities to KIRKBI (after capex investments and lease liabilities in the LEGO Group) amounted to DKK 7.3 billion (2022: DKK 11.7 billion). The lower cash inflows are in line with expectations given the significant increase in capex investments in the LEGO Group to increase production capacity.

Within the Investment Activities, cash inflows from interest income, dividends and paybacks amounted to DKK 2.1 billion compared to DKK 2.4 billion in 2022. In 2023, KIRKBI paid taxes of DKK 4.8 billion compared to DKK 2.9 billion in 2022.

Over the last five years, the cash inflows to KIRKBI have been relative stable at a high level, however with a slower pace over the last years driven by the LEGO Group’s significant investments in capacity.

Risks

The KIRKBI Group’s risks primarily relate to the development within;

• the global toy markets (the LEGO Group)

• the market for location-based entertainment (Merlin)

• the US education and learning market (BrainPOP), and

• the financial markets (Investment activities).

Please refer to note 4.1 in the consolidated financial statements for a description of the financial risks as well as an overall risk assessment.

Events after the reporting date

No events have occurred after the balance sheet date that would have a significant influence on the annual report for 2023.

Outlook 2024

Expectations for the KIRKBI Group’s financial performance for 2024 are subject to uncertainties related to the global economy impacting the Investment Activities. The

overall expectations set out below are therefore to a large extent subject to uncertainties and risks which are beyond KIRKBI’s control and may cause the actual development and results to differ materially from expectations.

LEGO Brand and Related Activities

KIRKBI expects a result before tax from LEGO Brand and Related Activities above 2023.

The LEGO Group expects single-digit revenue growth in 2024, ahead of the global toy market through developing an appealing portfolio to builders of all ages and improving brand and shopping experiences. Net profit is expected to decline slightly due to increased spending on strategic initiatives such as sustainability, retail platforms and digitalisation.

Merlin expects growth in 2024 in both number of visitors, revenue and underlying earnings. Further, the net result is expected to improve supported by positive effect on interest costs from the refinancing finalised in the beginning of 2024.

BrainPOP expects single-digit revenue growth in 2024 while net result is expected to decline due to investments to ensure both short and long-term growth.

Royalties are expected to increase in line with expected growth of revenue in the

LEGO Group and in the LEGOLAND® Parks, offset by continued investments in brand protection and development.

Investment Activities

KIRKBI is a long-term investor and a one-year view on the Investment Activities is highly dependent on the development in the financial markets. A normalised return from Investment Activities would be an annual return around 5 % of the investment portfolio.

Cash flows

KIRKBI will have continued high focus on cash flows and expects the 2024 level to be in line with or slightly above 2023. As in 2023, the LEGO Group is expected to continue investing in production capacity.

Part 1 Governance

KIRKBI is the Kirk Kristiansen family’s private holding and investment company. Our way of working is anchored in a strong set of values.

Board of Directors

Thomas Kirk Kristiansen

Chair and member since 2007

Shareholder of KIRKBI A/S and most active owner in the fourth generation of the owner family

Chair of the Board of LEGO A/S, The LEGO Foundation, and Koldingvej 2, Billund A/S

Board member in one fully-owned subsidiary of KIRKBI A/S

Executive Manager of Kirk og Kirk Holding ApS and management roles in four subsidiaries

Michael Halbye

Deputy Chair and member of the Board since 2020

Chair of the Board of Ludvig & Co., Generation.org, and K2 Fonden af 2023

Member of the Board of the Mary Foundation, 7N, Maternity Foundation, One Life Foundation, and Penda Paper

Agnete Kirk Kristiansen

Member of the Board since 2023

Shareholder of KIRKBI A/S and representing the fourth generation of the owner family.

Deputy Chair of the Board of the LEGO Foundation.

Board member in one fully-owned subsidiary of KIRKBI A/S

Member of the Advisory Board of Ruca

Member of the Advisory Board of Invest in Play

Executive Manager of Kirk83 Holding Aps

Jeppe Christiansen Member of the Board since 2008

CEO of Maj Invest Holding A/S

Chair of the Board of Haldor Topsøe A/S, Emlika Holding ApS, and JEKC Holding ApS

Member of the Board of Novo Holdings A/S, Pluto Naturfonden, Randers Regnskov, BellaBeat Inc. (USA) and USTC

Member of the executive management of Maj Invest Equity A/S

Malou Aamund

Member of the Board since 2019

Member of the Board of LEGO Foundation, DSV A/S, WS Audiology A/S, and Matas A/S.

Chairperson, Thinkproject GmbH

Connie Hedegaard

Member of the Board since 20022

Chair of the Board of the EU Commission’s Mission Board on Adaptation to Climate Change, KR Foundation, CONCITO, OECD’s Round table for Sustainable Development, and Grønnegårdsteatret

Member of the Board of BBVA, Danfoss, the Villum Foundation, and European Climate Foundation

Executive Leadership Team

Employed in KIRKBI

since 2010

Born: 1965

Education: MSc in Accounting and Audit. State Authorised Public Accountant

Other management positions

Deputy Chair of the Board of Directors of LEGO A/S, Member of the Board of Directors of ISS A/S, Merlin Entertainments Ltd. and 4 affiliated companies, Ole Kirk’s Fond, ATTA Fonden, Koldingvej 2 Billund A/S, K2 Fonden af 2023, and six fully owned subsidiaries of KIRKBI A/S. Executive position in four subsidiaries of KIRKBI A/S

Employed in KIRKBI since 2014

Born: 1975

Education: Master of Law, Aarhus University, 2003. Attorney-at-law

Employed in KIRKBI since 2021

Born: 1970

Education: MSc in Accounting and Audit. State Authorised Public Accountant

Other management positions

Chair of the Board of Directors of Adapture Renewables inc. and three fully-owned subsidiaries of KIRKBI A/S

Member of the Board of Directors of KK-Group A/S and BrainPOP Group, Inc.

Employed in KIRKBI since 2017

Born: 1968

Education: Ph.D. in Economics & Business

Other management positions Chair of the Board of Directors of BrainPOP Group, Inc.

Member of the Board of Directors of the LEGO Foundation, the LEGO Group, Merlin Entertainments Ltd., Starbucks Coffee Company, and the Executive School, IMD. Partner/Executive Advisor, Innovation Endeavours Ventures

Employed in KIRKBI since 2010

Born: 1973

Education: MSc in Finance and Accounting, Aarhus School of Business, 1998

Other management positions

Member of the Board of Falck A/S, Adapture Renewables Inc., Topsøe Holding A/S, Hessel A/S, and one fully-owned subsidiary of KIRKBI A/S

Søren Thorup Sørensen Chief Executive Officer

Irene Dahl-Hansen Head of HR and Family Office

Jesper Ridder Olsen Chief Financial Officer

Jørgen Vig Knudstorp Head of Brand and Business Development

Thomas Lau Schleicher Chief Investment Officer

Part 2

Financial Statements

Financial Statements

Part 2

Financial Statements

61 Consolidated Income Statement

61 Consolidated Statement of Comprehensive Income

62 Cash Flow Statement 1 January – 31 December

64 Balance Sheet at 31 December

65 Statement of Changes in Equity

Part 3

Notes – the KIRKBI Group

67 Contents

Part 4

Parent Company

94 Contents

Part 5

Additional Information

103 Management’s Statement

104 Independent Auditor’s Report

107 The Independent Auditor’s Assurance Report

Consolidated Income Statement Consolidated Statement of Comprehensive Income

Cash Flow Statement 1 January – 31 December

Accounting policies

The consolidated cash flow statement shows cash flows for the year broken down by operating, investing and financing activities and cash and bank deposits at the beginning of the year and at year-end.

Cash flows from operating activities are calculated indirectly as profit before tax adjusted for non-cash items, income taxes paid and changes in working capital.

Cash flows from investing activities comprise payments relating to

acquisitions and disposals of securities, intangible assets, property, plant and equipment, fixtures and fittings as well as fixed asset investments.

Cash flows from financing activities comprise proceeds from borrowings, repayment of interest-bearing debt, dividend paid to shareholders and non-controlling interests as well as payments in connection with share buybacks.

Cash and cash equivalents comprise cash and bank deposits.

Cash Flow model in line with KIRKBI’s business model

The cash flow model below shows the cash flow in line with KIRKBI’s business model presented on page 12-13, split by cash inflow from KIRKBI’s main

actitivites before and after tax and cash outflows to Investment Activities, Support Activities and Charity as well as distributions.

Balance Sheet at 31 December

Balance Sheet at 31 December

Statement of Changes in Equity

In March 2023, KIRKBI A/S acquired own shares from Kjeld Kirk Kristiansen which subsequently were donated to K2 Fonden af 2023 in connection with the establishment of the foundation and the generational handover in the owner family from the 3rd to the 4th generation.

In June 2023, KIRKBI acquired shares from Sofie Kirk Kristiansen, which the Board of Directors subsequently decided to cancel.

Total acquisition of own shares (share buybacks) amounted to DKK 11,135 million (2022: DKK 0 million).

Notes – the KIRKBI Group

Notes – The KIRKBI Group

Section

Section

68

Section 2

69

69

70

72

Section

Section

Section 11 – Group Structure

92 11.1.

Part 4

Parent Company

94 Contents

Part 5

Additional Information

103 Management’s Statement

104 Independent Auditor’s Report

107

Section

Section

Section 1 – Allocation of assets

1.1. Allocation of KIRKBI’s assets

KIRKBI is a private holding and investment company founded to build a sustainable future for the family ownership of the LEGO® brand through generations. The activities are focused on three fundamental objectives: LEGO Brand and Related Activities, Investment Activities and Support Activities.

Below is set out a split of KIRKBI’s assets of DKK 163 billion (2022: DKK 166 billion) into LEGO Brand and Related Activities, Investment Activities and Other assets.

Section 2 – LEGO Brand and Related Activities

2.1. Definition of LEGO Brand and Related Activities

LEGO Brand and Related Activities are defined as activities related to the LEGO® brand, which inlude ownership of the LEGO Group and Merlin Entertainments Ltd. (owner of the LEGOLAND® Parks and LEGOLAND®

Discovery Centres) as well as trademark royalties. Further investments in LEGO Brand and Related Activities include activities within education, learning and digital play through ownership of BrainPOP LLC and investment in Epic Games.

2.2. The LEGO Group

(m DKK)

Reconciliation to the Annual Report for the LEGO Group:

2023 2022

Accounting policies

Profit before tax from LEGO A/S and BrainPOP LLC, companies where the KIRKBI Group has controlling influence, is fully consolidated in the income statement and included in the line items LEGO Group and BrainPOP, respectively.

Merlin Entertainments Ltd., in which KIRKBI owns 47.5 %, is accounted for using the equity method. Changes to the carrying amount of the investment are in the

income statement included in the line item from Merlin Entertainments together with income from assets leased to Merlin Entertainments.

The investment in Epic Games, a company where KIRKBI has a minority shareholding is valued at fair value through the income statement in the line item Trademark, business development and related costs.

Profit before income tax presented in the line item LEGO Group 17,059 17,676 Tax on profit for the year included in Tax on profit for the year (3,950) (3,894) Profit for the year 13,109 13,782

Included as non-controlling interests, 25 % (3,277) (3,446)

Accounting policies

The KIRKBI Group controls, through its 75 % ownership of LEGO A/S, the LEGO Group. Hence the LEGO Group is fully consolidated into the income statement and balance sheet of the KIRKBI Group.

The non-controlling share of the LEGO Group (owned by the LEGO Foundation) is presented as non-controlling interest in the income statement and as noncontrolling interests under equity. See note 9.2 for details.

2.3. Merlin Entertainments

Investments in associates under LEGO Brand and Related Activities include the ownership of Merlin Entertainments Ltd., which is structured through the holding company Motion JVCO Ltd. The KIRKBI Group owns

Operating profit from Merlin activities

47.5 % of Merlin Entertainments and hence the investment is classified as an investment in associates. Merlin Entertainments Ltd. is located in the UK using GBP as its functional currency.

The carrying amount of Merlin Entertainments Ltd. / Motion JVCO Ltd. can be specified as follows:

Investment in associates

Total value of assets related to Merlin activities

In addition to the 47.5 % shareholding in Merlin Entertainments Ltd., KIRKBI has other assets related to Merlin Entertainments Ltd. in the

balance sheet including bonds and term-loans issued by Merlin Entertainments Ltd. and assets leased to Merlin Entertainments Ltd.

Total value of assets related to Merlin activities (m DKK)

Accounting policies

Merlin Entertainments Ltd. is accounted for using the equity method. Under the equity method, investments in associates are initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the

share of the net assets of the associate since the acquisition date.

Financial

information of Merlin Entertainments Ltd./Motion JVCO

2.4. BrainPOP

net result

On 7 October 2022, the KIRKBI Group acquired 100 % of the shares in BrainPOP LLC, a US-based pioneer in developing online educational learning solutions for use in schools and at home. The acquisition is an investment within LEGO Brand and Related Activities in the educational space as Playful Learning.

Total enterprise value of DKK 7.0 billion consisted of a total purchase price of DKK 6.8 billion on a cash and debt-free basis and assumed purchase price liabilities of DKK 0.2 billion. The purchase price mainly related to intangible assets such as the BrainPOP brand, product technology, customer list and goodwill. For further details on the impairment of goodwill in 2023 please refer to note 6.1.

Section 3 – Investment Activities

3.1. Definition of Investment Activities

The KIRKBI Group’s Investment Activities are divided into Core Capital and Thematic Capital investments.

Core Capital

Investment Activities

Investing to ensure a sound financial foundation for the owner family’s activities through generations.

Focused on long-term risk adjusted returns.

Thematic Capital

Investing to ensure a financial return and significant contribution to a sustainable development in the world inspired by the owner family’s interests.

Focused on theme-based investing.

3.2. Core Capital

Through Core Capital, KIRKBI seeks to obtain attractive risk-adjusted returns and capital preservation for the long term, while ensuring high environmental, social and governmental standards.

The core capital portfolio has been designated as financial assets at fair value through the income statement as the portfolio is managed and evaluated on a fair value basis in accordance with the KIRKBI Group’s investment strategy.

70,000

60,000

50,000

40,000

30,000

20,000

10,000

Fixed Income

Opportunities Debt Equity Hybrids Real Estate Equity Fixed Income Opportunities 0

Government and mortgage bonds

Coporate debt

2023 (%)

Observable market prices

Valuation method for Core Capital Accounting policies

2022 (%)

Oberservable market prices

Estimates and judgements

Please refer to note 9.4 for more information on fair value estimates and fair value hierarchies.

Significant accounting estimates and judgements

Core capital investments are valued at fair value. By nature, uncertainties exist regarding fair value assessment of investments not based on observable market data.

Asset class

Listed equity shareholdings

Consequently, preparation of the financial statements requires the application of certain estimates and judgements.

The material area of estimates and/or judgements is set out below:

Valuation method

Observable market data

Private equity Reported Net Asset Value by the respective Private Equity funds in line with IPEV (International Private Equity and Venture capital) valuation guidelines

Unquoted Long-term equity shareholdings

Investment properties

Core Capital investments are valued at fair value through the income statement. Fair value is the price that would be received by selling an asset between market participants at the measurement date.

Associates and other financial assets that fall into the category of core capital investments are recognised in accordance with IFRS 9 at fair value through the income statement.

Investments are initially recognised at cost and subsequently adjusted to fair value. Please refer to note 11 for a list of

associates valued at fair value through the income statement.

Investments in real estate are measured at fair value through the income statement according to IAS 40. Initially real estate investments are measured at cost and subsequently adjusted to fair value.

Gains or losses arising from changes in the fair values of investment properties are included in the income statement in the period in which they arise.

Trading multiples for comparable companies in combination with discounted cash flows analysis

A return based model based on cash flow and a yield. Cash flow estimates are based on a budgeted cash flow per property with a normalised cost for maintenance. Larger investments and improvement are handled separately. Investment properties are mainly within office buildings and there has been a minimal vacancy in the financial year.

The properties are located in Copenhagen, London, Munich, Hamburg and Switzerland and the yield applied is between 4.25 and 5.50

Bonds and corporate debt Observable market data

Management reviews and assesses the value of the individual investments on an ongoing basis. For more information

on significant accounting estimates and judgements please refer to note 10.2.

3.3. Thematic Capital

Through Thematic Capital, KIRKBI seeks to contribute to a sustainable development in the

world by investing in impact focused themes inspired by the owner family’s interests.

Management reviews and assesses the value of the individual investments on an ongoing basis. For more information on significant

accounting estimates and judgements by management please refer to note 10.2.

Accounting policies and significant estimates and judgements

The Thematic Capital investments are valued either at cost less depreciation or fair value through the income statement depending on the nature of the investment. For controlled entities and joint operations the underlying assets are

valued at cost less depreciation through full or partial consolidation in the income statement and balance sheet.

The offshore windfarm Burbo Extension Ltd. is classified as joint operations, as there is a contractual arrangement that secures the parties control over the output from the joint arrangement.

Please refer to note 9.4 for more information on fair value estimates and fair value hierarchies.

Section 4 – Risk management

4.1. Financial risks

The financial risks of the KIRKBI Group are set out in the overall risk management guidelines approved by the Board of Directors. The guidelines include the KIRKBI Group’s treasury and investment policy including definition of appropriate risk limits and controls to monitor the risks and ensure adherence to limits.

The overall purpose of the core capital investment portfolio is to create long-term economical value based on the KIRKBI Fundamentals, i.e. to:

• Protect the investment portfolio to ensure a sustainable future for the family ownership of the LEGO Brand

• Deliver a stable growth of capital with an attractive risk-adjusted return

• Avoid negative spill-over effects on the LEGO Brand and the LEGOLAND brand

• Contribute to a sustainable development in the world

• Ensure high ethical standard in investments and engagements

To reflect the above, the investment policy includes guidelines and ranges for which investments are considered to be eligible investments and which investment parameters are to be applied such as limits on issuer, duration, credit rating, country, or economic sector.

The guidelines are reviewed regularly to reflect changes in market conditions, the KIRKBI Group’s activities and financial

position. A separate and independent risk management function reviews managers’ compliance with the mandates and the adequacy of the mandates.

Investment approach and asset allocation

The KIRKBI Group’s activities consist of holdings in LEGO Brand and Related Activities such as the LEGO Group, Merlin Entertainments Ltd., BrainPOP Inc. and Epic Games as well as investments within the areas of equities, real estate, fixed income and thematic investment areas such as energi transition, circular plastic and land sustainability.

The overall purpose implies a portfolio strategy based on firm and conservative investment principles and beliefs. Combined with the financial strength of KIRKBI and continued success of the LEGO Group, it allows KIRKBI to have an asset allocation focused on long-term ownership.

Financial risk management

For the KIRKBI Group, the concept of risk is divided into two areas:

• Short-term risk of temporary loss of capital – i.e. quotation risk

• Long-term risk of permanent loss of capital – i.e. capital loss risk

As a long-term investor, the most important risk to avoid is the permanent loss of capital.

Risk assesment

Below is set out an overall risk assesment related to business risks, credit risks and risks related to interest and foreign exchange rates.

Type Risk level Description

Consumer demand in the LEGO Group

Commodity risk in the LEGO Group

Number of visitors in Merlin Entertainments

Development in global equity markets

Risk of bankrupties at customers

Risk of bankrupties at counterparts

Risk for loss due to lack of liquidity

Foreign exchange exposure

Risk levels (yearly financial impact on the income statement):

Low DKK 0 m - DKK 1,000 m

Moderate DKK 1,000 m - DKK 2,000 m

High above DKK 2,000 m

Interest rate exposure

High The impact of consumer demand in the LEGO Group has a significant effect on the profitability and cash flows in the KIRKBI Group.

Low The LEGO Group is exposed to commodity risks related to production and distribution, where the largest exposure relates to energy costs.

Moderate With a significant ownership share in Merlin Entertainments, the KIRKBI Group is impacted by the number of visitors in the attractions of Merlin.

High The KIRKBI Group has significant equity exposure and the financial result is impacted by the development in the global equity markets.

Low The KIRKBI Group has no significant credit risk concentration, but has some single significant trade debtors.

Low Financial instruments and engagement with insurance companies are entered into with counterparts with investment grade level ratings.

Low The KIRKBI Group has a significant portion of quoted bonds and equities that are relative liquid in a liquidity stress situation.

High The foreign exchange risk for the KIRKBI Group is mostly related to net inflows in the LEGO Group and investments denominated in foreign currencies. The highest risk is related to USD, where the KIRKBI Group has assets measured at fair value of around DKK 29 billion. The exchange rate risk for other currencies than USD is considered low.

The LEGO Group hedges a proportion of forecasted transactions and balance sheet items for a period of up to 12 month, mainly USD. Total contract amounts for which hedge accounting applies is DKK 12 billion with a net positive fair value of DKK 0.1 billion.

Low The KIRKBI Group’s interest rate risk relates mainly to the portfolio of core fixed income and corporate debt instruments. With the current composition of the portfolio, the KIRKBI Group’s interest rate risk is considered low.

4.2. Contingent liabilities and other obligations

Contingent liabilities and other obligations

Obligations to private equity funds and longterm equity reflect outstanding commitments to funds and committed purchase agreements of equities. Commitments to private equity funds are expected to have a liquidity effect within the next 1-7 years.

Remaining liabilities in real estate projects mainly consist of costs to complete ongoing projects including two new factories within the LEGO Group, with expected liquidity

effect within 5 years. Guarantees mainly relate to bank guarantees for commitments.

Other obligations comprise purchase, service and licence agreements.

Security has been given in land, buildings and installations at a net carrying amount of DKK 3,074 million (DKK 3,489 million in 2022) for mortgage loans with a carrying amount of DKK 787 million (DKK 794 million in 2022).

Section 5 – Taxes

5.1. Income tax expense

Accounting policies

The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement,

except to the extent that it relates to items recognised in other comprehensive income. In this case, tax is also recognised in other comprehensive income.

Section 6 – Intangible assets and

property, plant and equipment

6.1. Intangible assets and property, plant and equipment

The carrying amount of intangible assets and property, plant and equipment is split into the following groups:

The lower intangible asset value at year-end 2023 relates to impairment of goodwill of DKK 2.1 billion related to the BrainPOP acquisition. The impairment test of BrainPOP is based on the estimated value in use from the latest ten-year business plan where revenue and

margin assumptions reflect current market expectations.

The increase in property, plant and equipment is driven by expanding production capacity within the LEGO Group.

Carrying

Depreciation, amortisation and impairment

Total impairment for 2023 amounts to DKK 2,132 million and relates to impairment of goodwill from the acquisition of BrainPOP. The market for education and playful learning products to school districts in the US has been challenged by reduced public funding and hence KIRKBI has reviewed its

original business case. Based on an updated 10-year business plan KIRKBI has recognised a goodwill impairment of DKK 2,132 million. The impairment test was performed based on unlevered free cash flow and applying a WACC of 12.5 % and terminal growth of 3 %. No impairment was identified in 2022.

Accounting policies

Intangible assets

Goodwill and trademarks are initially recognised in the balance sheet at cost and are not amortised.

Acquired patents and other intangible rights are capitalised on the basis of the costs incurred. These costs are amortised over the shorter of their estimated useful lives and the contractual duration.

The carrying amount of goodwill, trademarks, patents and other intangible rights is allocated to their respective cash generating units at the acquisition date and is tested for impairment at that level.

Research expenses are charged to the income statement as incurred. Software and development projects that are clearly defined and identifiable and which are expected to generate future economic profit are recognised as intangible non-current assets at historical cost less accumulated amortisation and any impairment loss. Amortisation is provided on a straight-line basis over the expected useful life which is normally 5–10 years. Other development costs are recognised in the income statement. An annual impairment test of the intangible assets under construction is performed.

Property, plant and equipment

Land and buildings comprise mainly factories, warehouses and offices.

Property, plant and equipment are measured at cost, less subsequent depreciation and impairment, except for land, which is measured at cost less impairment.

Cost comprises acquisition price and expenses directly related to the acquisition until the time when the asset is ready for use. The cost of self-constructed assets comprises direct expenses for wage consumption and materials. Borrowing costs related to financing self constructed assets that take a substantial period of time to complete are included in the cost price.

Depreciation is calculated using the straight-line method or the degressive method to allocate the cost of each asset to its residual value over its estimated useful life as follows:

Buildings 25-50 years

Installations 5-20 years

Plant and machinery 2-25 years

Other fixtures, fittings, 3-10 years tools and equipment

The residual values and useful lives of the assets are reviewed and adjusted, if appropriate, at each balance sheet date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income statement.

Section 7 – Working capital

7.1. Inventories

Inventories comprises inventory from the LEGO Group.

Inventories recognised as an expense during 2023 amounted to DKK 13,211 million (DKK 13,354 million in 2022). Write-down of inventories is recognised as a cost of DKK 52 million (DKK 144 million in 2022).

Accounting policies

Inventories are measured at the lower of cost and net realisable value. Cost is accounted for on a first-in, first-out (FIFO) method. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure (indirect production costs), the latter being allocated on the basis of normal production capacity. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of

All figures are reported in the reporting line LEGO Group in the income statement.

7.2. Trade receivables

Trade receivables mainly consist of receivables within the LEGO Group and the age distribution can be specified as follows:

Trade receivables

business less the estimated costs of completion and the estimated costs necessary to make the sale.

The LEGO Group applies a standard cost model that is defined by estimated production capacity. Cost and capacity can vary during the year and therefore adjustments for indirect production costs and purchase price variances are made to reflect the actual cost of inventories.

When the net realisable value is lower than cost, inventory items are impaired and measured at net realisable value.

Realised losses for 2023 amounted to DKK 23 million compared to DKK 319 million in 2022.

The KIRKBI Group has no significant trade receivable risk in specific countries, but has some single

Accounting policies

Trade receivables are initially recognised at fair value equal to the transaction price, and subsequently measured at amortised cost less allowance for lifetime expected credit losses.

Trade receivables are written off when all possible options have been exhausted and there are no reasonable expectations of recovery.

2023 2022

significant trade debtors. The exposure for trade receivables is managed globally in the LEGO Group through fixed procedures, and credit limits are set as deemed appropriate for the customer, taking current local market conditions into account.

The KIRKBI Group applies the IFRS 9 simplified approach to measure expected credit loss and a lifetime expected loss allowance for all trade receivables.

Exposure to credit risk on trade receivables is guided by the KIRKBI Group’s policies. Credit limits are set based on the customer’s financial position and current market conditions.

7.3. Other receivables

Accounting policies

Other receivables are measured at cost unless specifically stated otherwise.

7.4. Other liabilities

Specified as follows:

and relate to:

Other current and non-current liabilities mainly relate to the LEGO Group and

comprise wage related debt, VAT, other indirect taxes and sales incentives.

Accounting policies

Other liabilities are measured at amortised cost unless specifically stated otherwise.

Borrowings are initially recognised at fair value, net of transaction expenses incurred. Borrowings are subsequently measured at amortised cost. Any differences between the proceeds and the redemption value are recognised in

the income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the KIRKBI Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Section 8 – Other notes Income Statement

8.1. Standard consolidated income statement

The KIRKBI Group presents its consolidated income statement, as an alternative performance measure (APM) as management believes that a standard consolidated income statement does not give the most accurate picture of the company’s holding and investment activities. KIRKBI’s activites include ownership of LEGO branded entities as well as operation of a large diversified investment portfolio. Management does not believe that a standardised consolidated income

statement will give a transparent and clear picture of profitability, development and direction of the KIRKBI Group’s activities. The income statement presented is therefore based on the internal management reporting for the KIRKBI Group presented as an APM.

To fulfil IFRS requirements of presenting a standardised consolidated income statement, it is presented below without further descriptions or notes.

8.2. Group revenue

8.3. Group expenses by nature

Accounting policies

Expenses by nature disclose information about expenses arising from the main inputs that are consumed in order to accomplish the KIRKBI Group’s activities.

8.4. Group employee expenses

Since the Executive Management only consists of one member, the remuneration of the Executive Management and the Board of Directors is disclosed collectively with reference to § 98b (3) of the Danish Financial Statements Act.

Accounting policies

Wages, salaries, social security cost, leave and sick leave, bonuses and non-monetary employee benefits are

Remuneration to Executive Management and Key Management Personnel consists of salaries, benefits and incentive plans. Incentive plans comprise a short-term incentive plan based on yearly performance and a long-term incentive plan based on long-term goals regarding value creation.

recognised in the financial year in which the services are rendered. Whenever the KIRKBI Group provides long-term employee benefits, the costs are accrued to match the rendering of the services by the employees.

8.5. Auditor’s fee

Fee to Deloitte included under Other services comprises primarily IT consultancy services to the LEGO Group audited by PWC.

Section 9 – Other notes Balance sheet

9.1. Share capital

The share capital consists of:

1,408 A-shares of DKK 1,000 or multiples thereof 194,592 B-shares of DKK 1,000 or multiples thereof 196,000 Total shares

Each ordinary A share of DKK 1,000 gives 1,000 votes, while each ordinary B share of DKK 1,000 gives 1 vote.

Dividend has been distributed at DKK 2,500 per share (2022 DKK 2,250 per share).

On an extraordinary general assembly held 16 November 2023 the shareholders decided to cancel 4,000 B-shares which were acquired by KIRKBI. No other changes have been made to the share capital in the past 5 years.

Accounting policies

Dividends are recognised as a liability in the period in which they are adopted at the Annual General Meeting.

9.2. Non-controlling interests

The non-controlling interest of the KIRKBI Group mainly relates to Koldingvej 2, Billund A/S’ 25 % ownership of the LEGO Group.

Financial information about LEGO A/S:

Koldingvej 2, Billund A/S is a 100 % owned subsidiary of the LEGO Foundation.

9.3. Related party transactions

KIRKBI A/S’ related parties comprise its owners Kjeld Kirk Kristiansen, Sofie Kirk Kristiansen, Thomas Kirk Kristiansen, Agnete Kirk Kristiansen as well as its Board of Directors and Executive Leadership Team of KIRKBI A/S. Related parties also comprise subsidiaries and associates. Related parties further comprise companies where the mentioned persons have significant influence.

Kjeld Kirk Kristiansen, Sofie Kirk Kristiansen, Thomas Kirk Kristiansen and Agnete Kirk Kristiansen have as owners significant influence in KIRKBI A/S.

In the financial year, a certain number of transactions related to services took place between the owners of KIRKBI A/S and the KIRKBI Group. These services were paid on normal market terms and the total fee paid to KIRKBI A/S amounted to DKK 118 million (2022: DKK 50 million). Further, in the financial year interests paid to owners of KIRKBI A/S amounted to DKK 47 million (2022: DKK 3 million).

During 2023, treasury shares were acquired by KIRKBI A/S from Kjeld Kirk Kristiansen and

Sofie Kirk Kristiansen totalling DKK 11,135 million (2022 DKK 0 million). Further, the KIRKBI Group acquired a company from Agnete Kirk Kristiansen for DKK 184 million and Sofie Kirk Kristiansen acquired a company from the KIRKBI Group for DKK 327 million during 2023. The transactions were all made on normal market terms.

Transactions related to sales of products and services between associates and the KIRKBI Group amounted to DKK 950 million (2022: DKK 966 million), which was paid on normal market terms.

For information about remuneration to the Board of Directors and the Executive Leadership Team for their role in KIRKBI reference is made to note 8.4. Payments for any other service are made on market terms.

Loans, receivables and commitments related to associates are specified in the KIRKBI Group’s balance sheet or related notes.

9.4. Financial assets and liabilities

Financial assets and liabilities by valuation category

The table below shows which financial assets and liabilities that are measured at either fair value through the income statement or at amortised cost.

Fair value hierarchy for financial assets measured at fair value through the income statement:

Investments measured at fair value are classisfied according to a fair value hierarchy depending on the inputs used in the valuation method. The fair value hierarchy distinguishes between observable and unobservable inputs, which are classified at one of the following levels:

Level 1 Unadjusted quoted market prices for identical assets in an active market

Level 2 Inputs other than quoted market prices included within level 1 that are observable for the assets either directly or indirectly

Level 3 Inputs for the asset or liability that are not based on observable market data

Due to the short term nature of financial assets and liabilities measured at amortised cost their carrying amount is considered to be approximately the same as their fair value.

There have not been transfers between fair value hierarchies in the last two years.

Change in value for level 3 in 2023

Accounting policies

The KIRKBI Groups investment activities are meassured at fair value through the income statement, which equals listed prices (level 1), valuation techniques with observable market data (level 2) or internationally accepted valuation

models (level 3). All other recognised financial assets and liabilities are measured at cost less depreciation. For description of significant accounting estimates and judgements please see note 3.2, note 3.3 or note 10.2.

Section 10 – Basis for preparation

10.1. Basis of reporting

The consolidated financial statements of the KIRKBI Group have been prepared in accordance with International IFRS Accounting Standards as adopted by the EU and additional Danish disclosure requirements.

This section introduces the overall basis for the KIRKBI Groups accounting policies. A more detailed description of accounting policies for the various areas is presented in the respective notes.

The accounting policies are unchanged from last year. Comparative figures in the balance sheet and in the notes have been restated to align with this year’s presentation. The adjustment of comparative figures have no effect on total assets.

Applying materiality

To ensure appropriate presentation of relevant information for the user of the financial statements, management has made materiality judgements of content and presentation.

From a quantitative perspective, the following classifications are applied:

• Clearly immaterial. Information has no effect to the users’ decision-making

• In between. Information above the clearly immaterial threshold but below the material threshold. The information requires a further assesment of qualitative

factors to determine whether a disclosure should be included or not

• Material. Information that is quantitative significant to the users’ decision-making

Based on these classifications the following thresholds have been applied:

• Clearly immaterial information is set to the lowest of 1 % of equity or 7 % of profit before tax

• In between information is set between 1-4 % of equity and between 7-35 % of profit before tax

• Material information is set to above 5 % of equity or 35 % of profit before tax

Besides the quantitative threshold on the financial statements a separate treshold is made for risk and control disclosures. As such the threshold for risk and control disclosures is set at 0.1 % of equity and 0.7 % of profit before tax.

Consolidation practice

Subsidiaries are fully consolidated from the date at which control is transferred to the KIRKBI Group. They are de-consolidated from the date at which control ceases.

The KIRKBI Group’s share in joint operations is recognised in the consolidated balance sheet through recognition of the KIRKBI Group’s relative share of assets, liabilities, income and expenses.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides

evidence of impairment of the asset transferred. Subsidiaries’ accounting policies have been changed where necessary to ensure consistency with the policies adopted by the KIRKBI Group.

Non-controlling interests include third-party shareholders’ share of equity and the results for the year in subsidiaries which are not 100 % owned. The part of the subsidiaries’ results that can be attributed to non-controlling interests forms part of the income statement for the year. Non-controlling interests’ share of equity is stated as a separate item in equity.

Associates are entities, where the KIRKBI Group has significant influence but which it does not control, generally represented by a shareholding of between 20 % and 50 % of the voting rights. Associates classified as LEGO Brand and Related Activities are accounted for using the equity method of accounting and are initially recognised at cost. Assoicates classified as investments are valuated using fair value through the income statement (IFRS 9).

Foreign currency translation

Functional and presentation currency Items included in the financial statements of each of the KIRKBI Group’s entities are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Danish kroner (DKK), which is the functional and presentation currency of the Parent Company.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from

the settlement of such transactions and from the translation at balance sheet date exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as reserve for exchange rate adjustments.

Group companies

The results and financial position of subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• Assets and liabilities for each subsidiary are translated into DKK at the closing rate at the balance sheet date.

• Income and expenses for each subsidiary are translated at average exchange rates.

• Differences deriving from translation of the foreign subsidiaries’ opening equity to the exchange rates prevailing at the balance sheet date, and differences deriving from the translation of the income statements of the foreign subsidiaries from average exchange rates to balance sheet date exchange rates are recognised in other comprehensive income.

Effects of new and amended accounting standards

All amended standards and interpretations issued by IASB and endorsed by the EU effective as of 1 January 2023 have been adopted by the KIRKBI Group. None of the newly adopted or amended standards impacted the Consolidated Financial Statements. None of the amendments that are issued, but not yet effective, are likely to impact the Consolidated Financial Statements.

10.2. Significant accounting estimates and judgements

When preparing the financial statements, it is necessary that management makes a number of accounting estimates and judgements that affect the reported amounts of assets and liabilities as well as revenues and expenses.

Estimates and judgements used in the determination of reported results are continuously evaluated. Management bases the judgements on historical experience and other assumptions that management assesses are reasonable under the given circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The following accounting estimates and judgements are those which management assesses to be material for the KIRKBI Group’s financial statements.

Investment in associates

The KIRKBI Group’s investment in entities in which it has significant influence is accounted for using either the equity method or fair value through the income statement depending on the classification of each single entity.

Entities, in which the KIRKBI Group has significant influence and which are considered within LEGO Brand and Related

Activities are accounted for using the equity method.

Entities, in which the KIRKBI Group has significant influence, which are defined as an investment activity are accounted for using fair value through the income statement and accounted for in accordance with IFRS 9.

Financial information about associated companies classified as Investment Activities is not disclosed, as these investments are meassured at fair value.

Please refer to the KIRKBI Group Structure (note 11) for a complete overview of which companies are accounted for using the equity method and which companies are accounted for using fair value through the income statement.

It is management’s assessment that the assumptions applied are reasonable.

Long-term equity

Valuation of unlisted long-term equity investments is based on estimates and assumptions as regards the fair value of each individual company. The fair value is estimated using a valuation model based on relevant multiples of a set of comparable companies, pro-forma

adjusted operating income and adjusted net interest bearing debt in combination with discounted cash flow analysis. The valuation is performed by internal portfolio managers.

The most subjective parameter in the valuation model is the multiples from comparable companies. If the multiples were reduced by 1.0x point, it would have a negative effect on profit before tax of around DKK 0.8 billion (2022: DKK 0.8 billion).

It is management’s assessment that the assumptions applied are reasonable.

Real estate investments

Valuation of investments in real estate requires estimates and judgements on future cash flows, yields and market values for similar properties. The most subjective parameter is the yield used in the calculation which varies from 4.25 % to 5.5 % based on individually assesment of each property. If the yield in the calculations increases by 1 % point, the impact on profit before tax would be negative with around DKK 2.0 billion (2022: DKK 1.8 billion).

It is management’s assessment that the assumptions applied are reasonable.

10.3. Greenhouse gas accounting principles

Introduction

The KIRKBI greenhouse gas (GHG) accounts cover those emissions resulting from activities related to the KIRKBI Group, namely, its own operations and its investment activities, including those of the LEGO Brand and Related Activities. The GHG accounts have been prepared in accordance with the guidance in the GHG Protocol Corporate Accounting and Reporting Standard (2015). The scope is based on a combination of the operational control approach and the equity-share approach, in a manner that gives us the most complete picture of our emissions.

Scope 1: Direct emissions

Direct emissions generated by KIRKBI’s own combustion of fuels used for: heating at KIRKBI offices; KIRKBI-owned and leased cars; and KIRKBI-owned aircraft. Emissions measured based on use data from providers and relevant emissions factors from 2023 UK Government GHG Conversion Factors for Company Reporting.

Scope 2: Indirect emissions

Emissions from electricity, district heat, and district cooling calculated based on use data and utility-supplied emission factors. Market-based emissions from electricity use are calculated based on the statements from electricity providers that KIRKBI purchases electricity 100 % based on renewable sources. Location-based emissions from electricity are calculated using the most recent emissions factors from national governments and/or the IEA.

Scope 3: Other indirect emissions

Included in the GHG Accounts are emissions from the following scope 3 categories: category 3 fuel and energy- related activities; category 6 business travel; category 7 employee commuting; category 13 downstream leased assets; and category 15 investments. Other scope 3 categories have been assessed to have limited or no applicability and are therefore omitted.

Category 3: Fuel and energy-related activities

Emissions related to the production of fuels and energy purchased and consumed by KIRKBI are calculated using the relevant well-to-tank and transmission-and-distribution losses conversion factors from 2023 UK Government GHG Conversion Factors for Company Reporting.

Category 6: Business travel

Emissions from commercial flights, hotels, and rental cars are based on data received from KIRKBI’s corporate travel management service provider and calculated by a third-party provider. Emissions from air travel booked outside of the corporate travel management provider are calculated based on travel distance. Emissions from travel in employee cars are based on mileage claims and the emission factor for an unknown average car. Emissions factors are from 2023 UK Government GHG Conversion Factors for Company Reporting.

Category 7: Employee commuting

Employee commuting is based on commuting habits self-reported by

employees in a survey and the emission factor for an unknown average car from 2023 UK Government GHG Conversion Factors for Company Reporting. Emissions are limited to those coming from employees commuting by car. This survey will be repeated every three years, or in case of significant changes to the workforce.

Category 13: Downstream leased assets

Emissions from downstream leased assets, excluding the KIRKBI real estate portfolio, are based on reports of chartered flight hours provided by the operator of our aircraft and calculated using the applicable emission factor from the 2023 UK Government GHG Conversion Factors for Company Reporting.

Emissions from downstream leased Real

Estate assets are based on a combination of primary and estimated use data and calculated based on country or fuel specific emissions factors. Where estimated, use data is based on Danish real estate energy use averages or limits, as applicable. Emissions are calculated using national or IEA-provided emission factors. For floor space covered by green leases, or where KIRKBI procures renewable electricity, the emission factor is set to zero.

Due to personnel changes in December, emissions from the final two weeks of 2023 were estimated based on a mix of historic data and projected data. Omitted from downstream leased assets are emissions from buildings on properties in the ‘Land Sustainability’ portfolio.

Category 15: Investments

Accounting for emissions from the LEGO Brand and Related Activities and from Capital Activities follow the same principles.

Emissions from investments are calculated using ownership share as of 31 December and applying the latest available emissions data. Included in KIRKBI’s Greenhouse Gas accounts are the proportional scope 1 & 2 emissions, using investment-specific approach, when possible, and averagedata method, when investee company does not provide scope 1 and 2 data. The investment-specific approach relies on the most recent company or fund- reported emissions. The average-data approach relies on estimates provided by third-party provider MSCI or calculations based on sector classification, sector emissions intensities and latest revenue data.

Emissions for the LEGO Group are based on location-based emissions factors for its audited emissions of production facilities. In addition, KIRKBI adds previous years’ emissions from retail stores, hubs, and offices outside Billund as an estimate of this years’ emissions of these.

In total, 19.3 % of the category 15 emissions has been estimated.

SBT Portfolio coverage

The status on SBT Portfolio Coverage is calculated by labelling each holding with its SBTi status based on the SBTi dataset per the final day of the reporting period. Two metrics are calculated:

• Verified: Calculated as total KIRKBI-owned emissions from companies with a verified Science Based Target divided by the total KIRKBI-owned emissions.

• Committed: As a forward-looking indicator, we also calculate a portfolio coverage of companies ‘working with SBTi’ by including companies with a commitment to submit their targets to the SBTi for verification within the next two years. Calculated as total KIRKBI-owned emissions from companies committed to having a verified Science Based Target divided by the total KIRKBIowned emissions.

Section 11 – Group Structure

11.1. Group Structure

Subsidiaries (fully consolidated into the KIRKBI Group)

LEGO A/S, 75 % (Denmark)

and all subsidiaries of LEGO A/S

KIRKBI Invest A/S, 100 % (Denmark)

Denmark KIRKBI Anlæg A/S

Denmark KIRKBI Operationel Support ApS

Denmark KIRKBI Real Estate Investment A/S

Denmark LEGO Juris A/S

Denmark Mølholm-Klinikken Ejendom ApS

Denmark Neue Flora Invest A/S

Denmark K & C Holding A/S

Denmark Blue Hors ApS

Denmark Schelenborg Gods ApS

Denmark Privathospital Mølholm P/S, 90 %

Denmark Privatmedicinsk Klinik Mølholm A/S

Denmark Company Healthcare A/S

Denmark Light Brick A/S

Denmark Akkco2 By Heart ApS

Germany Blue Hors GmbH

Germany KIRKBI Real Estate Investment GmbH

Germany Elsenheimerstrasse GmbH

Germany Maxor 4 GmbH, 94 %

Germany O55 GmbH

Japan LLJ Investco KK

Switzerland KIRKBI AG

Switzerland KIRK AG

Switzerland Valbella Resort AG

USA Adapture Renewables Inc.

USA BrainPOP Holdco US, Inc. and all subsidiaries hereof

Joint Operations

(accounted for using pro-rata consolidation)

United Kingdom KIRKBI Burbo Extension Holding Ltd.

United Kingdom Burbo Extension Holding Ltd., 25 %

United Kingdom Burbo Extension Ltd., 25 %

Associates

(accounted for using the equity method)

Denmark Anpartsselskabet af 7.11.2022, 33.3 %

United Kingdom Merlin Entertainments Ltd., 47.5 %

United Kingdom Motion JVCO Ltd., 47.5 %

China Shanghai LEGOLAND CO. Ltd., 26 %

Associates within investment activities

(accounted for using fair value through the income statement)

Denmark Falck A/S, 27.9 %

Denmark Nilfisk A/S, 20.3 %

Luxembourg Armacell International S.A, 43.5 %

Sweden Välinge Group AB, 48.7 %

Part 4 Parent Company

Parent Company

PART 4 – Parent Company

95 Income Statement & Comprehensive Income

95 Balance Sheet at 31 December

96 Statement of Changes in Equity

97 Cash Flow Statement 1 January - 31 December

98 Significant accounting policies

98 Employee expenses

99 Tax on profit for the year

99 Property, plant and equipment

100 Investments in subsidiaries

100 Non-current liabilities

100 Contingent liabilities and other obligations

101 Related party transactions

PART 5 – Additional information

103 Management’s Statement

104 Independent Auditor’s Report

107 Independent Auditor’s Assurance Report

Income Statement & Comprehensive Income 1 January – 31 December Balance Sheet at 31 December

Balance Sheet at 31 December parent company Statement of Changes in Equity

Cash Flow Statement 1 January – 31 December

Note 1 Significant accounting policies Note 2 Employee expenses

The financial statements of the Parent Company KIRKBI A/S has been prepared in accordance with International IFRS Accounting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act for reporting class C enterprises (Large).

The accounting policies for the Parent Company and for the KIRKBI Group are identical except for the following:

Dividend from investments in subsidiaries is recognised in the income statement of the parent company in the year the dividends are declared. If the dividend

distributed exceeds the comprehensive income of the subsidiaries in the period the dividend is declared, an impairment test is performed. Investments in subsidiaries

Investments in subsidiaries are measured at cost. Cost includes the fair value of the purchase consideration plus direct purchase costs.

If there is an indication of impairment, impairment testing is carried out as described in the accounting policies for the consolidated financial statements. Where the carrying value exceeds the recoverable amount, it is written down to the recoverable amount.

Since the Executive Management only consists of one member, the remuneration of the Executive Management and the Board of Directors is disclosed collectively with reference to § 98b (3) of the Danish Financial Statements Act.

Incentive plans comprise a short-term incentive plan based on yearly performance and a long-term incentive plan related to long-term goals regarding value creation.

Note 3 Tax on profit for the year

Note 4 Property, plant and equipment

Note 7 Contingent liabilities and other obligations

Security has been given in land, buildings and installations at a net carrying amount of DKK 210 million (DKK 186 million in 2022) for the company’s mortgage loans.

The Parent Company is the KIRKBI Group’s administration company in relation to the Danish tax authorities in as far as national, joint taxation is concerned.

Note 8 Related party transactions

KIRKBI A/S´ related parties comprise Kjeld Kirk Kristiansen, Sofie Kirk Kristiansen, Thomas Kirk Kristiansen, Agnete Kirk Kristiansen and the Board of Directors and the Executive Leadership Team of KIRKBI A/S. Related parties also comprise subsidiaries and associates and Boards of Directors and Executive Management in these companies. Related parties further comprise companies where the mentioned persons have significant influence.

Kjeld Kirk Kristiansen, Sofie Kirk Kristiansen, Thomas Kirk Kristiansen and Agnete Kirk Kristiansen have as shareholders significant influence in KIRKBI A/S.

In the financial year a certain number of transactions related to services took place between the owners of KIRKBI A/S and KIRKBI A/S. These services have been paid on normal market conditions and the total fee paid to

KIRKBI A/S amounts to DKK 93 million (2022 DKK 34 million).

In addition, treasury shares were acquired by KIRKBI A/S from Kjeld Kirk Kristiansen and Sofie Kirk Kristiansen totalling DKK 11,135 million (2022 DKK 0 million). The transactions were made on normal market terms

For information about remuneration to the Board of Directors and the Executive Leadership Team for their role in KIRKBI reference is made to note 8.4 in the concolidated financial statements. Payments for any other service are made on market terms.

Transactions with subsidiaries and associates have included the following:

Loans, receivables and commitments related to subsidiaries and associates are specified in the balance sheet or in the notes.

Part 5

Additional Information

Management’s Statement

Today, the Board of Directors and Executive Management have discussed and approved the annual report of KIRKBI A/S for the financial year 2023.

The annual report is prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional disclosure requirements in the Danish Financial Statements Act.

In our opinion, the consolidated financial statements and the Parent Company financial statements give a true and fair view of the Group’s and the Parent Company’s financial position at 31 December 2023 and of the results of the Group’s and the Parent Company’s operations and cash flows for the financial year 2023 in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional disclosure requirements in the Danish Financial Statements Act.

In our opinion, the management’s review includes a fair review of the development in the Group’s and the Parent Company’s operations and economic conditions, the results for the year and the financial position of the Group and the Parent Company, as well as a review of the most significant risks and elements of uncertainty facing the Parent Company and the Group, in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and additional disclosure requirements in the Danish Financial Statements Act.

We recommend the adoption of the annual report at the annual general meeting of shareholders.

Billund, 7 March 2024

Executive Management

Independent Auditor’s Report

To the shareholders of KIRKBI A/S

We have audited the consolidated financial statements and the parent financial statements of KIRKBI A/S for the financial year 2023, which comprise the income statement, statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes, including material accounting policy information, for the Group as well as the Parent. The consolidated financial statements are prepared in accordance with IFRS Accounting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act, and the parent financial statements are prepared in accordance with the Danish Financial Statements Act.

In our opinion, the consolidated financial statements give a true and fair view of the Group’s financial position at 31 December 2023, and of the results of its operations and cash flows for the financial year 2023 in accordance with IFRS Accounting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act.

Furthermore, in our opinion, the parent financial statements give a true and fair view of the Parent’s financial position at 31 December

2023, and of the results of its operations for the financial year 2023 in accordance with the Danish Financial Statements Act.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the “Auditor’s responsibilities for the audit of the consolidated fi nancial statements and the parent fi nancial statements” section of this auditor’s report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have ful fi lled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our opinion.

Statement on the management’s commentary Management is responsible for the management commentary.

Our opinion on the consolidated financial statements and the parent financial statements does not cover the management commentary, and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements and the parent financial statements, our responsibility is to read the management commentary and, in doing so, consider whether the management commentary is materially inconsistent with the consolidated financial statements and the parent financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Moreover, it is our responsibility to consider whether the management commentary provides the information required by relevant laws and regulations

Based on the work we have performed, we conclude that the management commentary is in accordance with the consolidated financial statements and the parent financial statements and has been prepared in accordance with the information required by relevant laws and regulations. We did not identify any material misstatement of the management commentary.

Management’s responsibilities for the consolidated financial statements and the parent financial statements

Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU and additional requirements of the Danish Financial Statements Act as well as the preparation of parent financial statements that give a true and fair view in accordance with the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements and the parent financial statements, Management is responsible for assessing the Group’s and the Parent’s ability to continue as a going concern, for disclosing, as applicable, matters related to going concern, and for using the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements unless Management either intends to liquidate the Group or the Entity or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated financial statements and the parent financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements and the parent financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and these parent financial statements.

As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial

statements and the parent financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffcient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Parent’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

• Conclude on the appropriateness of Management’s use of the going concern basis of accounting in preparing the consolidated financial statements and the parent financial statements, and, based on the audit evidence

obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements and the parent financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and the Entity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements and the parent financial statements, including the disclosures in the notes, and whether the consolidated financial statements and the parent financial statements represent the underlying transactions and events in a manner that gives a true and fair view.

• Obtain suffcient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated

financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Aarhus, 7 March 2024

Deloitte

Statsautoriseret Revisionspartnerselskab

CVR No. 33963556

Thomas Rosquist Andersen

State Authorised Public Accountant

Identification No (MNE) 31482

Søren Marquart Alsen

State Authorised Public Accountant

Identification No (MNE) 40040

Independent Auditor’s Assurance Report on KIRKBI Group CO2e emissions

To the stakeholders of KIRKBI A/S KIRKBI A/S engaged us to provide limited assurance on KIRKBI Group CO2e emissions for the financial year 1 January to 31 December 2023 as presented on page 45 under column “2023” in the Annual Report 2023 of KIRKBI A/S.

Management’s responsibility

Management of KIRKBI A/S is responsible for designing, implementing, and maintaining internal controls over information relevant to the preparation of the Group CO2e emissions, ensuring they are free from material misstatement, whether due to fraud or error. Furthermore, Management is responsible for establishing objective accounting principles for the preparation of the Group CO2e emissions, for the overall content of the Group CO2e emissions, and for measuring and reporting the Group CO2e emissions in accordance with section “10.3 Greenhouse gas accounting principles” on page 91.

Auditor’s responsibility

Our responsibility is to express a limited assurance conclusion based on our engagement with

Management and in accordance with the agreed scope of work. We have conducted our work in accordance with ISAE 3000 (Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information and ISAE 3410 Assurance Engagements on Greenhouse Gas Statements, and additional requirements under Danish audit regulation, to obtain limited assurance about our conclusion. Greenhouse Gas emissions quantification is subject to inherent uncertainty because of incomplete scientific knowledge used to determine emission factors and the values needed to combine emissions of different gasses.

We are responsible for:

• planning and performing the engagement to obtain limited assurance about whether the Group CO2e emissions are free from material misstatement, whether due to fraud or error, and prepared, in all material respects, in accordance with the accounting principles;

• forming an independent conclusion, based on the procedures we performed and the evidence we obtained; and

• reporting our conclusion to the stakeholders of KIRKBI A/S.

Deloitte Statsautoriseret Revisionspartnerselskab

applies International Standard on Quality Management 1, ISQM 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

We have complied with the requirements for independence and other ethical requirements of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (IESBA Code), which is founded on fundamental prin-ciples of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour, and ethical requirements applicable in Denmark.

A limited assurance engagement is substantially less in scope than a reasonable assurance engagement. Consequently, the level of assurance

obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement.

Work performed

We are required to plan and perform our work in order to consider the risk of material misstatement in the Group CO2e emissions. To do so, we have:

• conducted interviews with data owners and internal stakeholders to understand the key processes and control activities for measuring, recording and reporting the Group CO2e emissions;

• reviewed evidence on a selective basis to check that data has been appropriately measured, recorded, collated and reported;

• performed analysis of data, selected based on risk and materiality;

• made inquiries regarding significant developments in the reported data;

• considered the presentation and disclosure of CO2e emissions for KIRKBI Group;

• assessed that the process for reporting greenhouse gas emissions data follows the principles of relevance, completeness, consistency, transparency and accuracy

outlined in The Greenhouse Gas Protocol Corporate Standard Revised edition (2015) and The Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011); and

• evaluated the evidence obtained.

Our conclusion

Based on the procedures performed and the evidence obtained, nothing has come to our attention that causes us not to believe that KIRKBI Group CO2e emissions as presented on page 45 in the Annual Report 2023 of KIRKBI A/S for the financial year 1 January - 31 December 2023, have been prepared, in all material respects, in accordance with the section “10.3 Greenhouse gas accounting principles” on page 91.

Aarhus, 7 March 2024

Deloitte

Statsautoriseret Revisionspartnerselskab

Business Registration No. 33 96 35 56

Thomas Rosquist Andersen

State-Authorised Public Accountant

Identification No (MNE) 31482

Marie Voldby ESG Partner

Koldingvej 2

DK-7190 Billund

Tel: +45 75 33 88 33

Website: www.kirkbi.com

E-mail: kirkbi@kirkbi.com

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© 2024 KIRKBI A/S

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